Teaching Hospital
A hospital affiliated with a medical school that trains resident physicians, typically larger, more complex, and higher-cost than community hospitals, but often offering more advanced care.
On hospital cost-and-quality pages, Teaching Hospital carries a specific technical meaning that often differs from how the term is used in clinical practice or general medical writing. The definition here is the CMS-file usage. On the LakeQuality value rubric, Teaching Hospital is one of the inputs (directly or indirectly) to the combined cost-and-quality grade. Understanding how the term is computed at CMS — what counts and what does not — is part of reading hospital pages defensibly.
Each hospital page on LakeQuality surfaces the specific Teaching Hospital value for that facility (when CMS reports one), so the general definition here translates into a concrete data point on the per-hospital pages you actually use.
How It Works
Teaching hospitals make up approximately 5% of the roughly 6,100 U.S. hospitals (about 300 major teaching hospitals plus another 900+ with some residency activity, per Association of American Medical Colleges data) but handle approximately 25% of all Medicare discharges, 40% of all Medicare charity care, and the majority of the most complex cases including transplants, trauma Level I and II services, burn care, complex cardiac surgery, and rare-disease care. Teaching hospitals receive three types of supplemental Medicare payment under IPPS: Direct Graduate Medical Education (DGME) payments cover the direct costs of training residents (resident salaries, benefits, teaching supervisor costs) and totaled approximately $5 billion federal Medicare in 2024. Indirect Medical Education (IME) add-ons compensate for the higher operating costs of teaching, calculated as 5.5% of base DRG payment per 0.1 resident-to-bed ratio increment, which adds 5-10%+ to DRG payments at major teaching hospitals. Disproportionate Share Hospital (DSH) payments often flow to teaching hospitals that serve high Medicaid populations. Teaching hospital costs run 15-30% above community hospitals for similar cases due to more complex patient case mix (CMIs of 2.2-2.6 vs. 1.3-1.7 at community hospitals), more specialists involved in each case, more expensive technology, and the time and supervision costs of teaching. Major teaching hospitals include academic medical centers (AMCs) like Johns Hopkins Hospital (Baltimore), Massachusetts General Hospital (Boston), Cleveland Clinic, Mayo Clinic Rochester, Ronald Reagan UCLA Medical Center, UCSF Medical Center, NewYork-Presbyterian/Columbia, Duke University Hospital, and UPMC Presbyterian. Despite higher costs, outcomes research in Health Affairs and JAMA has consistently shown lower risk-adjusted mortality at major teaching hospitals for complex procedures, particularly cardiac surgery, complex oncology, and acute stroke. Medicare funding for GME has been capped at 1996 resident counts under the Balanced Budget Act with small expansions through the Consolidated Appropriations Acts of 2021 and 2023, constraining physician training supply.
Related Terms
- CMS Star Rating (Hospital Overall Rating), A 1-to-5 star rating assigned by CMS to each hospital based on 46+ quality measures, covering mortality, safety, readmissions, patient experience, and timely care.
- Case Mix Index (CMI), A measure of the average complexity and resource intensity of a hospital's Medicare patients, calculated as the average MS-DRG relative weight across discharges.
- Critical Access Hospital (CAH), A small, rural hospital (25 beds or fewer) designated by CMS to receive cost-based reimbursement at 101% of reasonable costs, ensuring rural communities maintain access to essential hospital services.
- Disproportionate Share Hospital (DSH) Payments, Supplemental Medicare and Medicaid payments to hospitals that serve a disproportionate number of low-income patients, totaling approximately $28 billion annually across both programs.
- Inpatient Prospective Payment System (IPPS), Medicare's payment system for acute-care hospital inpatient stays, paying a fixed amount per MS-DRG rather than reimbursing each individual service.
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About This Definition
This definition is part of the HospitalCostData Hospital Pricing Glossary, 47 terms explaining hospital costs, quality ratings, and healthcare billing. Written for patients, journalists, researchers, and healthcare professionals.