The Costs of Education Study

The reports on HMOs, end-stage renal disease, and abortion required a large expenditure of staff time with comparatively little return. The reports were on disparate topics and failed to bring a sense of coherence to the IOM's efforts. If the IOM were to survive, it required a large sustaining project that brought in enough money to cover not only the costs of the project itself but some of the Institute's other operational costs as well. The study of the costs of educating health professionals served as just such a project for much of 1972 and 1973.

In November 1971, John Hogness received a letter from Merlin K. DuVal, Assistant Secretary for Health and Scientific Affairs at the Department of Health, Education, and Welfare, mentioning the fact that Congress was about to pass the Comprehensive Health Manpower Training Act of 1971. DuVal had managed to insert a provision in the act that mandated a study of the "national average annual cost of educating students in each of the health professions." DuVal made sure that the Institute of Medicine would be asked to perform the study.61

The study concerned a subject in which IOM members took a vital interest. At stake was the way in which the federal government would subsidize medical schools as well as schools of dentistry, osteopathy, nursing, veterinary medicine, pharmacy, podiatry, and optometry. In the past, much of the support was indirect, through mechanisms such as research grants, which by 1968 amounted to nearly 42 percent of medical school revenues; construction grants for teaching faculties; and special grants for schools in financial distress. With federal research funds declining and medical school enrollment expanding, Congress sought a better system for aiding schools. One idea was to make grants to the schools based on the number of students. Not ready to make a final decision on how to implement such a system, Congress fell back on the old device of requesting new data. It wanted to know how much it cost to educate a medical student and how much variation existed from school to school. It also asked for a way in which costs per student could be calculated and for any recommendations that the IOM might have on the way the federal government could use educational cost data to determine the appropriate amount of capitation grants to health professional schools.62

The assignment required the IOM to come up with hard data in a manner similar to the studies on health contrasts that had been conducted by David Kessner. This necessitated hiring a large staff

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