This document reports testimony presented on Medicare financing of graduate medical education, as proposed by the Balanced Budget Act of 1995. Witnesses included: (1) Timothy M. Golddfarb, Director, Healthcare Systems (Oregon), who noted the importance of graduate medical education funding to teaching hospitals; (2) Leo P. Brideau of Strong Memorial Hospital (Rochester, New York) who was concerned with protecting the program's viability; (3) Larry Wickless of the American Osteopathic Association, who hoped for increased support for graduate osteopathic programs; (4) Spencer Foreman, who spoke on behalf of the Greater New York Hospital Association concerning the importance of international medical graduates to institutions serving poor populations; (5) William E. Jacott, who spoke for the American Medical Association, which supports changes in the graduate medical education program; (6) Patrick B. Harr, who spoke for the American Academy of Family Physicians, about the physician surplus; (7) Leslie S. Cutler, University of Connecticut Health Center, who suggested establishment of medical education consortiums; (8) Anthony M. Marlon and Jerry Reeves of Sierra Health Services (Las Vegas, Nevada), who described a private-public pilot program to fund education of medical residents; (9) Mary O. Mundlnger, Columbia School of Nursing (New York), who sought funds for graduate nursing education; and (10) Lynn E. Caton, representing the American Academy of Physician Assistants, who sought to make physician assistant programs eligible for such funding. In addition to the testimony, discussions between witnesses and the committee members are also transcribed. (CH)