Many departments of radiology in teaching hospitals are finding themselves in increasing need of subsidization by their universities for continuance of their activities. This is in striking contrast to the financial success of their counterparts in non-academic institutions and is at times incomprehensible even to one's own non-radiologic colleagues. This apparent paradox deserves clarification in order that appropriate measures may be studied for its resolution. The reasons for the inability of many university departments of radiology to achieve financial success relates to the innate nature of university practice. These may be categorized as follows: 1. Care of the Indigent Patient: In many state university hospitals, the indigent patient load may represent as much as 50 to 80 per cent of the total patient census. While it is true that there is often some provision for subsidization of this work at cost, such reimbursement does not provide for growth and upgrading of equipment or for support of professional staff. 2. The Specialized Nature of University Work: University departments of radiology are increasingly involved in special procedures. This is appropriate and necessary since these hospitals are often referral centers for difficult cases and are responsible for training in the most modern technics. This work requires specialized equipment, material, advanced professional skill, and great time expenditure in both performance and interpretation. These examinations cannot be presently supported by the fees they command and are, in essence, subsidized by fees from conventional radiologic examination. For example, a skilled radiologist working in special procedures may invest his entire working day in the completion of four to six such procedures in contrast to the large volume of conventional work which can be managed by an experienced radiologist. 3. This situation is further complicated by the fact that a larger proportion of the conventional and profitable examinations are being done in community hospitals and not in teaching centers. This is as it should be so long as a competent radiologist is available, but it does further increase the need for subsidization of the more specialized procedures in teaching institutions. Non-university departments spending an increasing amount of effort on special procedures may encounter a similar problem. 4. Teaching Obligations: The university department of radiology requires a considerably larger staff than does the department of a non-teaching hospital of equivalent size. Much of the time of the academic radiologist is occupied by his teaching responsibilities at both the undergraduate and the resident levels. Lectures, film rounds, seminars, conferences, interdepartmental programs, postgraduate courses, etc. require large amounts of time in preparation and performance, a fact which is often overlooked when personnel rosters are compared with patient load.