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Why Aren’t More Students Applying To Medical School?

Did you know that there are only two applicants for every place in U.S. medical schools?

In Canada, surprisingly, close to four students apply for each opening. The training in the two countries is very similar; indeed, the Association of American Medical Colleges (AAMC) accredits medical schools in both countries.  And, in the U.S., at the high-end, physicians  can hope to earn far more than Canadian doctors.

Why then do so few Americans apply to medical school?

The answer is that we have priced a medical education well beyond the reach of most middle-class students.  In 2004, tuition and fees at a public medical school averaged $16,153. Students who attended a private school paid $32,588 according to a 2005 study published in The New England Journal of Medicine.

The author, Dr. Gail Morrison, Vice Dean for Education at University of Pennsylvania School of Medicine, tacks on $20,000 to $25,000 a year for living expenses, books and equipment to calculate that the total cost of four years of medical education comes to a heady $140,000 for public schools and $225,000 for private schools.  I’d add that, in many American cities, students would be hard-pressed to cover rent, food, clothing, utilities and transportation for $20,000 a year—let alone books and equipment.

This helps explain why 60 percent of all medical students come from the wealthiest one-fifth of all U.S. families. Another 20 percent come from families lucky enough to be on the fourth step of a five step ladder.

In Canada, by contrast, a medical education is much more affordable. In Quebec province, for example, students paid a piddling $2,943 in tuition last year—though admittedly, this deal was available only to Quebecers. But elsewhere in Canada, tuition averaged just $12,728—about 25 percent less than Americans were paying to attend a public medical school back in 2004, and about 60 percent less than they laid out to attend a private school.

As a result Canadian students are much more open to becoming primary care physicians, even though they know that internists earn lower salaries than specialists. Granted,  in Canada the government determines the ratio of residencies for primary care versus specialties, but students are willing to fill the spots. Canada is now close to its goal of having 50 percent of its physicians practicing primary care.

In the U.S., where the Association of Medical Colleges strongly supports free choice of specialty for students, only about one-third of medical school graduates become primary care physicians. This is understandable: the average U.S. student leaves med school with $130,000 in debt. Moreover, unlike law or business students who enter the workforce immediately after graduation and can begin to pay off their debt, the average medical school graduate spends an additional three to six years in postgraduate training programs while interest continues to pile up. Meanwhile, he is painfully aware of salary differentials: recent numbers show the average family doctor earning $146,000 while the typical invasive cardiologist brings home $400,000. And at the beginning of his career, a family doctor can expect to earn much less—perhaps $100,000, before taxes.

Little wonder then, that the share of medical students pursuing careers in primary care has plummeted from 49 percent in 1997 to 37 percent in 2003; over the same span, the number gravitating toward careers in radiology, orthopedics, ophthalmology, and dermatology has sky-rocketed.

Yet we don’t need more dermatologists. But we do need more primary care physicians. Decades of research done at Dartmouth University show that when Americans see more family doctors and fewer specialists, outcomes are better, in large part because patients receive more preventive care and ongoing management of chronic diseases before they become serious. (I have previously written about this issue for Dartmouth.)

But it’s not just that the high cost of med school is leaving us with too many specialists and too few generalists. Spiraling tuition also explains why middle-class and working-class Americans are not well-represented in the profession. Keep in mind that only 20 percent of physicians come from the lowest three steps on that five-step ladder—which includes the third step where median-income families live.

According to the NEJM, a recent national survey of under-represented students reveals that the cost of attending medical school was the number-one reason they did not apply. Meanwhile an Institute of Medicine report found that while Hispanics constitute 12 percent of the population, they account for only 3.5 percent of all physicians, and though 1 in 8 Americans is black, fewer than 1 in 20 physicians is black. As Morrison observes: “Continuing this trend has far-reaching consequences for the national health care workforce, which needs diverse physicians in order to address the needs of an increasingly heterogeneous patient population.”

Of course low-income students could take out loans just the way more affluent students do. But if you are coming from a median-income household (with a joint income of roughly $50,000), it is easy to see how the idea of being $130,000 in debt could seem terrifying. After all, what if you married, your wife became pregnant, and you had to move out of your tiny one-bedroom apartment just as you were beginning your career? What if you and two fellow graduates opened a small practice—and discovered, after a year, that the three of you just couldn’t make the overhead? More fledgling practices go under than one might imagine. What if you gave birth to twins and realized that you needed to take a nine-month sabbatical from your medical career? How would you continue paying off your debt?

Students coming from families on the top step of the ladder have a financial safety net. They know that, in an emergency, it is likely that parents or grandparents will come forward with interest-free loans or a gift. Students from poorer families realize that they will be out there, alone, with tens of thousands of dollars in loans.

Finally—and perhaps most importantly—the sky-high cost of a medical education creates a shallow applicant pool, making it harder for medical schools to find the very best doctors. Schools, after all, are looking for those rare individuals who are not only fiercely intelligent, but compassionate and committed to medicine as a service profession. What a patient needs is both competence and kindness.

Yet, if medical schools are accepting one out of every two applicants, just how discriminating can they be? How often must they wind up taking students who are bright, hard-working and ambitious enough to nail the required GPA—but lack the imagination to understand that there is more to being a doctor? A larger applicant pool—a pool that was both broader and deeper—would be more likely to yield students who possess the range of talents needed to become  an exceptional physician.

When Morrison tries to find a solution to these problems, she runs into a brick wall.  She suggests that the federal government needs to do more by expanding and protecting the National Health Service Corps Loan Repayment Program, for example, and broadening the tax-exempt status of medical scholarships. “But,” she acknowledges, “these initiatives may not be top priorities for a government dealing with war in Iraq, a growing national debt, and threats of terrorism.”

“Perhaps, then,” she concludes, “our best hope lies in individual medical schools finding creative ways to reduce the need for loans and to adjust financial policies so as to reduce tuition.”

But the truth is that in order to train students, medical schools need to make enormous capital investments in the priciest, newest medical technologies. As a result, the cost of educating a student can easily outstrip the tuition the school receives. And while academic medical centers have other sources of government funding, many also provide more care for uninsured and Medicaid patients than the average hospital. They’re in no position to slash tuition.

Ideally, the federal government would find the funds to offer far more generous scholarships to students willing to become primary care physicians and practice in the areas where they are most needed for four or five years after graduating. Many might well put down roots.

As an alternative, Princeton economist Uwe Reinhardt has proposed an intriguing solution. In a “Health Affairs” article titled “Dreaming The American Dream: Once More Around On Physician Workforce Policy” Reinhardt suggests that the government might create a “human capital market in which medical students could borrow the funds needed to pay for their own medical education”—and pay off the debt gradually, the way one pays off a mortgage.  “A graduate’s indebtedness of, say, $200,000 upon entry into medical practice could  be fully amortized over twenty-five years, at an interest rate of 8 percent, with annual payments of about $18,700,” Reinhardt explains.  “If the payments were made tax-deductible, as they should be, the net burden on the physician might be no higher than half that amount. As Main Street enterprise goes, this is not an enormous debt-service burden.” [my emphasis]

“If all physicians were forced to debt-finance the full cost of their medical education,” he continues,  “then a public physician workforce policy might take the form simply of judiciously targeting tax-financed loan forgiveness to achieve certain desired social ends, be it a desired ethnic or gender mix in the physician supply, a desired specialty or spatial distribution of physicians, or a desired delivery of health services, such as care provided below the physician’s opportunity costs (including uncompensated care.) In principle, one could even use the mechanism to modulate the overall size of the physician workforce.”

