Are Student Loans Driving Up the Cost of Healthcare?

By | September 18, 2018
Competition and regulation

Undoubtedly, interest was piqued by the recent announcement that all medical students at New York University will receive 100% tuition assistance. Although currently, numerous colleges are working to prevent students from acquiring a debt load, that idea, until recently, has yet to come to fruition for medical school. Moreover, there have been conversations concerning the value of the education. Unquestionably, ample opportunity exists to debate the merits of secondary education at its present cost; however, it behooves us to better understand the impact of higher education tuition and how it affects the cost of healthcare.

For instance, years ago, while participating in physician recruitment, I encountered an incredibly talented primary care physician. Unfortunately, we were unable to come to an agreement concerning income; he required a substantial salary to cover his student loans. I realized his debt load prevented his employment. Quickly calculating, on the back of the napkin, I deduced that each primary care visit reimbursement included $5.23 for educational debt. Consequently, for him, these dollars were not part of his true income, just an offset to his debt.

Additionally, recent studies have commented that the payment to providers is one of the drivers of the difference in our healthcare costs compared to other countries. What this discussion does not include is the education factor mentioned above. Higher education in other countries doesn’t cost as much, here we are adapting to the financial landscape. Higher debt translates into higher costs of delivering care.

Many argue that the systemic cause is the methodology of our educational system and the value of the education received. Both views have merit. Are four years of college and medical school necessary? According to many educators, not necessarily. Addressing this situation are a growing number of 7-year programs. Currently, our present educational model is costly with high overhead and outdated teaching methodologies. Furthermore, the newer generations learn much differently and the evolution of technology allows educational innovations that were not previously available. Also, decision support during healthcare delivery also supplements learning experiences and enhances the point of care choices in diagnosis and treatment.

Yes, there are arguments against 100% funding of medical students as merely another example of financial assistance to those that can afford it to the detriment of those who are less able. However, it benefits us to consider the betterment of all those we serve.

The cost of healthcare is a multi-factorial problem that is increasingly complex and will require innovative solutions in multiple dimensions. The cost of educating those we ask to serve is an area that is ripe for disruption as the benefits are immense. Kudos to the education sector in beginning to address these factors. Those who are closest to the issue are the best to propose and implement solutions. Let us as a society accept their recommendations and support these initiatives, as all will benefit from the results. Education and experiential learning are fundamental to our healthcare environment and essential to the evolution of healthcare to continue to meet the needs of all. Prioritizing the payment and cost models is of the utmost importance.