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Proposed changes to financing of teaching hospitals and new quality-based performance incentives may differentially impact the financial health of teaching and safety-net institutions. Few data have examined the potential impact of these financial changes on teaching institutions.To determine the association of hospital teaching intensity with processes and outcomes of care for the most common inpatient diagnoses in the United States.Cross-sectional analysis of the 2008 Hospital Quality Alliance and 2007 American Hospital Association databases, adjusted for hospital characteristics.A total of 2418 hospitals distributed across the country with available data on teaching intensity (resident-to-bed ratio), quality-of-care process measures, and risk-adjusted readmission and mortality rates for acute myocardial infarction (AMI), congestive heart failure (CHF), and pneumonia.Hospital-level quality-of-care process indicators and 30-day risk-adjusted readmission and mortality rates for AMI, CHF, and pneumonia.Multivariable analysis demonstrates that all hospitals perform uniformly well on quality-of-care process measures for AMI, CHF, and pneumonia. However, when compared with nonteaching hospitals, increasing hospital teaching intensity is significantly associated with improved risk-adjusted mortality for AMI and CHF, but higher risk-adjusted readmission rates for all 3 conditions. Among high teaching intensity hospitals, those with larger Medicaid populations (safety-net institutions) had particularly high readmission rates for AMI and CHF.In this nationally representative evaluation, we found significant variation in performance on risk-adjusted mortality and readmission rates, and differences in readmission rates based on safety-net status. Our findings suggest that high teaching intensity and safety-net institutions may be disproportionately affected by upcoming changes in hospital payment models.