“In effect,the policy would be a slight variant of the current ROTC program for the military or the National Health Service Corps for physicians. These two programs prepay the cost of the student’s human capital and then hope to collect on it through mandated subsequent service. The program proposed here would force the student to accumulate financial indebtedness first and forgive that debt only in step with actual service delivery.”

Reinhardt admits that this would be “a radical departure from conventional physician workforce policy in the United States and in other countries.” Though he notes that, “unlike the United States, most other countries do not treat health care as basically a private consumer good and medical practice as just another form of free enterprise. Instead, they tend to treat physicians as quasi civil servants with explicit social obligations.”

Would such a program fly in the U.S.? It’s hard to imagine requiring all medical students to take out loans to finance their education. (Though the truth is that today, only 20 percent pay cash for tuition—the other 80 percent go into debt.) Moreover, the idea of amortizing medical school loans, like a mortgage, over 25 years, and making them tax-deductible is appealing. It means that young doctors who are trying to start a career and a family won’t be as strapped as they are today. And if the government “judiciously” targeted loan-forgiveness programs to achieve desired social ends, we could hope to have both primary care doctors and specialists more evenly distributed around the country, in the places where they are needed most. This, in turn, could make universal health care more affordable.

Reinhardt’s proposal is just one scheme for financing the cost of medical education.  But it’s provocative, and should encourage us to begin thinking about how to open the doors of our medical community to a larger group of applicants coming from a much broader spectrum of society.

Maggie Mahar is an award winning journalist and author. A frequent contributor to THCB, her work has appeared in the New York Times, Barron’s and Institutional Investor. She is the author of  “Money-Driven Medicine: The Real Reason Why Healthcare Costs So Much,” an examination of the economic forces driving the health care system. A fellow at the Century Foundation, Maggie is also the author the increasingly influential HealthBeat blog, one of our favorite health care reads, where this piece first appeared.

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16 replies »

  1. Quit simply, this is wrong.
    I’m in the middle of applying the medical school. I’m quite sure that my competition is much greater than having to beat out only one other guy for a seat in my first medical school class.
    The acceptance rate is often well under 10%.
    There seems to be a growing voice in politics to suggest that American voters shouldn’t take care of doctors, care should be free. But not to worry, there are still plenty of young students hoping to take care of you!

  2. So, You Want To Be A Doctor……
    Lately in the media, others have said and appear to express concern about the apparent shortage of primary care doctors in particular. Typically, the main reason believed and speculated by others for this decline of this health care profession specialty that historically has been the apex of our health care system is lack of pay of this specialty when compared with other specialties chosen by potential physicians while in training, as the annual salary of a PCP is around 130 thousand a year on average, others have concluded may be the national average and factors in payers both of a private and public nature.
    Yet considering the additional attention of shortages of students in some medical schools as well, as conceived by others, one could posit hat this professional vocation that has been one viewed in the not so distant past in the U.S. as one with great esteem and respect may not be desired as a vocation by many, that requires commitment and dedication, as reflected in their training regimen in the U.S. that consumes about a third of thier lifespan. Such reasons for this paradigm shift may include:
    Primary Care Doctors perhaps more than other physician specialties seem to be choosing to practice medicine under the direction and financial security of one of the many and newly created health care systems These regional and nationally created systems are typically composed of numerous hospitals and clinics under combined ownership- frequently of a private nature that is not dependent upon their beliefs as it is perhaps on their profit motives and intentions. Yet their approach and etiology of their views regarding the restoration of the health of others are usually similar with such mergers of multiple medical facilities, which are presently preferred to save costs, it has been said, and therefore these systems have not been protested by a largely uninformed public.
    Conversely and in addition, this system of increasing popularity is not necessarily a desired method to practice medicine as a primary care physician, often stated by them as members of their employer that has the power to limit and dictate how they practice medicine. This is because, among other reasons, such doctors have largely unexpected and unanticipated limitations regarding their patients’ heath provided by them. This is further aggravated by possible and unreasonable expectations of their employer, such as mandating that doctors they employ are required to see as many patients as theycan in a day, and there have been cases of physicians being fired by a health care system- along with financial rewards for seeing more patients a day than what is determined as average visits by others. Such requirements likely and potentially affect or alter the clinical judgment determined by physicians employed in what may be viewed as authoritarian employers, which would limit the medical care they provide to their patients, as well as the quality of this care. Also, such health care systems may have their own managed health care system that may be determined by factors not in the best interest of the patients of doctors employed by the health care system.
    The primary etiology and stimulus for a doctor to practice medicine in this way is due to their frequent inability to provide and employ ancillary staff, combined with the increasing premiums for their mandatory malpractice insurance, which may make doctors financially unable to work independently.
    Malpractice laws and premiums, which is determined in large part on a state level, are an issue with those required to have this adverse aspect of their professions. Also, these premiums become more expensive for doctors, depending on the perceived risk of their chosen specialty. For example, the premiums of an OB/GYN doctor are usually higher than one of a specialty viewed less risky for lawsuits, such as Dermatology, perhaps.
    In addition, the issue of medical malpractice is also frequently a catalyst for a doctor to practice what has been called defensive medicine, which basically means that the health care provider is prohibited from relying upon their subjective factors in their assessment of their patients, which in itself raises the question of what the point was of all of their training in the first place. Because if a doctor practices medicine in such a way, it typically involves what may be considered as unnecessary diagnostic testing for their patients to rule out what may be unlikely disease states of their patients’ medical conditions. This waste of medical resources is further validated by the legality reflected in the tone of the notes a doctor usually annotates or dictates with their patients.
    Such restrictions and limitations imposed on today’s primary health care provider are usually not fully illustrated during their training for this profession, which is one that has been viewed as one that is quite noble and of great responsibility on a societal level. It seems that this perception and vocation that now is greatly misperceived due possibly to being deformed by others who may have profit as their motive for the health care they may dictate to doctors they may employ in some way, which often and likely is in conflict with their motives as doctors and how they wish to deliver needed health care to others. This may be why this medical profession may no longer be viewed as distinct from other vocations, in large part, as it seems that presently the profession of a doctor has been reduced to one dependent on the financial stability and growth of its employer, which may alter how the doctors perceive what is expected of them as well, which may affect the importance of how they view their profession, as it has been said that overall, doctors are somewhat understandably more cynical and demoralized, which may be replacing the pride they historically have viewed their callings as doctors, as well as the perceptions of patients in the U.S. Health Care System.
    Further complicating and vexing to these restrictions is the usual financial state of the individual physician, as theynormally have to pay off the debt acquired from attending medical school and training, which averages well over 100,000 dollars today after their training is completed, it has been estimated, along with this debt amount presently is about 5 times higher than it was only a few decades ago.
    Conversely, there are some who believe that doctors in the U.S. are over-paid and are compared with some corporate monster, who behaves based upon the premise of greed. In spite of how they are judged, physicians are likely not absent of financial concerns- which may be of more of an issue than many other professions, comparatively speaking, in addition of taking on more responsibility that is of greater importance compared with other vocations. Such realistic variables should be factored in when one chooses to judge the profession of a physician. On the other hand, no physician should view their jobs as no different from any other venture capitalist when rationalizing their income and motives related to this exceptional vocation as a physician, as others are more dependent on their judgment.
    It has been determined by others, and suggested often and lately, that many of today’s physicians practicing medicine in the United State do not recommend or speak favorably of their professions compared with their typical views of their profession in the not so distant past. While this self-perception physicians may have of a negative nature may be somewhat understandable it is also and potentially unfortunate for the health of the public in the future, and the nature normally associated with the medical profession which could deter ideal medical care for others
    There have been cases where doctors do in fact change careers, and get into vocational fields such as medical communications or corporate medical companies. Also, expert witnessing is another consideration for those who choose to leave their profession. Finally, other choices considered include consulting and research. The training of doctors fortunately leaves them with options not involved directly with the flaws of medical care, but this is bad for us as citizens, overall. The etiology of their departure from their designed profession is largely due to the negative state perceived by themselves as well as others of their profession as medical doctors.
    Then again, not all doctors are deities. Like others, some are greedy and corrupt, which complicates others in this profession in relation to how their vocation is viewed by others and based on limited judgment and analysis. Yet citizens overall should determine what sort of health care they desire, and it seems that often they fail to voice this right as a citizen.
    For perhaps Primary Care Physicians in particular, the medical profession and those who provide medical care clearly needed by others to some degree appears to be absent as a desired path of today’s careerist. The authentic reasons for what many believe to be a negative perception of possibly the entire health care system may never be known, yet many would agree that most U.S. citizens are understandably concerned with the state of this system of great importance to society. Yet need to be active more in assuring this necessity is more aseptic.
    “In nothing do men more nearly approach the Gods then in giving health to men.” — Cicero
    Dan Abshear
    Author’s note: What has been written has been based upon information and belief of a layperson, yet also the assessments of a patient.

