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Appendix C-1 TOM/JOSIAH MACY, JR. FOUNDATION WORKSHOP ON CHANGING COSTS OF I)ICAL EDUCATION AND THE IMPACT ON TI1E MIX OF STUDENTS November IS-19, 1982 Summary of Issues Identified and Studies Suggested C08t of medical education The educational costs of the medical school years have been estimated, by several methods, as about $2S,000 per year per student. It also often is said that post-}fI) education pays for itself, through fees for care provided by residents. 1 ) What are the true medical education costs ? a ~ Have previous studies provited an appropriate methodology f or determining costs? Is a believable standard motel available ? Should one be developed; if so ~ how? b) Are more studies of pre- and post-blD educational costs needed (either with old or with new o~ethodologie~? c) Do we really want to know the true costs? 2) Do medical schools need to be as expensive as they are? a) Each year there are about 17, 500 U. S. medical school graduates, about 4500 foreign medical school graduates who are U.S. citizens (about 2000 return to the U.S.), and about 2000 graduates of osteopathic schools in the U. S. What are the coerce of foreign medical education and of osteopathic educations Would comparisons of ache costs (and outcomes ~ with traditional U.S. medical education costs help identify "unnecessary. costs? b) Is research in medical achool.s essential for education? How does it contribute to the costs of medical education (physical resources, number of faculty, etc. )? c ~ Can the expense of f acuity salaries be reduced ? How is medical education paid for? 3) What are the implications of an increasing share of the fiscal burden shif tiny f ram the federal level to states to consumers ~ ~ tutents ~ ? a) What "old" mechanisms for financing are essential? (Especially impact of loss of NlISC program) b) What new mechanisms could (should) be developed? 302

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c ) Is there a shif t away from private schools toward public schools? If so, what, if any, are the implications for future career choices and quality of care? 4) What can students afford to pay? A June 1981 Urban Institute study for HHS suggests that an average student can afford an annual "investment" of $35,000 for tuition and fees. (Those expecting to be psychiatrists, a relatively "low-paying specialty, would only be able to invest $~8,000 each year if they wished a positive return on their "investment . " ~ al Have the components of the economic picture (interest rates, tuition fees, physician income, inflation) changes sufficiently to warrant an upda te o f recent calculat ions of the "return-on-investment" ? b) What changes, if any, are needed in the return-on-investment (net present value ~ methodology? c) e) Are there differences in expected income based on race or family socioeconomic status? If so, how toes this affect the return-on- investment calculation? How much di~aggregation is needed? _, Income data usually are lumped for the category "under 35." Is disaggregation needed to highlight the transition typical for that age cluster--from medical graduate to resident to independent practitioner (or academic)? What are the determinants of willingness to assume a particular burden of debt? Are there tif ferences in perceptions or cultural norms baset on race, ethnicity, or socioeconomic status? How quantitative is the student's (and family's) understanding of expected return-on-investment? f ~ Can financing information be made available to senior premedical students in a more useful form? How available is effective f inancial counseling for these students? Career choices 5. When do individuals make decisions to pursue careers in medicine? Where is attrielon occurring in the career path (from high school on) and ts this at all related to f inancial concerns (ability to pay the coste)? Is the decision path the same for minorities and non~minorl ties? '. For decisions about a medical career that are mate in the college years, what are the motivational factors? In particular, what influence have cost and financlag considerations? Are these a barrier, ant if so do they act differentially on different groups of students? a) The decision to pursue a medical career (i.e., to pursue a course of study to meet medical school admissions requirements? 303

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b) Decisions about whether to apply to medical school, and which ones? - c) Decisions on where to matriculate? 7. How to post-MD career choices correlate with accumulated indebtedness? a) Are we reaching a threshold such that money concerns will start to influence choice of specialty? (To date, tats indicate there is no correlation.) b) What is the impact on decisions about practice vs. clinical research (academic) careers? c) Will there be differential impact on minority and low socioeconomic s tatus s tudent s ? Equity 8. Is equity in health care at all dependent on equity of access to medical education? a ~ Should a diverse mix of medical students be a goal of social policy? 1~ this baset on social Justice and/or on greater ability (or willingness) to provide care to population subgroups? b) What are the projections for medical manpower distribution (and needs) if diversity is or is not maintained at least at the present level ? c ~ What i.. the current status of minority medical schools? Do their needs warrant a special policy for them (or for their tudents ~ ? ~=e~ There was a perception by some at the workshop that we are on the threshold of a new era in financing medical education tuitions will go up, loans ant scholarships will be liens available, and the loans will cost more . Some f orecas t that, shortly, the pool of money available for loans, at any cost, wits not be suf ficient to meet need. This is expected to disproportionately cause problems for low income, black, and other minority group students. Accordingly, a task force to identify the needs of targeted groups and opportunities to intervene rapidly was suggested. The task force would simultaneously monitor the situation (need for loans, availability of loans, attrition due to lack of access to loans) and try to do something about it. 304

