The broken medical school business model

Why do we continue to produce racially homogenous doctors who aren't prepared for a heterogenous marketplace?
By: | Issue: January/February, 2019
January 25, 2019

The enormous cost of medical school in the United States has made medical education primarily attainable by students from privileged backgrounds: only the most well-off aspiring doctors can afford the four year price tag of approximately $250,000. In terms of the ethnic composition of medical school grads, in 2017, the majority of them were white, according to the Henry J. Kaiser Family Foundation.

The business model that’s driving this outrageous pricing structure, and is graduating such non-diverse medical professionals, must be remedied in order for tomorrow’s doctors to be able to effectively care for an increasingly racially diverse American population.

Taking steps
NYU recently took a step in the right direction by being the first American medical school to offer 100 percent free tuition for its students. As health-oriented news site STAT pointed out, “while a handful of medical schools, such as Columbia and UCLA, have attempted to provide tuition-reduction programs or limited full-tuition scholarships, NYU’s blanket guarantee is the first of its kind.”

NYU’s ability to offer cost-free med school tuition was made possible by the generous private donations that it receives, including a gift of $100 million from Home Depot founder Kenneth Langone. Also helpful was its decision over the past 11 years to set aside $500 million in excess cash, which accumulated as a result of its previously charged tuition being one of the highest in the country. The investment interest from these two sources will cover tuition fees for years to come.

Dealing with debt
Unfortunately, the majority of American medical schools haven’t been recipients of gargantuan gifts from such mega-donors as Langone, nor have they invested their money as wisely as NYU. In fact, many American medical schools are dealing with over investment in fixed assets that has left them with significant debt to pay off.

The saga of University of Texas’ Dell Medical School is representative of the fixed asset quandary: in 2016, the construction budget for the school swelled to $436 million from its original projected cost of $334 million. Add $25 million of annual funding from the Texas Board of Regents and $35 million of yearly taxpayer support from Travis County voters (both since 2012), and the school’s price tag over 20 years will be close to $1 billion.

Dell Medical School’s humongous construction expenditure will result in many years of high student tuition in order for the school to pay down its debt. This premium price tag will create a need to recruit students from financially secure backgrounds who will pay the full freight tuition, and those students will mostly be white.

Such a lack of med student diversity—and, ultimately, doctor diversity—has a direct impact on the care that medical professionals are able to provide, according to Health Providers for Diversity Coalition (HPDC).

Lost in translation
In a Rasmussen College study about diversity in the healthcare industry, HPDC produced a report in 2017 that offered an enlightening conclusion:
“By encountering and interacting with individuals from a variety of racial and ethnic backgrounds during their training, health professionals are better able to serve the nation’s diverse society by having broadened perspectives of racial, ethnic and cultural similarities and differences.”

Along with the strategic importance of doctor diversity, there’s also the human aspect: as detailed in the health policy journal Health Affairs, in 1980, South Florida resident Willie Ramirez was hospitalized after blacking out. During the two days he lay comatose, a misdiagnosis of a brain hemorrhage as a drug overdose left him a quadriplegic. The reason for the misdiagnosis? The non-Hispanic physicians who admitted Ramirez didn’t understand the colloquial Spanish that his family used to describe his condition.

Two key principles
To make high-quality medical education accessible to a more diverse population of future doctors, the majority of whom come from lower income backgrounds, medical schools need to establish a tuition reduction model that relies on two key principles:

  • Medical schools must digitally enable their curricula. By integrating a flipped classroom approach that delivers online instructional content along with robust student analytics, schools can drive down the cost of human resources as well as physical infrastructure. This blended learning methodology also allows students to acquire the tools that they need to better manage their educations and achieve superior outcomes—including improved medical board scores.
  • Medical school spending on fixed assets must be better managed and controlled. Medical schools from coast to coast have spent tens of millions on the construction and maintenance of beautiful buildings, impressive common areas, and spectacular social spaces. While these features certainly enhance the student experience, they’re also the cause of exorbitant tuition levels that make attending medical school impossible for qualified students of color and from low income backgrounds.

NYU’s decision to make their medical school tuition-free was a bold move that was primarily made possible by decades of excessive tuition prices. While most medical schools across America aren’t able to replicate NYU’s strategy, they can take specific steps that have delivered proven results in order to make medical education attainable for a greater population of qualified and diverse aspiring doctors.

David Lenihan is the co-founder and CEO of Tiber Health and the CEO of Ponce Health Sciences University (Ponce, Puerto Rico and St. Louis, MO).