  3. Here several reasons why American med school apps are down:
    How to Fix the United States Health Care System
    We Must Do It Ourselves
    “Problems cannot be solved at the same level of awareness that created them.”
    –Albert Einstein
    Identify the Components: Ones That Work and Ones That Don’t
    The first step to solving any seemingly daunting problems is to break it down into component parts, identify what works about the existing status; and what doesn’t. It’s crucial to learn from the past.
    As a physician and owner of a solo practice (small business) I’ve experienced the health care system from all sides. I’m intimately familiar with how Medicaid, Medicare, and for-profit insurance companies such as Blue Cross, United Healthcare, Aetna, and others work. I am also a consumer of health care services. I’ve had babies, knee surgeries, and other personal interactions with the American medical system. I have witnessed first-hand the extent to which non-citizens are receiving benefits paid for by working Americans. I am a small business owner so I’ve had to decide whether and how to offer health insurance to my employees. I, and others like me, am among the most qualified people in America to help fix the health care system because we have experienced health care from all angles: health care providers, patients, business owners, and tax payers.
    In this chapter we’ll explore what works and what does not work about the existing U.S. health care system. We’ll also address how to fix what doesn’t work and improve upon what does work.
    What Does Not Work
    Big Government Entitlement Programs
    Big Government does not work. Entitlement programs such as Medicare and Medicaid have spiraled out of control, increased our debt, and are a huge burden to existing and as-yet unborn taxpayers. Many people have figured out how to “game” the system and receive benefits they don’t deserve.
    In my county the office that determines Medicaid benefits is populated by some former illegal migrants who are now citizens. Through knowing people who work in that office and are dismayed by current practices, I am aware some staff members are dispensing Medicaid benefits to those who don’t deserve them. We all pay for this. I don’t want my children bearing the cost of the ballooning U.S. entitlement programs, as it will impact their and their children’s standard of living.
    Medicaid “Emergency Services Only” is a perfect of example of an entitlement program gone woefully wrong. Don’t misunderstand me – some of the recipients of this entitlement program truly deserve it. However, this benefit is dispensed to some citizens and non-citizens alike who drive brand new large SUV’s, and reside in single family homes – I’ve literally seen them deliver a baby at the taxpayer’s expense and drive away in a shiny brand new Cadillac SUV. They pay through these luxuries with cash earned “under the table,” not subject to income tax.
    The Medicare Part D prescription drug program is another example of an entitlement program which benefits pharmaceutical companies and wealthy Americans at the expense of middle class and younger Americans. Most beneficiaries of Part D are retired older Americans who did not pay enough into the system to cover this benefit during their working years. As a consequence working Americans and future working Americans as yet unborn will pay for this program. Pharmaceutical companies are guaranteed a “permanent” revenue stream through Part D unless the system is revoked or revamped. As drug costs increase, which they inevitably will, Part D will balloon out of control as has the rest of Medicare and Medicaid and be another source of national debt and excess tax burden.
    Big government does not work because it’s too costly to administer and it is too easy to take advantage of.
    For the first time in U.S. history we are seeing new generations’ standard of living decline compared to the generations that preceded them. This should be a wake-up call to all of us. If you live in the moment and have the attitude, “It won’t affect me,” think again. Your children or your friends’ children, or mother Earth will bear the brunt of our existing behaviors. Examine your motives. Be honest. Do you feel like you need more money or more stuff? Do you really need these things? Or do you need a healthy earth in which you and your children can live sustainably? Now that you’re making a baby it’s up to you to create the best world possible for them.
    Inequities in Wealth Distribution Harm Everyone
    As a species we have not solved the problems engendered by unequal distribution of wealth. The rich getting richer and the poor getting poorer is not simply an economic problem. It’s an environmental and moral one: It’s hard to care about the pollution you create as an individual when you’re worried about how you’re going to feed your family from day-to-day.
    Ostentatious displays of wealth accentuate inequities and engender jealousy. This sentiment leads to the emotion of rage and ultimately to behaviors of radical and violent extremism, terrorism being just one example.
    Dramatic inequity in wealth distribution is a moral problem that engenders social ills such as thievery, violence, and mistaken beliefs.
    National Health Care Administered by the Government is a Bad Idea
    Several countries already have national health care systems in Canada and Europe. This approach has resulted in a two tiered system: A “private” system in which the wealthy can receive any and all healthcare when they desire it; and a “public” system in which the average person must sit on a waiting list for a year or more to have their knee replacement or their heart surgery. Many of these countries have high income taxes on the order of eighty percent to pay for their entitlement programs. The government decides how the individual citizen’s money is spent. Do you think the U.S. Federal Government has proven it is the best entity to determine how your health care dollar is spent? That is the inevitable outcome of a “National Healthcare System”.
    A national health care system already exists in the United States. It’s called Medicare and Medicaid. These programs have failed miserably in several aspects: Lack of coverage: The number of uninsured citizens keeps rising despite the ever increasing money spent on Medicaid and Medicare. Those who are on Medicaid and Medicare are under-insured because these systems reimburse physicians at a rate of roughly twenty cents on the dollar. Most primary care physician practices’ overhead averages forty to fifty or more percent. Thus, physicians lose thirty cents on the dollar for every Medicaid and Medicare patient they see. This necessitates physicians to either refuse to accept Medicaid and Medicare; or to be forced to go out of business through lack of financial viability.
    Entitlement programs charge working Americans twice, and in some cases three times, for the benefits they provide their recipients: through taxes, through cost-shifting of high insurance premiums; and through obligating physicians and hospitals to provide free care to anyone who walks through the door, be they tax-paying citizens or not.
    Just so you’re under no illusions this is a small problem, look at the 2006 statistics published in the American College of Obstetricians and Gynecologists’ newsletter: Seven percent of obstetricians quit delivering babies altogether and another twelve percent curtailed services to accept only low risk clients. The reasons cited for this were declining reimbursement for deliveries and increase financial and emotional cost of malpractice insurance. A large portion of obstetric patients are illegal immigrants who are either uninsured or covered by Medicaid “Emergency Services Only” which pays dismally. This twenty percent reduction in obstetric services in a single year is truly astounding.
    The main reason reimbursement by Medicare and Medicaid is insufficient is because there is a tremendous disconnect between the consumers of these benefits and those paying for these benefits. The payers are middle class working Americans. The consumers are retirees, people below the poverty level, and people who are illegal migrants. There is a complete disconnect between those who pay for the system (middle class Americans) and those who receive the benefits.
    Disconnect between payer and recipient results in over-utilization of expensive services. If you don’t have to pay for something why hesitate to use it? Many people on Medicaid use the nation’s emergency departments like clinics because they don’t have to foot the several thousand dollar bill for an emergency department visit. If people are insulated from the cost of their prescription medications they are likely to use expensive heavily marketed drugs even if they have no proven benefit over older generic drugs.
    Solving the health care crisis in this country requires increasing the connection between the payers and recipients and dispensers (health care providers and organizations) of health care services.
    Profit Incentives…well…raise profits (and cost)
    Why should commercial insurance companies and pharmaceutical companies make billions in profits when there are 46 million uninsured Americans? It just does not make sense. That is the multi-million dollar question. How can, for example the CEO of United Healthcare justify taking home a multi-million dollar annual compensation package when there are children and adults in this country who go without basic health care needs such as vaccinations and access to medical providers?
    Commercial Insurance Companies:
    Increasing Transparency and Evaluating “Managed Care”
    Increasing Transparency
    How do you know you’re getting the health care benefits for which you’ve paid? Do you understand your EOB (Explanation of Benefits) you receive in the mail after you’ve visited a health care provider or pharmacy? Have you checked to see if the insurance company has paid the correct percentage (accounting for deductibles and co-pays) according to your written policy? Have you read your insurance policy?
    The average person (including me) has not read her insurance policy word for word. It’s usually a dense 50 or 60 page document written in legalese. The fine print within this document can contain many exceptions to the summary of the policy, of which you are unaware.
    Does your insurance company pay for “out-of-network” providers in strict accordance with the written policy?
    If you don’t know the answers to all these questions you may not be (probably aren’t) receiving the full benefits for which you are paying. Ask your insurance policy to account proportionally for every dollar of your premium – write to their CEO or CFO. They should at least send you an “annual report” – the company summary they mail yearly to investors. If you can’t get the information by asking, state you’re interested in investing in the company and can they send you an annual report? Money talks and information is power. We can’t do anything about rising health care premiums until we understand where each dollar goes. Once we understand where the dollars go, we can work to control the components eating those dollars.
    Part of how insurance companies have made away with so much of our money is because we don’t demand the information. If we sit passively and complain it accomplishes nothing. Do something! Start by demanding an accounting of where your money goes. You have a right to know.
    If we curtail existing entitlement programs we decrease the administrative burden of the Federal Government. There is a National body, the Joint Commission on Accreditation of Hospital Organizations (JCAHO), whose job is to regularly visit every hospital in the United States to see if they are living up to standards of safety and hygiene. Why not demand a Federal body that does for commercial insurance companies what JCAHO does for hospitals? Given that the largest portion of our national gross domestic product goes to health care it’s only appropriate the insurance companies be held accountable for responsible use of those dollars.
    Evaluating Managed Care
    Managed Care is a model that originated in the 1980’s to attempt to control heath care costs. The original intention behind it was to link quality to cost and use the scientific method to evaluate the merit of various medical treatments. It has undergone much iteration over the past three decades. However, managed care has failed to control cost. Indeed costs have risen hundreds of percentiles over the past three decades.
    Original versions of managed care involved a “gatekeeper” system in which insurance companies dictated patients must see a primary care physician before obtaining a referral to a specialist. Patients also had to jump through hoops to get basic services or tests ordered by the doctor covered. These factors caused great dissatisfaction among consumers of healthcare.
    The present version of managed care involves “Preferred Provider Organizations” (PPO’s): establishing “in-network” and “out-of-network” benefits paid at different levels. The idea behind this is an insurance company negotiates “discounted rates” with a group of physicians or hospitals then drives consumers to use those physicians or hospitals. The advent of PPO’s has also failed to result in controlling health care costs.
    Some of the greatest reductions in health care costs have come from hospitals and physicians themselves. Many physician groups and hospitals have taken the initiative to develop “Disease State Management Protocols” and “Clinical Pathways”. These are tools used to standardize care for common illnesses using evidence-based medicine and proven methods to control the cost of in-patient hospital care. These and similar efforts have produced the most dramatic control of health care costs, while actually improving and standardizing the quality of medical care delivered.
    Pharmaceuticals
    The FDA incentivizes pharmaceutical companies to develop and market “new and better” drugs because patents on drugs expire after ten years and the drugs can then be produced as generics. Pharmaceutical companies are under minimal obligation to prove their “new and better” drug really is more effective than older, cheaper generic drugs. Pharmaceutical companies aggressively market new expensive drugs direct to consumers on television and to physicians without being required to prove they are more effective than their predecessors. Why? They should at least be required to disclose data about efficacy, just as they’re required to disclose side effects of their drugs.
    Often new drugs are simply old drugs that have been “tweaked” by adding a minor chemical appendage so as to technically make them into new chemical compounds, although they don’t act any differently than their older predecessors. Some examples are “new” birth control pills touted to improve premenstrual syndrome and acne, which are variations on older generic birth control pills. Newer birth control pills sell for about $50 to $60 per month; whereas generic pills sell for about $7 to $10 per month. Both types of pills improve acne and premenstrual syndrome.
    Another example is newer anti-depressants such as Lexapro and Celexa. These drugs are off-shoots of the old stand-by, Prozac (fluoxetine). Prozac is now generic (fluoxetine) and cheap whereas these newer drugs are not. They are touted to have fewer side effects; and they may indeed have fewer side effects. But they have not been required by the FDA to prove it in head-to-head randomized double-blinded, placebo-controlled trials. Are they required to disclose this fact in direct-to-consumer advertising? Why not? Moreover, there are new concerns about all the anti-depressants and increased risk of suicidal or violent behavior.
    What is the logic insurance companies use to determine what they will and will not cover? For example, some insurance companies cover drugs to treat erectile dysfunction but they don’t offer maternity coverage, or coverage for contraception. Or they offer these benefits for additional premium. Why?
