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.