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Appendix C-2 COMMENTS ON THE SUGARY Particlpants in the workshop were sent a -sugary of the issues and concerns identified (Appendix C-~) ant were asked to select the issues they thought were important and deserved study, indicate the issues amenable to research, suggest an appropclate research approach, and f ideally suggest additional issues that they thought should be investigated. Lost respondents agreed that the issues identif fed in the summit ry are important and, in general, deserve further investigation. The issue that received most attention was the impact of changing levels of tuition and student support (loans ant scholarships) on the characteristics of students entering medical education, and on decisions made af ter the M.I). degree is earned. There was particular interest in the ef feet of the level of debt incurred by students, especially in the light of changing income expectations. Research suggestions that relate to this issue include both investigation of past relationships among debt levels ~ socioeconomic characteristics, and career decisions, ant monitoring of current and future changes in these relationships. The purpose of such research would be to document any disruptions that occur so that appropriate strategies to counter undesired effects can be developed. Respondents that commented on research methodologies suitable for this task suggested a number of variables that should be. used, including tuition levels, debt levels, income levels, race, sex, f inancing mechanisms (interest rates, payback periods, forgi~renese, etc.), residency choices, and practice locations. A few respondents suggested that the outcomes of such research should be analyzed in terms of society's goals ant the ways in which physicians' career choices are linked to the more general question of how medical manpower policy is developed and students are oriented to make their decisions. A concern with the composition of the student, and subsequently physician' pool also was expressed. One respondent stated that future physicians should be chosen on the basis of academic and personal promise ~ not ability to pay, and, similarly, career decision should be based on intellectual capacities and perceptions of need for their services' not debt. lithe same respondent, however. Dotes that it is reasonable for students to shoulder "reallatic. Petrels of debt a topic -f elt to be in need of investigation. Many respondents expresses interest in investigating the relationship between economically disadvantaged or minority students and practice in undereervet areas or service to subsets of the population. Interest in minority group participation in medical education was expressed in teams of concern about access to care for specif ic popular ion groups. Several individuals commented on the equity issue: this was thought to be a philosophical or sociological issue ant not an appropriate research topic, although one respondent 305

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suggested that emergency measures to protect the access to medical education of disadvantaged and middle class people are needed, and another suggested that research Should be undertaken to develop loan repayment or forgiveness incentives for practice in underserved areas, academic medicine, and research. Substantial disagreement was expressed on the need for further research into the cos t of medical education. Some people recommended updating existing cost studies, using existing methodologies. One said that there is a need to know the true cost of medical education to provide a basis for the public/private division of cost, but the methodology needed to accomplish this would be too complex. Another expressed doubt that a major new cost finding study would be useful in today's political climate, and the marketplace might as well determine tuition levels. One respondent stated that new cost studies should be designed to develop information useful as management tools. There was, however, complete agreement thee comparing the cost of foreign and osteopathic medical education with the cost of U.S. allopathic medical education was not an appropriate way of revealing "unnecessary" costs; rather, it was suggested that the components of cost should be investigated to determine whether any are excessively expensive, and research should concentrate on f inking reasonable costs f or acceptable quality of education. While many respondents agreed that low income, black, ant other minority groups should be the focus of research, and were of special concern, the suggestion of a task force met with a mixed response. One respondent said that since medical education today is facing points of diminishing return and the educational environment and public attitudes are changing, he would encourage the formation of a task force. On the ocher hant, another respondent stated that such a task force already eclats, and a third believes that little would be accomplished by such a task force. Although most respondents commented on each of the research topics mentioned in the workshop Emery, few suggested additional research areas. One person recommended reformulatlag research questions in the context of national health goals. There were a number of comments that the workshop had Peale whiny with pre-M.D. education and that postgraduate education also warrants attention. Another research suggestion, one that does not fall within any of the categories in the workshop summary, stems from the notion that medical centers wni1 not be able to rely on the fee for service system for support in the future to the extant they have in the past. An exe" nation of the feasibility of divorcing clinical faculty from basic science faculty and creating coalitions of hospitals and practice plans was suggested. 306