    We certainly don’t want to discourage development of new drugs by removing the profit incentive. However, companies should be required to disclose efficacy data in marketing to consumers and physicians. Drug development must become more transparent to consumers so they can make the best choices for their physical well-being and the well-being of their wallets.
    Malpractice Risk Drives Up Cost Via Defensive Medicine
    You’ve all heard the politicians and the media bemoan the fact that malpractice risk increases costs for everyone so I don’t want to tire you with repetition of this other than to summarize. The high cost of malpractice insurance and the emotional toll of malpractice suits cause physicians and hospitals to engage in “defensive medicine”. Defensive medicine is ordering unnecessary tests in order to prove the patient doesn’t have a serious illness and thereby avoid a malpractice suits. There is no evidence that defensive medicine results in better medical care or reduces malpractice suit. The only reliable conclusion drawn by studies of defensive medicine is that it increases the overall cost of health care.
    Malpractice suits have become something of a “lottery” – consumers looking for the multi-million dollar payoff. Defendants (physicians or hospitals) “win” eighty percent of malpractice suits that go to trial – usually after an expensive, drawn out, draining battle. The only people who truly win in these cases are the trial lawyers. Even the malpractice insurance companies take a hit but at least they can pass their cost onto the physician. Guess who the physician passes the cost onto?
    However, if physicians passed on the entire cost of rising malpractice premiums to patients, no one would be able to afford to visit the doctor. Therefore, they only pass on a portion of the increased cost and they absorb the remainder. As malpractice insurance premiums rise, guess what happens to the business bottom line? This is a large contributor to the exodus of physicians from obstetrics: rising malpractice cost and declining reimbursement. If it actually costs you money to get up at 3 a.m. and go deliver someone’s baby, why do it? It makes no sense.
    Money Spent on Extremes of Life
    Ninety percent of the health care dollar is spent on the last six months of life. This often involves intensive care for people afflicted with terminal illnesses who are on life support. They
    may require a tube to breathe, medication to keep their heart rate going and blood pressure normal, a tube for feeding in the stomach, or intravenous nutrition. We often die in hospitals hooked up to machines and being pumped full of drugs. We may not even be conscious. Is this how you want to die?
    Just because we possess the technology does not mean it is best for us to use it. In the past we died with dignity in our homes, surrounded by family members. You should consider how you want to die at a time when you have full mental faculties and can make an advance directive. An advance directive is a document specifying what measures you want taken to extend your life should you not be able to decide for yourself. Don’t leave it up to your family members to make the decision because no one wants the responsibility of “pulling the plug”.
    These extreme measures often consume the final dollars of a family’s savings and are a large component of Medicare expenses. This is money that could go to your children and grandchildren. It could pay for someone to go to college or someone to have a place to live. We have to decide for ourselves how much is enough and how much is too much?
    Okay, so I’ve identified this, that and the other thing that are wrong with our health care system. What is right with it? Well we have access to advanced technology, well-trained physicians and nurses, antibiotics, and the best science money can offer. Too bad such a huge number of people struggle to get basic health care needs met. How do we get out of this mess?
    Addressing the Big Four will “Fix” the United States Health Care System
    In summary there are four big offenders in producing out-of-control health care costs:
    Addressing each of these will decrease the cost of health care while preserving the advantages of technology and science, and increase access for everyone to basic health care services.
    The silent underpinning of many of these problems is risk. So how we manage risk determines the cost of our health care.
    Connecting the Payer with the Recipient
    It is crucial to connect the recipient of health care directly with the payer. The consumer needs to bear the risk of his health care decisions. The consumer of health care needs to directly feel the impact of system utilization in their wallet.
    Eliminating or reducing the scope of entitlement programs would go a long way toward reducing the burden of health care costs for the middle class. Recipients of Medicaid should be required to prove they are U.S. citizens. Non-citizens should not be eligible to receive benefits for free. They should have to pay for their health care just like the rest of us.
    If we do issue driver’s licenses or identification cards to non-citizens, it should be tied to proof of health insurance, proof of auto insurance, and proof of paying taxes.
    We need to decrease the influence of the middle man and limit the role of private health care insurers and the government. One approach to this would be for groups of people to participate in pooled risk plans in which premiums and benefits are determined impartially by an actuarial company. This could be self-directed, for example, by employees of large companies or other pooled risk groups. Alternatively the existing insurance company framework could be restructured so as to decrease the “fat” in the system. This would require government or some outside agency regulating insurance profitability. What justification is there for the CEO of an insurance company making millions of dollars while many Americans go without basic services? Insurance companies would certainly balk at government regulation.
    Consumers must demand greater transparency from commercial insurance companies regarding how their health care premium dollars are spent. Only when we understand where the money goes can we solve the problem of high cost.
    Exert Your Own Cost Control
    You have the power to control your individual health care costs. If everyone reduces her individual costs, the collective cost of health care will decline. Examine your utilization. The most expensive healthcare services are emergency room care, intensive care units (ICU’s), surgery, and advanced imaging studies such as MRI’s and CT scans.
    Examine your utilization of the system. First, if you are ill after regular business hours, decide if you’re sick enough to need to go to the Emergency Room at a cost of thousands per visit; or can your condition wait until your doctor is available during regular business hours for a fraction of the cost?
    Of course for emergencies like chest pain or hemorrhage you should proceed to the emergency room. But if you have chronic pelvic pain and have developed a worsening of pelvic pain the emergency department is not the best place to receive care for this problem. Childhood runny noses and rashes also don’t need to be seen in the Emergency department unless you’re concerned your child may be seriously ill (e.g. have a high fever, or is unable to keep food and water down).
    If your doctor recommends a test, ask why? What is the doctor trying to learn with the test? What are the benefits, risks, and costs of the test? Will this test lead to further testing or surgery? Are you asking for the test because you want to know a certain result? Is the test going provide the information you desire? Will the test give you any useful clinical information to better understand your health? You should know the answers to all these questions before submitting to tests.
    A perfect example of useless tests is “hormone levels”. Women ask me every day to check their hormone levels. If I can’t talk them out of it I usually oblige to satisfy them. However, female hormone tests do not tell us anything your own body can’t tell. For example, if you are having regular monthly periods your hormones will be “in the normal range”. The “normal range” is determined by measuring hormones of millions of “average” people to establish normal values. If you are over thirty, skipping periods, having night sweats, or have stopped having periods, your hormones will be in the “menopausal range” because these values are established by measuring hormone levels of millions of menopausal women. If you are skipping periods before age thirty, you probably have “polycystic ovary syndrome” caused by irregular ovulation. I can test your hormone levels to confirm, but this is usually a diagnosis that can be made by asking questions and doing a physical exam.
    If you are having raging premenstrual syndrome (PMS) I can test your hormone levels. They will most likely be “in the normal range” because hormone levels vary depending on time of cycle, age, and other factors. I can be of much more help by addressing your symptoms and developing a plan to manage them than I can by testing your hormone levels.
    Knowing your actual hormone levels does not help us treat hormonal disorders most of the time because treatment is based on symptoms, not on a number from a lab.
    If you have excess acne or hair growth it is likely your testosterone is high. I can measure it to be sure, but your body is telling me, by producing excess hair and acne that your testosterone level is high. Now if you have these symptoms a hormone level would be useful to exclude a testosterone-producing ovarian tumor. However, testosterone-producing ovarian tumors are exceedingly rare (<1/100,000). I will still recommend the test if I think it’s necessary based on your symptoms and physical findings.
    Be careful of independent labs that offer “saliva tests” for hormones. These are expensive and can be misleading. Saliva levels of hormones can be quite variable from time of cycle and time of day.
    Develop an advance directive while you’re at an age when you have full mental capacity and you can consider these decisions in a thoughtful manner. Write it down. You don’t need an attorney to create an advance directive. Simply writing it down in one page or one paragraph is sufficient. If you want it to be “official” have it notarized. Make sure it answers crucial questions in a clear fashion for your relatives to understand. Advise your relatives you have an advance directive; review it with them; and make sure they know its location. At the end of life do you want to be kept alive with a breathing tube, intravenous feedings, or drugs? To what extent and expense do you want your body to be preserved, possibly with your mind in a vegetative state? Do you want to be resuscitated (brought back to life) if your heart or breathing stops? What would be the criteria you would want established for any of these measures to be taken?
    Require Insurance Companies and Pharmaceutical Companies to Increase Disclosure, Transparency, and Accountability
    We must hold big business accountable for making the most of the dollars we pay them. Insurance companies should be required to present policies in clear, consistent, standardized language to make it easy for the consumer to compare policies. An objective oversight body similar to the Joint Commission for Accreditation of Hospital Organizations (JCAHO) should be established to assess insurance companies and pharmaceutical companies to determine if they hold up to their promises.
    Pharmaceutical companies or an outside agency (don’t we pay the FDA to do this?) should be required to conduct studies of efficacy of new drugs in an objective manner and disclose these results to the public along with the rest of their direct-to-consumer advertising.
    The free market system works: competition encourages innovation and fosters incentives for cost control. We want to preserve the elements of the free market system that function well, while not sacrificing accountability and quality control.
    Doctors Can Impact Cost by Using Evidence Based Medicine and Resisting the Temptation to Practice Defensive Medicine
    Doctors, nurses, and other healthcare providers can dramatically impact the cost of health care by resisting pressures to practice defensive medicine. One would not want to deny access to a necessary diagnostic test or treatment based on price. However, so many tests and treatments are ordered as “cya” measures.
    Often patients request tests that are unnecessary. Usually one can explain the rationale behind testing or not testing and advise the patient to make an informed decision. However, some people are set on the idea that they need this or that test to understand their health. In this instance it is usually counter-productive to try to “talk” the patient out of it, and just go ahead and order the test.
    In order for health care professionals to reduce the habit of defensive medicine, they need relief from the pressures to do so. A revamping of the “malpractice” system in the United States is long overdue.
    Eighty percent of “malpractice” suits are won by the doctor or hospital being sued. This means in most cases that go to trial, evidence of malpractice cannot be found. The stress and cost of malpractice suits is discouraging good people from entering the field of medicine; and causing many to leave medicine or limit their practice to “low risk” disease conditions.
    It has been suggested by consumer groups, physician groups, politicians, and government agencies that it is time to move to institutionalizing compensation for bad medical outcomes. The extent of damage and amount of compensation could be determined by an arbitration group. Funds for this should come from a number of sources: insurance premiums, lawyers, physicians, and consumers. Everyone should have to bear the cost of bad medical outcomes in order to curtail frivolous law suits and keep overall health care costs down over the long term.
    It is much more effective to use a carrot to get people to do the right thing, than to beat them with a stick. For the most part doctors are smart, conscientious – often perfectionist – people who strive to do their best; and if you prove to them certain disease management protocols improve care and reduce cost, they will use these disease protocols. Doctors have studied long and hard to become physicians and it is a life-long learning process that involves accumulating “continuing medical education credits” throughout one’s career.
    Evaluate How We Manage Extremes of Life
    You can maximize your chances of having a healthy term baby by following the advice in this book. You have more control than you may realize. Overall, though, ninety percent of the health care dollar is spent on the last six months of life. Premature babies are expensive and we should strive to reduce prematurity.
    This phenomenon has occurred because advances in technology have outpaced the study of ethics and responsibilities of a society to its members to provide the greatest good to the most number of people.
    We need to decide as a society: How do we want to enter and exit life? Do we want to die hooked up to machines in a vegetative state? Is this the best use of our precious resources? Do we want to risk leaving a legacy of health care debt to our heirs?
    You actually have complete control over this. By writing your advance directive, you remove the burden of your life’s decisions from others and take the initiative. I encourage you to write an advance directive and make your friends and family aware it exists. It doesn’t have to be long – a page or a paragraph. It doesn’t need to be written by a lawyer or notarized. However, if you take the trouble to have it notarized it may increase the likelihood it is taken very seriously.
    You must consider all the possibilities: What if you’re completely paralyzed or brain damaged in an accident? Or rendered into a coma? What type of medical interventions do you want to take place? I urge you to think about these things and write them down: Your family’s lives depend upon it.
    Only by tackling the four major factors increasing health care cost in this country can we obtain a safe, logical, cost-effective health care system. I encourage you to do your part.

