One of the biggest financial bubbles in the history of the United States is growing right under our noses — medical education. A bubble occurs when the cost of a commodity exceeds its value, but consumers continue to buy the commodity despite its inflated price. Today, students invest in medical education at costs far above what they can afford, with 75% of all US doctors graduating with debt in 2018 and a median debt of $202,000 [1]. Students who invest in medical education do so expecting that they’ll make incomes similar to current medical professionals, but this might not be the case. While employment is projected to increase significantly in the healthcare sector in the next decade (projected 7% yearly increase), wages are not expected to increase as quickly (projected increase of 5% yearly) [3]. If the cost of a medical education continues to increase as it has in previous years due to increased competition in the medical field and the high prestige associated with being a doctor, the cost of medical education may become greater than the financial returns [4].
In the past, a medical education essentially guaranteed long-term economic returns. Why shouldn’t we expect this to continue to be the case? With technological advances in the medical field outcompeting medical professions and increased competition for lucrative specialties leading to lower amounts of highly successful physicians, the continual increase in income for medical professionals as a whole is far from guaranteed. This is true despite the steady increase in medical spending across the board. Medical school hopefuls are usually banking on the fact that the public is willing to pay rapidly increasing rates for the services of healthcare professionals. Right now, this trend is holding true and medical costs for patients are continuing to increase at an alarming rate. However, we will reach a point at which healthcare is too expensive and the market will crash from a lack of patient ability to pay for services. Many individuals are currently unable to pay for their expensive healthcare bills and thus, this situation is not an abstract hypothetical, but looms on the horizon. If we continue along the same path, we may see this scenario occur in the coming decade. In this case, the bubble would violently burst, leaving healthcare professionals with an education that is worth far less than what they paid for it [5].
How can this scenario be avoided? In one proposal, medical school tuition fees could be reduced by providing the same education through online learning platforms or basic simulations, saving on professor salaries and expensive laboratories. The crucial challenge with this method would be ensuring a quality of education consistent with the current educational standard of US medical schools. With the rise of online learning around the world, this solution becomes increasingly feasible and likely to be attempted. Another solution is for medical schools to offer scholarships to cover tuition expenses. In 2018, NYU School of Medicine announced that it was offering full-tuition scholarships to all current and future medical school students regardless of need or merit [6]. Other medical schools followed suit, and Columbia Vagelos College of Physicians and Surgeons and Weill Cornell Medical College have both begun to offer full-tuition scholarships for all students that qualify for any degree of financial aid. As a welcome consequence, these scholarship programs will enable more medical school graduates to pursue specialties such as family medicine, psychiatry, pediatrics, and geriatrics, as the pressure to pursue higher-paying specialties in order to pay off debt will be reduced. It is likely that other schools will follow suit and transition to a scholarship-based model of financial aid.
With the rise of online learning and scholarship models for medical education, low-cost and high-value education seems increasingly likely. In order to prevent the medical education bubble, our main focus should be to enact these solutions proactively rather than wait for an unexpected crash that would necessitate them. An unexpected collapse of the medical education market would hurt students, healthcare professionals, medical schools, healthcare institutions, and patients. Steps have been taken by a few leading medical schools to release some of the air out of the medical education bubble, but this is not enough. A healthcare sector collapse in the US could seriously harm the national and international economies, as healthcare accounts for a fifth of the US economy and forms the backbone of international markets that are intertwined with the US healthcare services [7]. As such, it would be extremely prudent to avoid such a collapse. It is up to medical schools to intervene before the bubble bursts.
References 1. Powell, F. (2018). What Medical Schools Are Doing to Reduce Student Debt. US News. 2. Walsh K. (2016). The Cost Bubble in Medical Education: Will it Burst and When?. Annals of medical and health sciences research, 6(4), 257–259. 3. Bureau of Labor Statistics. (2019). Physicians and Surgeons. Occupational Outlook Handbook. 4. Asch DA, Nicholson S, Vujicic M. (2013). Are we in a medical education bubble market? N Engl J Med, 369:1973–5. 5. Berwick DM, Nolan TW, Whittington J. (2008). The triple aim: Care, health, and cost. Health Aff, 27:759–69. 6. Bernstein, C. A. (2019). The impact of tuition-free medical education. Clinical Psychiatry News. 7. National Health Expenditure Accounts. (2019). National Health Expenditure Data. Centers for Medicare and Medicaid Services.