The Evolution of GME Funding

U.S. healthcare workforce reaches a crossroads

Jared L. Harwood, MD, and Andrew J. Pugely, MD

Although graduate medical education (GME) funding has directly affected the lives of most U.S. physicians, few understand its evolution. Before the 1940s, hospitals paid trainee stipends by building costs into patient charges. The Servicemen’s Readjustment Act of 1944, known informally as the GI Bill, provided subsidies for residency expenses and teaching hospitals. Hospitals were also able to add facility and technology acquisition costs to insurance charges. For the first time, postgraduate medical residents earned salaries.

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