  4. Docanon–
    First, thanks for commenting and providing so many sources on why students do or don’t go into primary care. I’ll look at them.
    The one thing I would say is that things have changed since the mid to late 1990s when HMOs were peaking. (See my reply to Diane in my long comment above.)
    Secondly,you are entirely right when you say that “those students from wealthy backgrounds taking on government-subsidized loans are basically making a good investment for their families, with the attached guarantee of never truly experiencing economic hardship. My debt is considated at a ridiculously low rate.” In that sense their debt is not a burden.
    On whether med schools, biz schools and Wall Street compete for the same students, my view is based, in part, on my experience covering Wall Street for Barron’s from the late 1980s to the late 1990s. Most of the MBA’s and Wall Street people I interviewed during those years were, by and large, far less intelligent than the doctors I interviewed when I wrote Money-Driven Medicine. Most very successful MBAs and Wall Streeters that I knew in the 1990s could never get into Med School.
    But this is in part because, before the early 1980s, very bright college students from excellent universities just wouldn’t consider going to B-School–or to Wall Street. Many considered “big business” the biggest problem in this country, and Wall Street was stuck in a long bear market.
    So the MBAs that I encountered in 1990 were not the cream of the crop. In recent years, this has changed. Econ has become the most popular major at elite universiites, and top students compete to becoem investment bankers.
    Though I have to say that even the young investment bankers, analysts and money-managers that I interviewed when I wrote Bull! A History of the Boom, 1982-1999 (2003) were not nearly as bright as the doctors I interviewed for Money-Driven Medicine (published in 2006).
    I did find a group of very, very intelligent Wall Streeters, but they tended to be 55 and older–people (like Warren Buffett) who were among the brilliant few who survived the 1973-74 crash and the bear market of the 1970s, and continued to make money for their clients.
    This was also a generation that considered money-management a “profession.” They saw themselves as “stewards” of other people’s money and dressed up to go to work (often in black suit and bow tie) as one money-manager explained to me “out of respect for the money.”
    Today, this seems quaint, but like doctors, the best of them really believed that it was their job to put their client’s interest ahead of their own (financial) interest.

