Golden Medical Handcuffs

I suspect we will be hearing more from medical school drop outs who became famous creating billion dollar companies. Call it the Zuckerberg Zeitgeist.

UK physicians can leave medical school up to ￡80,000 in debt , an amount they may never pay off under the terms of their 30-year loan. Average undergraduate student loan debt for US 2016 graduates was $37, 172.

In 2011, the average medical student debt was $173,000, with the same number, 86%, of graduates carrying debt.?The average medical school debt rose to $178,000 in 2012, and by 2016, the average medical school debt was up to $190,000, with about 25% of graduates carrying debts higher than $200,000.?

??According to the AAMC , your average medical school graduate in 2019 had $201,490 of debt.?This debt influences everything from choice of specialty to decisions about marriage and babies.

Average Medical School Debt in 2022. With the high cost of medical school comes high levels of debt. The average medical school debt in 2022 is?$241,600?in student loans and other debts, according to the Association of American Medical Colleges (AAMC). This is up from $127,500 in 2000 and $199,100 in 2012.

Here are the top 10 highest paid specialties by annual average compensation:

1. Plastic surgery ($576,000)
2. Orthopedics ($557,000)
3. Cardiology ($490,000)
4. Otolaryngology ($469,000)
5. Urology ($461,000)
6. Gastroenterology ($453,000)
7. Dermatology ($438,000)
8. Radiology ($437,000)
9. Ophthalmology ($417,000)
10. Oncology ($411,000)

Those numbers do not reflect the fact that many students marry other students in debt and you get the picture. The results are skewed specialty choices, stress,impact on family planning, maldistribution of primary and specialty care, demographic maldistribution, the inability to buy a house and much more.

Things are only getting worse.

• postgraduate borrowers now account for roughly 40% of all student debt but represent just 14% of students in higher education.
• loan forgiveness programs, subsidized by the taxpayers, are growing
• many professionals, including doctors, lawyers and scientists and engineers , either because they are unable or unwilling, will never pay off their debts.
• Residents are choosing to work for NFP or public hospitals because?they can take advantage of loan foregiveness programs, once again calling into question whether NFP hospitals should lose their tax exempt status.

Medical schools, corporate medicine oligopolies and academic medical centers have to rethink how they do things. The primary issues are what they teach, how they teach it, how they are structured, how they define and measure outcomes and competencies and their business model. Given the math, they are unsustainable at the present rate.

What are the answers?

1.?Cut costs and pass the savings on to the students by changing the 4 x 4 structure of medical education.

2. Continue to teach with technology, particularly those designed to reduce costs

3. Rethink brick and mortar facilities given the emergence of online educational tools. Cut overhead and eliminate waste.

4. Increase combined undergraduate-medical school offerings that, for qualified students, decrease the number of years.

5. Given the rising number of employed physicians, increase loan forgiveness to potential employees.

6. Rethink student loan programs

7. Make debt repayment and personal financial planning part of?medical school education.

8. Explore private options whereby investors pay in exchange for a claim on future revenues.

9. Increase state support for medical schools, particularly those with underserved populations. Pay for education instead of creating it as an unfunded mandate placed on the backs of clinical faculty generating clinical revenues.

10. Use medical school business models to change from fee for service, specialty driven care to value based primary preventive care.

Pushback against the corporatization of Sick Care, Inc, designed to empower doctors, has increased as evidenced by:

1. Physician innovation and entrepreneurship ecosystems and networks
2. By doctor, for doctor investment and financial planning platforms
3. Strikes and other labor actions
4. Medical education and training reform
5. Clinical drop out doctors making non-clinical career transitions
6. Growth of physician social media sites
7. Physician members of Congress and state and local offices and political action groups to prevent further deterioration of the private practice business model
8. Increasing employed physician dropout rates
9. Patients' dissatisfaction with the US Sick care system of systems
10. Rising costs and inflation
11. Stakeholder demographic changes
12. Different generational attitudes about work and its purpose
13. The push to remove non-compete clauses

Student loans have seen almost 157 percent in cumulative growth over the last 11?years. By comparison, auto loan debt has?grown 52 percent while mortgage and credit-card debt actually fell by about 1 percent, according to a?Bloomberg Global Data analysis of federal and private loans. All told, there’s a whopping $1.5 trillion in student loans out there (through the second quarter of 2018), marking the second-largest consumer debt segment in the country?after mortgages,?according to the Federal Reserve . And the number keeps growing.

Will tuition free medical school make a difference? If so, in what?

The present medical education business model is contributing to our dysfunctional sick care system. While the number of new medical schools continues to increase and the number of applicants to medical schools is the highest it's ever been, there is trouble in River City.?The effects of student debt are long term and pervasive and influence family planning, home purchasing, career choice, whether to take a fellowship and much more and are compounding when one indebted medical student marries another.

Every medical school has it's own ceremony for incoming students. I got a drug industry paid black bag with my name on it and a stethoscope before the regulators banned gifts to doctors. UC Irvine grads get a hand held ultrasound device. Now there are white coat ceremonies with recitation of the Hippocratic Oath or some modification of it. Perhaps, as part of the theater,?we should include putting golden handcuffs on every student, their parents and the taxpayers who are footing the bills. Or, just don't spend so much and save more.

Arlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs on Twitter@SoPEOfficial and Co-editor of Digital Health Entrepreneurship

Updated 2/2023