A study was undertaken to develop guidelines for the future course of graduate medical education (GME) in New Jersey. General findings were that the current array and total number of hospital-based GME offerings by specialty and location appear sufficient, although attention must be paid to appropriate distribution; that the major basis of funding for hospital-based GME programs should continue to be provided from patient care revenues through the current system in sufficient amounts to safeguard program quality; and the quality of programs should continue to be monitored regarding medical school affiliation, formal accreditation, and the continuing presence of foreign medical school graduates. Major recommendations include the following: (1) the state's GME training capacity should be expanded only if adequate funding is available, appropriate standards of quality can be assured, and a need for additional training opportunities is demonstrated; (2) hospital reimbursement should be based upon determinations that the GME programs address state physician manpower needs and possess both formal accreditation and medical school affiliation; (3) uniform and improved methods of hospital accounting and reporting procedures for reimbursement determinations should be developed; and (4) an expanded database, for monitoring and verification of capacity and quality, should be developed and maintained. Appendices provide information and tables on physician shortages and demand, distribution of residents, legislation and hospitals. Contains 20 references. (KM)