Educational Debt Has a Greater Impact Than Meets the Eye

By | May 8, 2023

Educational debt is an intriguing concept; borrowing money to pay for education now that will benefit one later when their degree is earned. In essence, future earnings will compensate for the necessary debt required to achieve that degree and, consequently, those earnings. Unfortunately, the debt load of those graduating from medical schools (well into the six-digit range) is astronomically high, and the benefits fail to outweigh the cost. Moreover, the debt is so high that students must make life decisions based on paying their monthly payments versus living out their desired career.

Even more, this level of debt is disproportionally higher among minority groups entering healthcare, thus acting as a barrier to care and equity in the workforce. Additionally, the debt level influences a person’s chosen field of practice since there is a vast discrepancy in earnings among the specialties. They may feel pressured to enter more lucrative fields that our fee-for-service billing system rewards, instead of primary care. This has resulted in a healthcare system with significantly more specialists and a need for significantly more primary care physicians. This same issue occurs concerning the practice location since the payor mix market dynamics drive decisions, with rural areas suffering the greatest.

These same debt loads also drive the cost of care. For a person with extensive debt, in order to live reasonably, they must demand higher wages. And these extra wages are typically spent on decreasing their debt load. The banking system is part of our economic ecosystem that benefits from these higher costs, that are passed on to all through higher costs of care.

Understanding these macroeconomic dynamics can help understanding one of the variables driving healthcare costs, the distribution issue we see in services, the shortages within primary care physicians, and the lack of diversity in the workforce. We must step back and first ask, is what we are paying for worth it? If not, how do we design educational models that are less expensive but deliver the same results? With technology and different learning models (zoom being a prime example), is there a way to improve the educational experience?  Is it better for the students if they are all taught by the same expert educators in each chosen field? Is it essential and financially worthwhile for undergraduate and medical school education to remain at its current length? Can we shift to more of a trade school model in healthcare education? As a society, would it be better to consider educational-financial support differently than we do today?

Regardless of the solutions, we must first recognize the problem and its impact on care and care delivery. Only then will we begin to understand the sheer weight of the issues and modernize our thinking for the betterment of all.