Medical Research and Health Care Finance: Evidence from Academic Medical Centers
Academic Medical Centers (AMCs)—comprising medical schools, teaching hospitals, and research laboratories—play an important role in US biomedical innovation. The Balanced Budget Act of 1997 changed reimbursements for Medicare inpatient claims and subsidies for medical residents. We compare AMCs' relative exposure to the reform and how these differences affect their researchers' ability to attract NIH grant funding, as well as the quantity, impact, and content of their publications. We find that in response to the reform, research activity increases by approximately 6%, with larger effects observed for “translational” and clinical research. We find little effect on clinical outcomes.
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