Reorganizing a family practice center: strategy to save a residency program at a financially troubled hospital.

The family health center of a family practice training program was eliminated from the county hospital budget following funding cuts, forcing the program faculty to create an independent nonprofit community clinic in which to train residents and provide care to established patients. A county audit of the new clinic after 2 years' operation showed substantial savings, particularly for administrative overhead. This report presents data showing the cost advantages to a small private clinic with faculty management compared with costs in a hospital-managed outpatient clinic; the savings were sufficient to assure continuation of the training program. Increased flexibility under faculty management provided a more realistic teaching environment and new research opportunities.