Will debt-free medical education be an option for future physicians in training? One medical education expert shared a vision for a bold funding model that would eliminate student debt and improve how coveted medical education dollars are spent. Learn about the new funding model and why debt-free education may be a reality for future physicians in training.

What a debt-free model could look like

“Out of the $2.81 trillion spent [on health care] in 2012, the total spend on all of medical education—[including] undergraduate and graduate—is approximately $20 billion in the United States, or 0.68 percent,” Jeffrey P. Gold, MD, chancellor of the University of Nebraska Medical Center, told a group of educators at the AMA’s ChangeMedEd  conference in October. “So we want to focus on how we can better spend that 0.68 percent,” Dr. Gold said.

To improve how these limited medical education dollars are spent, Dr. Gold and two colleagues at the University of Nebraska Medical Center have proposed a new funding model that will:

  • Build a trust fund for undergraduate medical tuition. This fund would “cover all undergraduate medical education tuition [and eliminate] all student debt in return for professional health care services after completing GME in a designated area in their chosen specialty,” Dr. Gold said. “So this is a work-for-return-of-service type of model.”
  • Replace all indirect and direct GME dollars with a new “funds-flow” mechanism using fees paid for health care expenditures by all payers. “We propose the establishment of a novel all-payer system whereby government, commercial and private entities, as well as self-pay individuals, invest in the education of all physicians in exchange for the highest quality of health care,” Dr. Gold and colleagues wrote in an article published in Academic Medicine. The proposed model would alleviate GME’s heavy dependence on Medicare and Medicaid funding. Dr. Gold also said this all-payer system would help advance other areas of medical education, including increased scholarship funding for underrepresented students in medicine. 
  • Enhance accountability among educators and institutions receiving medical education funds. Medical schools and educators would have to “link their funding levels [to] their ability to achieve predetermined, specialty-specific institutional program-, faculty- and learner-outcome benchmarks,” Dr. Gold said. This will ensure that medical education dollars are being spent on programs that produce measured results and enhance the learning of physicians in training.

Potential outcomes of this funding model

So what would happen if undergraduate medical school debt were eliminated and replaced using an all-payer system? Dr. Gold said medical students and schools could expect several favorable outcomes, including:

  • The elimination of medical school debt and the insurmountable pressure it puts on physicians. 73 percent of physicians under the age of 40 still are paying off their medical school loans, according to AMA Insurance’s 2014 National Work/Life Profiles report. Nearly one-half of these young physicians carry a debt of $150,000-$200,000. Considering the high long-term cost of medical training, “we could argue for a long time about how important this [new funding model] is,” Dr. Gold said. “Given the average graduation debt right now, [this is] a big deal.” 
  • An increase in the number of physicians who meet the needs of underserved patients and communities. Under this new funding model, institutions could infuse thousands of “fully trained, board-eligible physicians into the underserved community workforce for a period between one and four years, depending on how much debt they want to work down,” Dr. Gold said. This would improve access to quality care for patients in vulnerable communities while freeing students from the crushing burden of paying back loans during residency. 
  • Direct compensation of all teaching institutions and professional educators. Throughout his career in medical education, Dr. Gold said he’s observed how researchers and clinicians in medical education are often paid differently, yet they wish to be paid the same way for their meaningful work with students. Under this new payment model, clinical educators and researchers would receive compensation directly from the established medical education fund, so all educators would be paid the same way—no matter their title or position. Dr. Gold said this is especially helpful for clinical educators who can no longer rely on an “apprenticeship model” as the main method for teaching students in clinical settings. Educators now are creating innovative curricula, teach and measures students’ progress. “That all takes time and … with all the workload on our faculty, there has to be a way to compensate [them], and it should be built into our system,” he said.  
  • More funds to allocate for residency positions. In fact, this new funding model “will generate more funds to do the equivalent of adding 3,000 GME positions to the United States,” Dr. Gold said.
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