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Medical Schools Expand -- and Contract

March 4, 2010

In the span of a week in September 2008, the "rubber band" that held together the University of Utah School of Medicine broke.

First, the federal government cut $10 million in Medicaid funding to the university’s hospital. Then, days later, the state Legislature eliminated $2.5 million in support. In all, the medical school lost 40 percent of its education budget nearly instantly, with no revenue-creating solution in sight.

“We were a rubber band stretched to the extreme,” says David Bjorkman, the school’s dean. “We were already spending every dollar we had, maximally cross-subsidizing with clinical revenue from our health system.” After months of lobbying and left with no other choice, the school shrunk the size of its fall 2009 entering class to 82 from 102. While the rest of the university raised tuition by 10 percent, medical school tuition went up 15 percent.

Though Utah’s medical school has seen more dramatic cuts than most, the economic realities of a prolonged recession are forcing medical schools across the United States to reduce the number of seats available for new students or to curtail expansion efforts initiated during better economic times, even as demand far outstrips supply in many experts’ projections on the size of the future physician work force.

State higher education budget cuts mean that Indiana University School of Medicine’s entering class this fall will be 13 percent smaller than last fall’s. One scenario for higher education cuts in Nevada would include shutting down the University of Nevada School of Medicine, the state’s only medical school. Development of a new medical school at the University of California at Merced has stalled.

And more cuts could be on the way.

Edward S. Salsberg, director of the Association of American Medical Colleges’ Center for Workforce Studies, says he has seen some evidence of medical schools taking in fewer first-year students or slowing their planned growth rates. “It’s up to the individual schools to make decisions that work for them,” he says. Public medical schools “have to go to their state legislatures to get support and we know state budgets aren’t in good condition in most states.”

For the medical establishment, tight budgets and enrollment cuts couldn’t have come at a worse time. The Council on Graduate Medical Education estimated in 2005 that the United States would face a shortage of 85,000 to 96,000 physicians by 2020 unless medical schools were able to increase the number of new M.D.’s they graduate each year by several thousand. Other groups, too, project a physician shortage or at least the need to draw physicians to underserved regions and toward practicing high-demand specialties such as internal medicine and geriatrics.

In June 2006, the AAMC responded by undertaking an effort to expand medical school enrollments by 30 percent nationwide by 2015 (after initially suggesting 15 percent growth). To meet the goal, U.S. medical schools would need to enroll 21,434 first year students in 2015 -- nearly 5,000 more than they did in 2002, when first-year enrollments totaled 16,488.

The AAMC envisioned that the creation of new medical schools and the expansion of existing ones would provide additional slots that, in all, would total close to 20,000 across all four years of traditional allopathic medical school.

Universities and hospital systems heeded the call. Dozens initiated or stepped up efforts to expand their medical schools, adding seats to their first-year classes and opening branch campuses to broaden their geographical reach. Others began laying the groundwork for new medical schools that would at once build institutional prestige and contribute to the larger national goal.

By last fall, enrollments had grown 11.5 percent over 2002 levels, with 18,390 students in the entering class. Close to 200 of those seats were in medical schools that opened in 2009: Commonwealth Medical College in Scranton, Pa.; Florida International University College of Medicine in Miami; Texas Tech University Health Sciences Center's Paul L. Foster School of Medicine in El Paso; and the University of Central Florida College of Medicine in Orlando.

Before the AAMC began its expansion efforts, it estimated that medical schools would add 919 new first-year seats between the fall of 2005 and the fall of 2010. Instead, between the creation of new schools and the expansion of existing ones, close to 1,400 spots were created by the fall of 2009. “We’re encouraged that schools and communities are listening to our recommendations,” Salsberg says. “We’re encouraged because we do think the goal is happening.”

But economic realities are clearly having an effect on just how quickly medical schools are being created and expanding. And even in good economic times, it might be a stretch to add 3,000 seats in half a dozen years.

Even if expansion continues at its current rate for the next six entering classes, U.S. medical schools won’t reach the goal on time, Salsberg says. “We don’t think that we’ll make it by 2015,” he says. “We recommended, but it’s up to the schools to make the expansion happen…. We’re making progress, just not as much as we would have liked.”

Salsberg anticipates that there will be 20 or 21 percent more first-year seats in American medical schools in 2014 than there were in 2002. The degree to which future enrollment cuts may erode those numbers -- even with growth elsewhere -- is unclear.

