A Cost-construction Model to Assess the Total Cost of an Anesthesiology Residency Program

Abstract

Background Although the total costs of graduate medical education are difficult to quantify, this information may be of great importance for health policy and planning over the next decade. This study describes the total costs associated with the residency program at the University of Texas--Houston Department of Anesthesiology during the 1996-1997 academic year. Methods The authors used cost-construction methodology, which computes the cost of teaching from information on program description, resident enrollment, faculty and resident salaries and benefits, and overhead. Surveys of faculty and residents were conducted to determine the time spent in teaching activities; access to institutional and departmental financial records was obtained to quantify associated costs. The model was then developed and examined for a range of assumptions concerning resident productivity, replacement costs, and the cost allocation of activities jointly producing clinical care and education. Results The cost of resident training (cost of didactic teaching, direct clinical supervision, teaching-related preparation and administration, plus the support of the teaching program) was estimated at $75,070 per resident per year. This cost was less than the estimated replacement value of the teaching and clinical services provided by residents, $103,436 per resident per year. Sensitivity analysis, with different assumptions regarding resident replacement cost and reimbursement rates, varied the cost estimates but generally identified the anesthesiology residency program as a financial asset. Conclusions In most scenarios, the value of the teaching and clinical services provided by residents exceeded the cost of the resources used in the educational program.