Thursday, November 17, 2016

Why is medical school tuition so high?

A couple of weeks ago, BoingBoing posted a picture of a tuition and fee schedule for San Diego State University in 1959. Tuition was free for California residents but they still had to pay $33 for materials and services and $8 for student activities. Nonresident tuition for a full-time student was an additional $127.50. These charges were apparently all per semester.

Using this handy inflation calculator, the total per semester cost for a California resident of $41 equates to $340.16 in 2016 dollars, an inflation rate of 729.6%. Free tuition ended in 1970. Current tuition and fees at San Diego State for the year are now $7084 or $3542 per semester—compared to $340.16 that’s a 941% increase.

Just for fun I decided to run the numbers for my medical school tuition. In 1967, my first year, the total tuition for the year was $1200 or $8674.06 in 2016 dollars. The current tuition for the private medical school I attended is $52,000, a 499% increase.

I started my internship in New York City in 1971. My salary for the year was $11,000 which is the equivalent of $79,512.22 $65,654.79 [corrected 11/22/16] today. The average salary for an intern in New York City is $55,000-$60,000. It should come as no surprise that nearly half of all interns surveyed for Medscape's 2016 Residents Salary and Debt Report think their compensation is not fair.

The average debt for a 2016 medical school graduate is now $170,000. Considering the interest accruing while the new doctor is in training, the cost of repayment will be well over $400,000 by the time the residency is finished.

College tuition has increased for a number of reasons. A 2015 New York Times opinion piece reviewed many of them. The author pointed out that "administrative positions at colleges and universities grew by 60 percent between 1993 and 2009,” or about 10 times the rate of growth of tenured faculty positions.

Here's what has happened in healthcare.

Why has medical school tuition increased so much? I have not found a plausible explanation. It can’t just be more administrators, can it?

If you know why medical school tuition is so high, please comment below.


Anonymous said...

Tuition has been rising faster than inflation across higher ed. It's been argued that easy availability of student loan $ accounts for that.

Returning to med ed, it's certainly not that tuition is going to clinician educator salaries. But damn if the senior admins don't have a lot of teak and walnut on their office walls.

Yeah, I'm a little cynical. I was an intern awhile after you. I made $22K. It was a county program, so on the low end of the salary scale. My friends in more typical academic centers made ~$25K.

Back then federal loans were deferable during training. I finished residency with the same principal I had when I started. Not so these days. I don't know how some new docs are going to get out from under their educational debt.

Skeptical Scalpel said...

Yes, the money isn't going toward teaching. A lot of "clinical" professors, associate professors et al receive no payment for their services. And most university med school faculty have to earn their salaries by doing clinical work.

GetOutOfMyLawn said...

I wonder how is it in Slovenia (cfr where to invade next, michael moore)

artiger said...

My costs, salary, and loan deferment were similar to Anon at 8:29am today. It took me about 10 years to pay off my loans, which neared $100K. (Scalpel, not trying to make anyone feel old, but I was born in 1967.)

With tuition costs and less friendly loan terms these days, I would avoid medicine entirely. If I did pursue it, the only way I'd go would be the military route. I'd consider National Health Service Corps loan payback, but that wouldn't have been attractive to me when I was a single, early 30-something.

Mike McInnis, M.D. said...

When I was an intern (2000-2001) I made less than my wife... who was an inner city public school teacher.

George Gasman said...

I'll go ahead and name my school: Northwestern University Medical School. Tuition was $1875 a year in 1972. Inflation adjusted, that's about $14,000 in today's dollars. It was the same at the undergraduate school. This is an amount that almost anyone could afford, back then, as well as now. I graduated with zero debt (thanks, Mom & Dad!).

My intern's salary was $12,600, with a $600 increase for every year after that, plus the "raises" we got. By the time I finished, in 1980, it was about $14,500.

Anonymous said...

I'm a radiology resident, currently in repayment under income driven repayment (PAYE). My loans currently total just shy of $390k since interest continues to accrue on unsubsidized loans while making my small but affordable payments. Part of that is also because I went to an out of state school, which coupled with the scholarship offered to me in my home state amounted to a difference of approximately $100k + interest. I love the program and city I'm in, which is where I went to medical school, so overall I'm still happy with my choice (meeting my wife here helps too, heh). But even so, my debt burden is unreal. Fortunately, if the job market doesn't tank in the next 3 years before I get a job, I should be able to repay that without too much hardship. But I often wonder how I'd feel about it if I had ended up loving family medicine instead of radiology, between which there is quite an income disparity. I'll make more money than I ever envisioned for myself while growing up, but all of that debt still gives me a very uneasy feeling.

Skeptical Scalpel said...

Thanks for the comments everyone. I enjoyed reading your stories.

George, my inflation calculator turns your $1875 into $10,843 in 2016 dollars. I had the same experience. My dad just wrote a check for the $1200. My senior year was $1900. It hade gradually risen every year. Still covered by a check.

Anon radiology resident, I am having trouble with the concept of a $390,000 debt. Good luck to you.

Arrived, I know I'm old but you'll be turning 50 next year. I believe the definition of elderly is 55. It won't be long.

Anonymous said...

Thank you Artiger as we share a birthdate. :)

Btw, Artiger, I responded to you on another forum. Great to see some good minds getting out and about.

As for medical school, when they talk about only the rich can afford it, its because you have to have doctor or high business parents to be able to pay part of your way thru.

Crazy. You know doggone well its paying for the business salaries, not the MD teacher salaries. Disgusting. The only thing worse is MOC.

GetOutOfMyLawn said...