Sharp Declines for the Hoosiers

The Indiana University School of Medicine had plotted expansion by the AAMC book. After a work force study of the state’s physicians “confirmed that the 30 percent national estimate was true in Indiana as well,” says Peter Nalin, interim executive associate dean for educational affairs, the school set its sights on expanding its entering class size with the goal of growing enrollment 30 percent by 2013.

“The rationale has always been that there is a need for family physicians, primary care physicians, physicians in underserved areas,” he says. “We need to respond to an aging population and increasing demand for health care overall in society.”

To expand the first-year class from 280 students in the fall of 2006 to 364 in 2013, administrators planned to add 14 more seats to each of the school’s entering classes. Through August 2009, the plan was right on track, with 322 students starting at the medical school. The school was promised $5 million in state appropriations to pay for the expansion

When the state whittled that $5 million down to $3 million in its October estimate of the 2010 budget, the medical school responded by extending its expansion plan to reach the 30 percent goal. The school would’ve added six new seats in 2010 and eventually reached the goal of 364 first-year seats by 2015.

Then the budget picture got worse.

In December, Gov. Mitch Daniels cut funding to the state’s public colleges and universities by $150 million, more than a third of which would be taken from Indiana University’s state appropriations. By then, Michael McRobbie, the university’s president, had already made one-time cuts of $79 million and recurring cuts totaling $98 million annually.

With what amounted to a $59 million hole in state funding, McRobbie decided to trim $7 million from the medical school's budget, a choice that a spokesman told the Indianapolis Star was simply part of distributing the pain throughout the university. “Every single school and every department, even the president’s office, is cutting a proportional amount of their budget,” the spokesman said. “No one was excluded. Not one dean has been spared the pain of having to cut something.”

Daniels’ office issued a statement deflecting blame. "The university made the decision about how to implement the reduction. We don't have any comment about why IU decided this was the best direction to take among the many areas it likely reviewed."

On its own, the $7 million in cuts might have slowed or even stopped the medical school’s expansion effort. But, when coupled with the realization that the $5 million that had dwindled to $3 million would not materialize at all, the blow was even blunter, Nalin says. In all, the school’s state funding would be $12 million below what administrators had projected for the 2010-11 academic year.

So, not only did the medical school lose its funding for future expansion but it also lost the financial capacity to sustain the growth that had taken place in the last few years. The class that enters in August will probably total 280, Nalin says, the same that it was in pre-expansion 2006. “Our goal is ultimately to respond to that target of 30 percent -- it remains our vision of where we’d like to be,” he says. “However, we must roll it back based on the current financial situation and hope that we’ll eventually be able to achieve that 30 percent.”

Nalin says the school hopes to restart its expansion efforts (which, at first, would be efforts to restore classes to the size they reached last fall) in the next year or two. In a worst-case scenario, he’d like to see class size expand again by 2014. Any growth, though, depends on the state. “We respect the fact that if there aren’t state revenues then appropriated monies can’t be realized. But we hope those revenues will return.”

New Medical Schools

In raw numbers, the greatest contribution to the expansion is coming from new medical schools. Schools that were already building their facilities or applying for accreditation by the Liaison Committee on Medical Education have not lost momentum.

Besides the four medical schools that took their first students last fall, eight more have already started the official accreditation process. Virginia Tech Carilion School of Medicine is screening applicants this spring and will open in the fall with 42 first-year students. The Hofstra University School of Medicine, which is affiliated with the North Shore-Long Island Jewish Health System, aims to open in 2012.

Candice Chen, co-principal investigator of the Medical Education Futures Study at the George Washington University School of Public Health and Health Services, says she hasn’t seen state cuts and lagging philanthropy doing too much damage -- so far, anyway. “We haven’t seen a slowdown in new schools saying 'We were getting close to opening but now we’re not,' ” she says. “You never know if there would’ve been more right now if the economy was doing better.”

But some medical schools that were early on in the planning stages have put their plans on hold until local economies and state budgets loosen up a bit.

The University of California at Merced, which opened in 2005, was well on its way to planning a medical school. A consultant had conducted a feasibility study, the UC Board of Regents had approved the continuation of the planning process, and the university’s chancellor had appointed a vice provost for health sciences to oversee the school’s development. Administrators predicted that the school could take its first students in the fall of 2013.

