Teaching and research in a casemix funding environment.

Teaching and research are not funded directly under a casemix funding system, and individual Australian State and Territory governments have provided teaching and research grants to teaching hospitals to defray these costs. Biomedical research funding in Australia lags far behind that of other countries. The declining per capita expenditure on the health system generally, as well as on universities, is jeopardising teaching and research activities, which are not seen as "core" hospital services. Studies in the United States have shown that healthcare services associated with teaching and research are more costly but result in better patient outcomes. It may be time to promote outcome-based funding of teaching and research in the Australian healthcare system.