Wow, each time the tuitition costs arises, I'm shocked at the giant amounts needed in the US. My son has begun the fifth year of medical school in Italy and I already know that the total amount I will have spent when he ends the six years trail is about 18-20k USD. I also know that during specialization and during his career he will be paid less than in the US, but the startup difference is still quite relevant.

Skeptical Scalpel said...

Autocorrect mangled my previous comment to Arrived (Artiger).

It is true that mostly the children of affluent parents are going to med school.

Italy sounds like a pretty good deal--plus the food is great there.

RobertL39 said...

Well, I'm sure this is much too simplistic an answer, but perhaps it's natural market forces: the tuition keeps going up because there are more and more applicants every year. Just by applying these applicants signal that they are willing to pay whatever it costs to attend medical school. Think of the logic: "Hey, Herb. We keep raising tuition and we get more applicants every year! Let's just keep cranking it up!" If the pool of applicants were to shrink drastically and many/most of them did not have the extensive financial resources that they have, perhaps the tuition would drop some? Don't hold your breath. As the Stanford alumni magazine pointed out on its cover recently, it's a GREAT time to be rich in America.

Anonymous said...

Alternative medicine is cheaper and (you might not like to hear)in some ways more effective for certain conditions...

Skeptical Scalpel said...

Robert, you may be on to something there. No doubt demand is as high as it has ever been.

Anonymous, Other than hypochondria, and maybe not even that, I can't think of a single thing that alternative medicine might be more effective for. You need to read a few posts from this blogger

Unknown said...

Recent residency grad, started residency at 240k ended at 340k with four years of interest tacked on while completely powerless to stop it. Now in IBR hoping for public service loan forgiveness. I'm a psychiatrist, without the PSLF program, my own kids are screwed

Frank Warsh said...

Despite the rising tuition costs, it's estimated to cost the government about $500k to train a doctor from beginning to end. Even before factoring in resident stipends, there's a massive infrastructure cost to medical schools: faculty that don't generate their own income (anatomists and epidemiologists, for example), materials, libraries, and administration. And yes, there's almost certainly a component of tuition that subsidizes other departments. But either the future MD or the taxpayer has to foot the bill. Given that almost all doctors end up in the top 1 or 2% of earners, there's a case to be made for high med school tuition.

The problem isn't necessarily the high tuition being fair or unfair itself, but rather whether it creates a barrier for candidates from low income backgrounds, especially in the absence of a good bursary/loan system. The neediest patients are disproportionately poor, and nobody is as likely to understand a life of poverty as someone who's lived it.

Now, does limiting tuition costs fix that problem? Very likely not. Quebec has low tuition costs for med school, but the medical system there is hardly more functional than anywhere else in Canada.

What's the answer? Who knows? But it's something policymakers should revisit every so often. Sadly, they're preoccupied at the moment with turning primary care into a shambles.

Skeptical Scalpel said...

Unknown, thanks for commenting. Good luck with your loans.

Frank, good points. I don't think there is much doubt that those with low income backgrounds are underrepresented in med schools. Does the debt need to increase by $100,000 in 4 years as in the case of the unknown psychiatrist whose comment is right above yours. The schools don't get that interest. The company that loaned the money does. It's a good racket.

MSUlady said...

This problem is not limited to human medicine, either. I pay as much for my veterinary school loans every month as we do on our mortgage. And veterinarians, while still above average for median income, earn less than their human medical colleagues. I, for instance, work full time at a fairly busy small animal general medicine practice. I see emergencies, perform surgery, and take after hours and weekend on-call. I made less than 6 figures last year. And I make more than *many* of my classmates. The only reason my loan payments are not a hardship is that my husband is also above median income for our area.

Skeptical Scalpel said...

MSUlady, Thanks for commenting. I had no idea that this was also a problem for vets.

Farrel Buchinsky said...

Frank Warsh's comments about infrastructure costs do not explain the rise in tuition since it is unlikely that the total per student cost of anatomists and epidemiologists and materials and libraries have increased at the rate of tuition.

I am hard pressed to conceive of an explanation more likely than the following.

There is a vast educational-financial-industrial complex that has learned what all business has learned. You do not set prices based on markup. You set prices based on what the market can bear. Given the projected lifetime earnings of doctors (even just looking at the 5th percentile) and the nachas / status attributed to being a doctor in America, it is easy to see that wealthy parents and financial institutions are willing to fund the endeavor and would do so at even higher tuition prices. For those students who finance the rapacious tuition charges with bank loans, it is quite simple what to see what is going on. The schools and the finance industry work together to enable one another in helping themselves to their customers' future income. Noble motivations and explanations will be offered but do they eplain the majority of the phenomenon described in the post?

Frank Warsh said...

Farrel Buchinsky, please forgive me if I came across as an apologist for high tuition costs. I'm not at all, just more articulating the devil's advocate side of things. I'd even go further and argue that the ludicrous expectations of medical school applicants (fostered talents, global volunteer work) virtually guarantee that medicine remains a profession of the wealthy and by the wealthy before a single dime of tuition is paid.

I also speak only from the Canadian experience. The blog has a Canadian URL and the post came to me through Canadian Twitter feeds. Like a good Canadian, I'll apologize for any error or misconstrued comments;)

Skeptical Scalpel said...

Farrel, I think you are probably correct. Tuition is based on whatever the market will bear and shows no signs of plateauing.

Frank, thank you for being a good Canadian citizen. My blog is based in the northeastern US. Readers in the UK get the blog through a UK URL. I wasn't aware that Canadians see a different URL too.

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