All of that progress had happened by mid-Sept. 2008. Then the financial sky fell, across the nation and in California. Since then, says Patti Istas, a spokeswoman for Merced, the ambitions have become far less grandiose and immediate. “All these changes in the economy and the state budget have slowed things down,” she says. “We’re still in the infancy stages. It’s too early to pinpoint when the school might be able to open.”

Though Merced is “still hoping to open a fully accredited school of our own,” the university focused on “lots of concurrent activities while waiting for the funding to be allocated,” says Istas.

A team at Merced is working to create a branch campus of another UC medical school -- possibly Davis or San Francisco -- that could provide basic science instruction for the first two years of medical school. Faculty and administrators are also building up the university’s health-related research operations that could provide some of the foundation needed to fund and operate a medical school. The economy has touched those efforts, too, though, Istas says. “It has slowed things down.”

More than 300 miles to the south, in Riverside, a new UC medical school has already applied for accreditation by the LCME and plans to enroll 50 first-year students in the fall of 2012. The difference between the two projects: the timing.

Riverside was ahead of Merced in first considering its medical school -- faculty started debating the possibility of establishing a school in 2003 -- and continued to be ahead of Merced as the planning process progressed. Perhaps fortuitously (as Istas puts it, “timing is everything”), Riverside got final approval by the UC Board of Regents in July 2008, just before most people came to see just what a bad state the economy was in.

Before the end of 2008, Riverside secured some state funding, as well as the support of several foundations and local medical centers. Development continued and fortune continued to be in the school’s favor. Construction began on a new health science building and the university made plans to renovate existing instructional buildings.

In December, President Obama signed an appropriations bill for the U.S. Department of Health and Human Services that included an earmark of $4 million to support construction at Riverside.

G. Richard Olds, who became the school's founding dean in February. “I wouldn’t have taken this job if I thought this wasn't going to happen,” he says. “When no new programs were being added to the UC budget, the president still put our medical school into the budget. It was a bold thing to do and makes it clear that UC is serious about starting this medical school.”

Cutting Class Size, But Not Budgets

Though the Pritzker School of Medicine at the University of Chicago isn’t facing big budget cuts, its leaders decided more than two years ago that the best way to serve students and the community was to shrink its enrollment. After welcoming entering classes of 104 students for more than three decades, Pritzker had a first-year class of just 88 in the fall of 2009.

The 15 percent drop in class size is an effort “to more powerfully fund each of the students who enroll here,” says Holly Humphrey, the school’s dean. The goal, she says, is to produce better-trained doctors who won’t face financial barriers in choosing to practice in underserved areas or low-paying -- but high need -- fields.

“Without any new big donations, we became convinced that reducing class size would be the best way to … increase supervision and feedback, redirect learning and impact performance in a way that would truly benefit our students,” she says.

One new program funded by the savings that came with the enrollment cut is Repayment for Education to Alumni in Community Health (REACH), an effort to attract Pritzker graduates who have just completed their residencies to work in the underserved South Side of Chicago. In addition to their salaries, graduates in the program will be paid $40,000 a year for up to four years to help ease the burden of loan repayments. By reducing the debt burden on alumni, Humphrey says, Chicago hopes to see more graduates take jobs that strategically target areas in need of more physicians.

The average American medical student graduates with $140,000 in debt, but Humphrey hopes that by reducing class size, Pritzker will put its graduates well below that average. “One of the questions that isn’t often asked about expanding medical school class size is whether you’re also expanding financial aid dollars,” she says. “And the answer is often No.”

Though this year’s first-year class has 16 fewer students than last year’s, the class is still receiving the same total dollar amount in institutional aid. “We’re taking the same number of scholarship dollars and applying it to a smaller group, Humphrey says. “Short of getting a philanthropist to underwrite a big chunk of aid -- without considering whether or not you can sustain that over time -- this was the best way for us to try to reduce debt for the largest number of our students.”

After announcing the class size reduction, Humphrey says, the school got “lots of questions -- medicine and health care in general are accustomed to growing, expanding and getting bigger, so why on earth would we make something smaller rather than bigger?” Her answer: the changes make sense for the school and students, even if they may on the surface seem to run contrary to AAMC’s goal and the needs of the nation.

And, if Pritzker can figure out ways to cut costs or boost revenues, “we will expand the class as quickly as we can,” Humphrey says. “But that’s going to take us a few years to figure out.”

 

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