  5. Peter–I agree with you about cultural drive. (Though there are always those few loner kids who just want to get away from everything their parents and community represent. And they do it with virtually no parental support or community support– though if they’re lucky, they find support in college.
    On nature vs. the city: this is a very subjective topic. But I do find that nature becomes more and more meaningful the older you become. (And I’m not that old!) But when I was very young I was just too impatient to take it in. I greatly preferred art to nature. Now, I’m leaning toward nature.
    And it’s been very interesting to see my son’s conversion to nature at such an early age. Here was a kid eager to take the subway to Times Square when he was 7 (they had stores selling used comic books.) Later, he discovered museums. Now, he’s living in a city and missing the country . . .though he’s still immersed in art.

  6. Hi Maggie-
    I think there might have been a typo in your response. Not sure I said everything you quoted. But here are some refs on the debt vs. specialty choice issue.
    Kahn et al. Is medical student choice of a primary care residency influenced by debt? MedGenMed 2006.
    Rosenblatt RA et al. The impact of U.S. medical students’ debt on their choice of primary care careers: an analysis of data from the 2002 medical school graduation questionnaire. Acad Med. 2005 Sep;80(9):815-9.
    Kiker, B. F. Relative income expectations, expected malpractice premium costs, and other determinants of physician specialty choice. J Health Soc Behav 1998.
    Colquitt WL et al. Effect of debt on U.S. medical school graduates’ preferences for family medicine, general internal medicine, and general pediatrics. Acad Med 1996 Apr;71(4):399-411.
    Rosenthal et al. Influence of income, hours worked, and loan repayment on medical students’ decision to pursue a primary care career. JAMA 1994 Mar 23-30;271(12):914-7
    …and this is the single-institution longitudinal study with the most detailed data on students’ economic background:
    Cooter R, et al. Economic diversity in medical education: the relationship between students’ family income and academic performance, career choice, and student debt. Eval Health Prof. 2004 Sep;27(3):252-64.
    It’s a mixed picture, but even the studies showing a statistically significant relationship between debt and specialty choice do not demonstrate a large effect magnitude…much smaller than the effect of income expectations.
    Asking for higher income for doctors of any specialty is considered uncouth, but rephrasing greater income as “loan repayment” is more politically acceptable. I think this is why med school deans, etc, cling to the idea that it’s debt that drives students away from Pcare. Targeting debt is also less threatening to highly paid specialists, who would rather not see a narrowing of income disparities between medical specialties. (After all, what are they going to use to threaten Congress during the SGR debate every year if there aren’t a few PCPs ready to stop seeing Medicare patients? Anesthesiologists can hardly make the case that they won’t be able to put food on the table.)
    There is a big difference between a med student from a wealthy family taking on debt and a med student from a deprived background taking on debt. The debt sizes can be quite different. Also, those students from wealthy backgrounds taking on government-subsidized loans are basically making a good investment for their families, with the attached guarantee of never truly experiencing economic hardship. My debt is considated at a ridiculously low rate.
    On the medicine-vs-business side, I agree that getting into med school is harder. That’s why the decision to enter the profession is associated with economic sacrifice (hard to believe given how nice doctors’ incomes can be, but probably true with the ultra-high salaries of I-bankers, traders, and consultants). Do these two types of careers compete for the same students? I have to disagree with you: they do, especially at the upper end of the talent spectrum. This is true at least anecdotally among my college classmates…and I’m unaware of the research literature on this question, but it sure seems like med school applications spike a few years after each economic downturn.

