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Medical Students: The Anti-Millionaires

A few months ago, CBS Moneywatch published an article entitled “$1 million mistake: Becoming a doctor.” Aside from the possibility that devoting one’s life to helping others might be considered a mistake, I was struck by the “$1 million” figure. Was it actually that much? I mean, $1 million is a lot of money. When I was younger, millionaires seemed a rarefied breed. They drove expensive cars and had houses with names like “Le Troquet” or “Brandywine Vale.” The figure was supposedly calculated using the following factors:

  • The cost of school, inclusive of tuition, fees and insurance
  • The interest on the loans incurred to pay for the above items
  • The income lost by not working full-time for 10 years, assuming an average income of $50,000 per year

Before coming to medical school, I worked in the pharmaceutical industry. I even turned down a hefty promotion to start my education as soon as possible, rather than defer for a year or two.  Thus, my back-of-the-envelope calculations made it fairly obvious that, including benefits, bonuses, and potential promotions, my medical decision was not a $1 million mistake, but was more like a $1.3 million dollar disaster.  Of course, people tell me that I’ll be profitable and that I’m a good credit risk, but what I really am is one of a rarefied breed that drive economy cars and have houses with names like “Apt. #203.” What I really am is an anti-millionaire.

Tuition comprises the vast majority of what we pay out as medical students. According to the Association of American Medical Colleges (AAMC), the average 2013-14 tuition for a non-resident student is $50,566, with additional school-related fees running another couple thousand dollars. Essentially, without outside help, medical students are paying out roughly $53,000 every year, with a principle burden of over $200,000 after graduation.

Luckily, most students have some sort of assistance and owe an average pittance of $169,901, while a significant minority are pinned with debts of over $250,000. Obviously, it depends on which school you attend and residency status (i.e. attending your respective state school will be far less than attending an out-of-state private school), but I think we can all agree that it is expensive. The real question, however, is whether it really costs that much to mint a new doctor.  To put it another way, are we getting a dollar of education for every dollar we pay?  Unfortunately, the answer is murky at best.

In 1997, a study at Virginia Commonwealth University concluded that the average cost to educate a single medical student for a year was $69,992, including instructional and educational resource costs. Accounting for inflation, that number is equivalent to $91,473 in 2013 dollars. As far as I know, there are no medical schools charging over $90,000 per year, and if there are, those students have my deepest sympathy. Other turn-of-millennium numbers from the American Medical Student Association (AMSA) suggest the figure is somewhere between $80,000 and $105,000 per year.  In either case, it seems as though we are actually underpaying for our education, with other institutional revenue streams making up the difference.  There are, however, a few things to consider with regards to tuition, as noted by William Toffler:

  • Are these numbers an accurate reflection of medical education, or are we being billed at a higher price for what is considered a “better brand” of education?
  • How can we know that this full amount is being devoted to education, particularly when administrative decisions about tuition are kept somewhat secret?

One has only to glance at any continuing education catalog to see that graduate credit is billed at a higher rate than undergraduate credit, even within the same class. With a quick review of its courses, the extension arm of one well-known Cantabrigian university shows a reliable mark-up of 66%. Higher education obviously carries a premium price, but when it comes to medical school the final mark-up is unclear. We all learned thermodynamics, biochemistry, and physiology in college—we don’t know how much more we are paying to re-learn the same material in medical school. Yes, this is an unfair example considering that other subjects, such as physical diagnosis, are specific to medical education and necessary for clinical practice, but for the sake of comparison, it is worth the exercise.

With regards to Toffler’s second point, a 2000 report from the AMA Council on Medical Education indicated that only 50% of medical schools fully retain tuition monies, while others feed it into a central university fund for various initiatives or capital projects, overhead costs, or various fees. Furthermore, at 66% of institutions, tuition is set by the university and its board of trustees or some state authority—entities only loosely involved in the medical curricula. At best, it seems there could be only a vague connection between tuition and the actual cost of medical education.

An important point is that only 3% to 8% of total medical school revenue is derived from student tuition. The other, more significant revenue streams include practice plans (revenue generated by the medical practice of faculty and students), various hospital or school programs, and state and federal subsidies. Thus, tuition is a relative drop in the bucket compared to the overall “business.” Taking a naïve look back at my previous life in pharmaceuticals, budget fluctuations under 10% were relatively inconsequential, not even requiring senior management approval. Why then, is there such an emphasis on maintaining tuition as a comparatively minor, albeit ballooning, revenue stream? Why can’t the cost burden be foisted onto activities that are already making the big bucks? Why can’t we take a page from the indentured servant model, working enough years under our alma mater to pay our passage across the medical education ocean? Why do we, the young and impecunious, pay so much?  The answer, of course, is that we are willing—nay, happy—to pay for it.

Even today, as we stare down the barrel of the Affordable Care Act, being a doctor is a very desirable job. We may not be famous, but we will be well-respected. We may not be rich, but we will certainly live comfortably. We may work a lot, but we will never be out of work.  Despite the fact that rises in medical school tuition have far outstripped inflation over the past 30 years, the demand for that education continues to outstrip the supply. In 2012, 45,266 hopeful student doctors applied to medical school. Of those, only 19,517 matriculated. And these numbers do not even including the 16,454 individuals who vied for 5,577 osteopathic slots during the 2013 cycle. Even with the AAMC’s recommendation to expand medical school classes by 30%, we will never see a school that is unable to fill every single one of its slots. To us, the future doctors, the young and impecunious, the anti-millionaires, tuition is a mere afterthought. All that matters is the MD.

Ode to the Anti-Millionaires

We are medical students.
We are young, proud, and righteous.
We have made the hard choice (medicine), but we have cleared the high hurdle (getting into school).
We know healthcare is a difficult, imperfect art, but we are devoted.
We arm ourselves with the weapons of knowledge and compassion, prepared to defend against the onslaught of trauma, disease, and time.
We are here to the bitter end, for our patients and ourselves.
And above all, we know the cost of our choice.

And if we’re lucky, it will stay under 6% interest through graduation.

Daniel Coleman Daniel Coleman (5 Posts)

Medical Student Editor

Georgetown University School of Medicine

Daniel graduated from Tufts University in 2004. His subsequent pursuits included everything from cell cycle research to manufacturing shampoo. Medically, his interests lie in emergency and wilderness medicine, infectious disease, and health care sustainability. Daniel is medical student at the Georgetown University School of Medicine, Class of 2017.