Medical research and health care finance: Evidence from Academic Medical Centers

Pierre Azoulay, Misty Heggeness and Jennifer Kao

Research Policy, 2025, vol. 54, issue 2

Abstract: 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, how these differences affect their researchers’ ability to attract NIH grant funding, and the quantity, impact, and content of their publications. We find that in response to the reform, research activity increased by approximately 6%. Changes in research composition suggest that hospitals responded to Medicare funding cuts by encouraging incumbent investigators to increase their research activities and by redirecting hiring efforts towards individuals attracted to AMCs (e.g., translational researchers). We find little effect on clinical outcomes.

Keywords: Medical innovation; Research institutions; Biomedical workforce; Translational medicine; Government policy (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:54:y:2025:i:2:s0048733324002129

DOI: 10.1016/j.respol.2024.105163

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