  7. Maggie, by “cultural drive” I meant that usually kids do what their parents do, they tend to elevate to the intellectual and economic level of their parents – usually the father. Kids that want/can to go outside their community/cultural norm need a lot of support and encouragement from their parents and peers and from the community they need to go to to be successful. This support is not always there. Black kids wanting to succeed outside their community are labeled, “too white”; from direct experience with Alaska Natives living on reserves any kid that wanted to leave the reservation to succeed was scorned and branded a cultural traitor. If anyone had all the free government tools necessary to succeed, native kids do have that access, just not the drive. Humane nature is such that if a group is unsuccessful then they want to drag down those individuals in the group who want to leave and be something different. As for the beauty of any region attracting people, that would be true, but you have to live with more than sunsets, trees and mountains to look at to have a full life. How many of us have gone on vaction and thought about moving there only to look at the day-to-day reality to realize it’s a difficult process with a lot of giving up.

  8. Docanon, Diane, Phyician Stafffing,Eric, Barry and Sonoma. anoni and Peter —
    Thank you all for your comments.
    Docan: With regard to why fewer students go into primary care, you write:
    “The current linkage between medical school debt and specialty choice is questionable. Studies on what factors influence the decision to enter primary care don’t bear out the conventional wisdom.”
    You also write: “Trying to get the elite class to work in rural America for rural America pay is not going to be possible or cost effective. If you think there is a lot of disease in rural America now, wait until an elite class doc digs up a whole lot more trying to increase billings.”
    How true. We’d see an epidemic of restless leg syndrome, autism in 8 month old babies, bi-polar five-year olds, and, of course, angioplasties.
    Could you cite the studies you have read? The studies I’m familiar with say the opposite. Also the medical school deans and professors that I talk to say that, because of the debt load, students are avoiding the lower-paid specialties.
    You also write: “I think it’s an issue of social caste more than anything else. Students who are from more modest economic backgrounds and underserved communities are more likely than others to return to these communities and practice primary care. These students have lower income expectations. Students from rich families enter these types of practices relatively rarely. They’re more likely to end up in highly paid fields like derm or radiology. Students from rich families also have little or no debt.”
    For whatever reason very few students from rural areas apply to Med school. Those who do tend to back to those areas, as you suggest. But the majority of lower-income med school applicants are from cities and just as comfortable in cities as those from an upper “caste.” If anything, lower and middle-income students may feel more at home at the top academic medical centers than some of their wealthier peers who grew up in the suburbs since the very best academic medical centers tend to be located in or near inner cities and serve a disproportionate number of very poor patients.
    On your last point: in fact, while 60% of all med students come from families in the wealthiest fifth of U.S. families (measured by income) and 80% come from the wealthiest 40%, 80% of all med students graduate with loans. So it’s really not true that the wealthiest students graduate with “little or no debt.” Many of these bright students who come from extremely affluent families are very independent.
    Finally, do fewer U.S. students apply to med school because they could make more in business and finance? Maybe. But I really don’t think the business schools and Wall Street are competing for the same students. Med school is much more demanding and the applicants have much higher grades and are required to take much harder courses. It’s a different pool. Most people who could get into business school couldn’t get into med school.
    Also, the careers are very different. Medicine isn’t a business; it’s a profession. The doctor is supposed to put his patients’ interests ahead of his own. An anecdote: When greeting the incoming class of medical students at UCSF a few years ago, Dr. David Kessler, the president of the med school, talked about the doctors who had stayed in the hospitals in New Orleans, risking their own lives as they tried to care for their patients. “If you wouldn’t be willing to do that,” he told the incoming class, “there’s the door.”
    The CEO of GE wouldn’t expect employees to stay at their desks to protect the computers when the waters were rising.
    Alex–
    I think you are exactly right. Medical students want what many of us want: to live in a place with multiple cultural opportunities, etc. But if given financial incentives to start out someplace else, some might put down roots–realizing that a quiet place might be a better place to raise children . . .
    Some years ago my sister-in-law graduated at the top of her class at a prestigious medical school where she had a full scholarship that required her to work in an underserved area after graduation. She wound up in an isolated rural community in the northwest, met her husband (also a doctor) while she was there, and they are practicing there today.
    I also agree that if we paid primary care doctors more, we would not have a shortage.
    Physician Staffing–thanks very much.
    Diane–It turns out that more students were applying to med schools in the mid 1990s when HMO’s were in their heyday. These were students who were okay with the idea of managed care—they knew what they were getting into. Many were women who planned to have families and liked the regular hours of an HMO practice. After the backlash against the HMOs (at the end of the 1990s), students who wanted to be primary care docs could no longer rely on HMO’s to provide job security. Meanwhile, the cost of setting up your own practice as a primary care doc spiraled thanks to the rising cost of real estate plus wages for competent staff and malpractice insurance. And the number of students going into primary care plummeted.
    Eric–You ask some interesting questions:
    1.)what percent of American born PHD graduates (all disciplines) come from each income area?
    2. was the point of the piece to examine the high costs of medical education or a concern for ‘lack of socioeconomic diversity’ in medical students across the USA?
    3. most students already defer loans during residency and many refinance to create a single loan with terms as you mention above? And if they are federally guaranteed, those consolidation rates (my own included) are generally below ‘commercial’ loan rates.
    I can answer #2: both. The high cost and lack of socioeconomic diversity are inseparable.
    Maybe you could Google question 1 & 2 and get back to us?
    Barry: You wrote:
    “medical school tuition increased much faster than business school tuition in recent years. One of the reasons for the slower growth in business school tuition was significant push back from the corporations that hired most of the graduates. They told the business school administrators in no uncertain terms that rapid tuition increases would force the employers to raise salaries higher and faster than they deemed desirable so the graduates would be able to repay their loans. They would also have to raise pay for the slightly more experienced people to maintain an appropriate spread between them and the new hires.
    There was no comparable push back against the medical schools.”
    This is very interesting and makes sense. The cost of running a biz school isn’t rising why, thanks to the skyrocketing cost of medical technologies, plus the larger number of uninsured patients, the cost of running an academic medical center that both trains doctors and care for a large number of poor patients is rising.
    I agree with your incentives to persuade physicians to work where they are most needed. . .
    Sonoma– see Peter’s comment. 3 percent of Canadian docs head south. Most Canadian docs prefer their system. As for the notion that med school applicants can “negotiate” lower tuition–tell that to the Dean of admissions at Yale. (I don’t know where you heard this, but it’s not true. Students with few financial resources can apply for loans and the few scholarships available but that’s decided on need, not on merit. There are plenty of students with close to perfect GPAs applying to medical school.
    Peter–
    You write of the difficulty of getting “elite” class docs to practice in rural areas and suggest we need to recruit more kids from rural areas to go to med school–though you’re concerned that the “cultural drive” isn’t there.
    My suspicion is that while certain very wealthy students might be unhappy in a rural area, many upper-middle-class and middle-class students would find themselves very happy in the country. There are huge stretches of Canada that are beautiful.
    I think of my own son who grew up in Manhattan and then went to school in Ithaca New York–a beautiful campus about 8 months of the year. (The other 4 months it is very cold and very cloudy). He loved it, then discovered upper Vermont (where there are no shopping malls for miles.).Although he likes museums, films, etc, he now has no interest in living in a city. And because he grew up in Manhattan and went to public schools, he gets along with all sorts of people.
    So I think if med schools had more middle-class and upper-middle class students, persuading docs to settle in rural areas wouldn’t be such a hard sell.

