Who pays the salary for medical residents ...

[Princess Turandot]

7. It's more complicated than that...

Medicare does directly pay for resident training costs, but it only pays its share of them. (Resident training costs include more costs than just resident salaries and benefits, but that's neither here nor there.)

The numbers in this simplified example are made up (to make the arithmetic easy for me.)

-The estimated costs per resident in 2016 are set at $100,000 per resident by Medicare.

-Medicare patients at Slipslingaway Hospital make up 25% of inpatient activity.

-For residencies qualifying for reimbursement, Medicare pays the hospital .25 x $100,000, or $25,000 per qualifying residency.

The rest of the costs is paid by the hospital from their other billing revenues. (And if Medicare patients suddenly stopped coming to Slipslingaway Hospital, it would lose the Medicare reimbursement but would still need to pay the residents.)