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Become a member and receive career-enhancing benefits

Our top priority is providing value to members. Your Member Services team is here to ensure you maximize your ACS member benefits, participate in College activities, and engage with your ACS colleagues. It's all here.

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Reframing the Value of Resident Education: How Much Would It Cost to Not Train Residents?

Andrew J. Medvecz, MD; Timothy J. Vogus, PhD; and Kyla P. Terhune, MD, MBA

November 1, 2018

The cost of health care delivery in the United States continues to rise, and from Congressional legislation to hospital policies to individual provider decisions, efforts to curtail these costs are being pursued. Hospital and surgical administrations struggle to strike a balance between cost-containment measures and providing high-quality care for patients.1 Graduate medical education (GME) may become a target of the cost-cutting measures if it is viewed as only indirectly related to patient care.2 Prior research and policy discussions have emphasized the costs of GME but has tended to ignore the ways in which residents, especially within surgery, generate value for the investments in education.3–5 We elaborate a fuller perspective that balances the costs of resident education with the potential costs from decreasing GME budgets in terms of the value that trainees bring to an institution.

The cost of training a surgical resident can be divided into direct and indirect GME costs.6–8 Direct costs include the trainee and teaching faculty salaries, costs of teaching resources, and overhead of training program management.9 Direct medical education costs per full time equivalent resident was $134,803 in 2008.3 Indirect costs describe the decreased efficiency inherent to trainees and the diminished productivity of faculty resulting from this inefficiency. Medicare pays indirect medical education (IME) funding to teaching hospitals with the understanding also that they tend to treat more complex patients and have more acute care services (for example, 24-hour in-house call, advanced technologies). Payments for IME ($6.8 billion by Medicare in 2010)4 are determined by the number of residents and beds in a hospital. Although sizable, the costs associated with GME must be balanced with the service and revenue generated by surgical residents while receiving training. Residents deliver in-house call coverage for most surgical services, thus reducing the need to have attending surgeons or ancillary providers in this role. While not able to bill for procedures performed on call, resident service allows attending surgeons to maintain busy operative and administrative calendars that provide value to their institution (for example, RVU-generating services, academic productivity) and may otherwise improve throughput. Surgery resident support extends beyond the inpatient setting to include providing care in the outpatient setting, often in underserved populations such as the Veteran’s Health Administration. Specifically, residents see clinic patients and assist with documentation, allowing attending physicians to see more patients than they would see in an independent clinic. A study from the United Kingdom found that a general surgery resident clinic generated revenue equal to 95 percent of the resident’s salary.10

Resident involvement in the operating room is an essential component of training yet can affect efficiency and spending in the OR. Many studies have demonstrated longer operative times with resident involvement. One study in orthopedics found that surgical trainees spent 8.8 minutes more for total hip arthroplasty compared to senior surgeons but without significant differences in complications.11 A small group of private surgeons working with third year general surgery residents found that operative times for hernia repair, laparoscopic cholecystectomy, and carotid endarterectomy were significantly longer when a resident was involved.12 These longer case times may force teaching surgeons to take fewer cases. However, the impact on overall efficiency and hospital spending is less clear. Many complex cases require the assistance of a second attending surgeon. Consequently, a resident may alleviate this need and provide a more cost-effective alternative as the resident assists, allowing the second surgeon to complete other productive administrative or clinical duties. Thus, the cost of resident education and any attending increase in operative time is balanced against the second surgeon’s additional productivity.

To gain a better understanding of the value of trainees, consider the counterfactual situation of eliminating surgical residents from a healthcare system while maintaining the same quality and volume of care currently provided. While this thought experiment is extreme, it helps illuminate the fact that surgery residents work in multiple domains of the hospital (outpatient, inpatient, operating room). Significant resources would be required to account for the lost labor. Advanced practice providers (APP) (for example, physician assistants and nurse practitioners) would be the most viable alternative service providers. APPs bring several advantages to a hospital service, including more continuity of care within a specific setting, increased efficiency, and focused specialization; one study identified reduced length of stay and per-patient costs as well as higher patient satisfaction scores for house staff teams.13 However, recent literature has been mixed regarding the quality of care provided relative to house staff. A study from our institution found no difference in overall quality—including 90-day survival, hospital mortality, and ICU length of stay—between house staff and APP teams.14 The transition to APPs may have economic consequences as well. One study modeled mid-level provider substitution for decreased work hours and increased educational time among surgical residents, finding significant expense with hiring additional providers to account for reduced resident availability (for example, reducing resident duty hours to 60 hours per week would require 10 physician assistant hires costing $1,134,000).15 Another study developed multiple models for replacing the resident workforce of New York City at costs ranging from $241 million to $600 million in 1994.16

Perhaps the most significant cost of cutting GME funding and resident programs is the long-term reduction of the surgical labor force. Many hospital systems struggle to provide on-call surgical services to emergency departments, leading to delayed care and increased resource use for hospital transfers.17 The 2017 AAMC report on physician supply and demand projects a shortage of 19,800-29,000 surgeons by 2030.18 While the addition of APPs may help to ease the burden of surgical shortage, curtailing or eliminating residency positions will ultimately exacerbate the problems with access to care and long wait times.

In summary, surgical residents provide a significant service to hospitals, especially underserved communities including veteran and county facilities. They are a critical feature of safety net institutions in the current model of healthcare delivery and are relatively fiscally-efficient compared to other strategies, both from a short- and long-term perspective. Despite this, GME has typically been viewed narrowly as an expense with insufficient attention to the real, tangible benefits in terms of revenue generation and service provision. We argue that GME costs should be evaluated in light of an empirical assessment of a specific counterfactual and encourage surgical educators to ask administrators and policymakers a different question than what is usually proposed: how much it would cost us at the institutional level not to fund surgical training?


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About the Authors

Andrew J. Medvecz, MD, is chief resident in quality and patient safety, VA Tennessee Valley Healthcare System, and a resident physician in general surgery, Vanderbilt University Medical Center.

Timothy J. Vogus, PhD, is the Brownlee O. Currey, Jr. Professor of Management at Vanderbilt University's Owen Graduate School of Management.

Kyla P. Terhune, MD, MBA, is an associate professor and general surgery program director at Vanderbilt University Medical Center and chief of general surgery at the VA Tennessee Valley Healthcare System.