  9. I’m not sure if Canada has it right when it comes to getting docs and getting docs to practice in rural areas, Canada does have a lot of rural acreage. I do know that a medical education in Canada is cheaper and some self serving docs (3%) do come south for the big bucks while slamming Canada’s “socialzed” medicine – after they’ve gotten their cut rate Canadian education of course. But there seems to be shortages of docs anyway. One of the biggest problems is getting the doc’s wife to relocate to a rural area. There are also considerations of education and, “fitting in” for their children. You also have to consider that an outsider doc comes to a rural area with no cultural, family or friends ties to the community, a pretty lonely prospect. I do think, as sonoma said, NPs and PAs along with some high tech communication equipment can do pretty much what a resident doc can do, but you’ll also need a good medical transporation system – who’s going to pay for that. I believe in the end there needs to be a way to attract local talent into medical school which will go back to their own community to practice. I think the intellect is there, I’m not sure if the cultural drive is there though. Trying to get the elite class to work in rural America for rural America pay is not going to be possible or cost effective. If you think there is a lot of disease in rural America now, wait until an elite class doc digs up a whole lot more trying to increase billings. Has anyone looked at the percentage of uninsured in rural areas as opposed to urban areas. If there is little health insurance how will the doc get paid? Single-pay, guv’mnt run will at least ensure a steady and predictable reimbursment system.

  10. perhaps medical school(and tuition) should be left to those who feel they need it to pass the boards…
    why should paying enormous amounts of money to medical institutions be a requirement to take the board?
    why should the exam itself (and a nominal registration fee) not be the judge of who qualifies to sell services in the market?
    a central committee is not the market, I think alot of the inefficiency is because of this bottleneck.

  11. This is just another “Canadian socialized medical system good…US private enterprise system bad” argument. Maggie is nothing if not reliable on this point.
    Couple notes:
    1) How many of those Canadian docs head south at some point?
    2) If you want to guarantee fewer (and lower quality) US medical school applicants, go with the civil servant model.
    3) The cost of a medical education is a bargain at even $300,000. Bargain.
    4) As to the primary care “problem,” most physicians are overqualified. NP’s and PA’s can perform most of these functions just beautifully.
    5) A well-qualified student accepted at multiple medical schools can easily bargain on tuition. The less qualified might have more of a problem, but that’s to be expected.

  12. At a conference a couple of months back, David Brailer and Jonathan Gruber were the luncheon speakers on successive days. One of them (can’t remember which) made the point that medical school tuition increased much faster than business school tuition in recent years. One of the reasons for the slower growth in business school tuition was significant push back from the corporations that hired most of the graduates. They told the business school administrators in no uncertain terms that rapid tuition increases would force the employers to raise salaries higher and faster than they deemed desirable so the graduates would be able to repay their loans. They would also have to raise pay for the slightly more experienced people to maintain an appropriate spread between them and the new hires.
    There was no comparable push back against the medical schools. The most likely candidates to assume that role would be the academic medical centers, but they pay the new docs comparatively modest salaries because the internship or residency is an extension of the doctor’s education as opposed to a transition to full fledged employment. Since most of the new doctors eventually go into private practice, there is really no effective countervailing force to assume the push back role.
    My own preferred solution to both the shortage of primary care doctors and the number of doctors willing to practice in rural areas is to pay them more but also demand more accountability. They should be required to use electronic medical records and use emerging price and quality transparency tools to refer patients to the most cost-effective providers. They should also assume a larger role in getting patients to articulate their wishes with respect to end of life care well before it becomes an issue. In short, they should earn their higher pay by using their expertise to safely drive down utilization of low value (and sometimes even harmful) healthcare services. As for inducing doctors to practice in rural and other under served areas, the model should be similar to combat pay in the military. If we want the docs to accept the undesirable (to most of them) lifestyle associated with rural areas, we should pay them as much or more than they could make in the big city. With the right set of incentives, markets can work and money can talk.

  13. Maggie-
    1. just for comparison, what percent of American born PHD graduates (all disciplines) come from each income area?
    2. was the point of the piece to examine the high costs of medical education or a concern for ‘lack of socioeconomic diversity’ in medical students across the USA?
    3. most students already defer loans during residency and many refinance to create a single loan with terms as you mention above? And if they are federally guaranteed, those consolidation rates (my own included) are generally below ‘commercial’ loan rates.

  14. It’s worth mentioning that physicians are human beings too (superhuman if you ask them)and want a lot of the same things other folks do which is a big reason why they locate where they do and why it is hard to get them to certain areas. Living in cities with culture, art, great restaurants, good schools, and Mercedes dealers and the like is nice.
    I have 7 friends in medical school right now and they are all going for dermatology, ortho, or anesthesia. Dermatology has exploded because it has got to be the best 9-to-5 job in America. Ortho and anesthesiology offer some advantages too, like pretty flexible schedules. The money is great which helps, but I think there are other things that are driving folks toward specialties. That said, my guess is that if primary care paid $300K we wouldn’t have much of a problem
    .

  15. Interesting post Maggie. Hadn’t heard of this forced-debt idea before. In the end it’s just a way of modulating physicians’ relative income to achieve a socially desirable specialty and geographic phsycian labor mix. This could also be achieved by altering payments for physician services, which now reward procedures and imaging much more richly than the services usually occurring in primary care.
    The current linkage between medical school debt and specialty choice is questionable. Studies on what factors influence the decision to enter primary care don’t bear out the conventional wisdom. In fact some studies (usually single-institution, but these single institutions usually have the greatest data detail) show that students who have more debt are more likely to go into primary care.
    I think it’s an issue of social caste more than anything else. Students who are from more modest economic backgrounds and underserved communities are more likely than others to return to these communities and practice primary care. These students have lower income expectations. Students from rich families enter these types of practices relatively rarely. They’re more likely to end up in highly paid fields like derm or radiology. Students from rich families also have little or no debt.
    On the Canada issue, I’m curious: what is the ratio of medical students to total population in Canada vs. the US? The applicant-to-student ratio could be affected by the denominator population just as easily as it could be affected by interest among prospective students. Also, what do other professions in Canada make, relative to Canadian physicians? For many U.S. med students the choice to go to medical school involves turning down lucrative positions in consulting and finance.

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