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How Hospitals are Making Big Money Off of Residents

Daniel Paull MD shares an interesting fact: CMS (Medicare) pays about 150K per resident per year for programs to teach residents. What does this mean?

November 23, 2023

An interesting fact: CMS (Medicare) pays about 150K per resident per year, for programs to teach residents.

This is an old number, and it can perhaps be even more than 150K.

Now, residency programs pay their residents, let’s say an average of 70K per year.

Add benefits to that and you get maybe around 100K per year.

 

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This means that most hospital systems profit 50K per resident per year.

Now, of course they have to train them, and that takes some time/money.

People who run residencies will also state that there is no net profit here, because of the cost of training the residents. To which I counter, if all of your residents disappeared, could your hospital and practice still run?

 

If all of your residents disappeared, could your hospital and practice still run? Click To Tweet

 

A lot of these programs are resident run. Replacing a whole flock of residents by NPs and PAs would probably cost 150K per person per year including benefits.

Also, don’t forget that residency hours are by nature much more than a PA or NP would work. You would at least need 1.5 NPs or PAs per resident.

Replacing 10 residents by 15 NPs or PAs would be a net profit of 500K to a net loss of $2.25 million. A difference of almost $3 million dollars a year.

 

"A lot of these programs are resident run."

 

Perhaps you could fudge the numbers a bit differently, but the end result is going to be the same.

Hospitals are profiting immensely off of residency programs.

As a resident, this fact doesn’t matter so much, you just want to get an education and be able to afford a basic living.

All opinions published on SomeDocs-Mag are the author’s and do not reflect the official position of SoMeDocs, its staff, editors. SoMeDocs is a magazine built with the safety of free expression and diverse perspectives in mind. For more information, or to submit your own opinion, please see our submission guidelines or email opmed@doximity.com. Do you have a compelling personal story you’d like to see published on SoMeDocs? Find out what we’re looking for here and submit your writing, or send us a pitch.

All opinions published on SomeDocs-Mag are the author’s and do not reflect the official position of SoMeDocs, its staff, editors. SoMeDocs is a magazine built with the safety of free expression and diverse perspectives in mind. Do you have a compelling personal story you’d like to see published on SoMeDocs? Submit your own article now here.

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