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Appendix C-3 PARTICIPANTS* NANCY AHERN, Staff Officer, Instteute of Medicine, National Academy of Sciences, Washington, D.C. IVAN L. BENNETT, JR., M.D., Executive Vice President for Health Affairs, New York Unlversity Medical Center, New York, New York JANET BICKEL, Staf f Associate, Division of Student Programs, Association of American Medical Colleges, Washington, D.C. MAXINE BLEICH, Program Officer, The Josiah Macy, Jr. Foundation, New York, New York JOHN T. BRUER, Ph.D., Program Officer, The Josiah Macy, Jr. Foundation, New York, New York JOHN CRAIG, Vice President and Treasurer, The Commonwealth Fund, New York, New York DANIEL D . FEDERt1AN, M. D., Dean f or Students and Alumni , Harvard Medical School, Boston, Massachusetts BARBARA FILNER, Ph.D., Associate Director, Division of Health Sciences Policy, Institute of Medicine, National Academy of Sciences, Washington, O.C. MARY FRUEN, Ph.D., Health Policy Consultant, Washington, D.C. ROBERT GRAHAM, M.D., Admintatrator, Health Resources and Services Administration, U.S. Department of Health and Human Services, Rockville, Maryland KATHLEEN GRIFFIN, Legislative Asstatant, U.S. House of Representatives, Washington, D. C. JACK RADLEY, Ph.D., Health Policy Program, The Urban Inatitute' Washington, D.C. THOMAS HATCH, Director, Bureau of Health Professions, Health Resources and Services Administration, U.S. Department of Health and H''m~D Services, Rock~ille ~ Maryland JAMES G. HIRSCH, M.D., President, The Josiah Macy, Jr. Foundation, New York, New York *Ti ties and af f iliations are those at the time of the workshop. 307

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ROBERT KEIMOWITZ, M. D., Associate Can for Student Affairs and Admissions, George Washington Unl~rersity School of Medicine and Health Sciences, Washington, D.C. JOSEPH M. KIELY, M.D., Professor of Medicine, Mayo Medical School, Rochester, Minnesota WALTER LEAVELL, M. D., Dean, School of Medicine , Meharry Medical College, Nashville ~ Tennessee LAWRENCE LENIN, President, Lewin and Associates, Washington, D.C. JOAN M. MAY, Assistant Dean (Financial Aid), Cornell University Medical Collge, New York, New York rOHN C. MORRIS, Analyst, Public Finance Division, Smith Barney Harris IJpham & Co., Inc., New York, New York BERlIARD W. NELSON, M.D., Executive itice President, The Henry J. Kaiser Family Fund, Menlo Park, California ELENA O. NIGHTINGALE, M. D., Ph. D., Senior Scholar-in-Residence, Institute of Medicine, National Academy of Sciences, Washington, D.C. DELORES PARRON, Ph. D., Associate Director, Division of Mental Health and Behavioral Medicine, Institute of Medicine, National Academy of Sciences, Washington, D. C. EDWARD S . PETERSEN, M. D., Director , Department of Undergraduate Medical Education, American Medical Association, Chicago, Illinois FREDERICK C. ROBBINS, M.D., Prealdent, Institute of Medicine, National Academy of Sciences, Washington, D.C. WALTER A. ROSENBLITH, Ing. Bad., Institute Professor, Massachusetts Institute of Technology, Cambridge, Massachusetts MARY KAY SCHLEITER, Ph. D., Assistant Professor, Department of Medicine, Uni~reraity of Chicago, Chicago, Illinole ALVIN R. PARLOR, M.D., Professor of Medicine, University of Chicago, Chicago, Illinois W. DONALD WESTON, M.~., Dean, Michigan State University College of Human Medicine, East Lansing, Michigan ALBERT P. WILLIAMS, Ph. D., Director, Health Sciences Program, RAND Corporation, Santa Monica, California SUNNY YODER, Staff Associate, Institute of Medicine, National Academy of Sciences, Washington, D. C. 308