A teaching hospital is defined by the presence of a training program for physicians. Teaching hospitals generally possess one or more residency programs. The most common programs are those in either family practice or internal medicine.
Because they are involved in training doctors, it is important for a teaching hospital to stay on the forefront of technology and medical practice. To this end, teaching hospitals generally strive to keep abreast of the latest developments in medicine, and obtain the newest and best medical devices (such as computerized tomography and magnetic resonance scanner, etc.).
Doctors being trained in family practice or internal medicine also require exposure and training in a broad array of medical specialties for a complete knowledge base. This requires a teaching hospital to hire, retain, or have access to specialist in each of these areas in order to teach and monitor the learning interns and residents. When deficient in a certain area, a teaching hospital will arrange for their residents to perform an "away rotation" in the field at another institution, thus filling the gaps in the resident's training.
Reimbursement for teaching hospitals is generally higher than for regular hospitals - especially as regards government medical insurance such as Medicare and Medicaid. This higher reimbursement recognizes the additional expenses involved in staying at the leading edge of technology and in hiring the best specialists.
Teaching hospitals usually have a better reputation for the provision of health care that regular hospitals due to the cutting edge technology and specialists that they acquire. If you are ill, a teaching hospital may be your best choice. Don't plan to go in July, however, that's when the new crop of interns starts practicing!