Graduate medical education reform. Service provision transition costs.

Objective: To analyze the potential strategies and costs of house staff substitution under a reformed system of graduate medical education.

Design: An economic model using two scenarios for substitution of house staff (residents and fellows): (1) a lower-cost model under which nonphysician providers assume many house staff responsibilities, but additional aspects of their workload are taken over by staff physicians, nurses, and ancillary personnel; and (2) a higher-cost traditional model that relies more heavily on staff physicians to replace house officers.

Setting: US teaching hospitals.

Main Outcome Measures: Projected net substitution costs of house staff on a per full-time equivalent basis and aggregate national cost estimates of substitution.

Results: Net annual house staff substitution costs were estimated to be $58,000 and $77,000 per replaced full-time equivalent house officer, respectively, under the two scenarios. Assuming elimination of approximately 23,200 house staff under a reformed system, total (net) substitution costs to teaching hospitals were estimated at approximately $1.4 billion to $1.8 billion nationally on an annual basis.

Conclusions: Graduate medical education reform, while likely to result in substantial long-term cost savings, will necessitate transitions in service provision that are likely to generate some new costs in the short term.