Objectives: To describe the ways in which total resources available for the Service Increment for Teaching (SIFT) have been determined and related to numbers of undergraduate medical students; and the development and current arrangements for allocating SIFT to the providers of service support for teaching.
Design: The derivation of SIFT from excess costs of teaching hospitals over general hospitals is described. The official principles of organizing SIFT to reimburse the service costs of teaching undergraduate medical students are explained. The crucial development that is examined is the change from SIFT being a global subsidy to being related to educational contracts. This development has facilitated both the specification of standards and innovative uses of SIFT. These are illustrated with examples.
Setting: Hospital and Community Health Services and Primary Care in the National Health Service (NHS) in England and Wales.
Subjects: Medical students.
Results: There is often confusion caused by SIFT being intended to cover the service costs of teaching but not having been derived in this way. This causes problems in deciding what providers should be paid through contracts for teaching of different kinds.
Conclusions: The new contractual basis has enabled medical schools to use contracts to improve the clinical teaching of undergraduate medical students in the NHS. These developments may offer useful models for other countries.