By: Ryan Kelly
If you went to medical school 30 years ago, you would have likely graduated with $32,000 in student loan debt. That’s about $70,000 in today’s dollars if you account for inflation.
Sure, $70K is not chump-change. But it sure looks paltry when compared to the 2018 average debt of $192,000.
Overall, things seemed to take a turn for the worse in the early 80s. Between 1984 and 2004, average tuition and fees jumped 165% in private medical schools and 312% in public medical schools.
For further reference, in 1981, the average tuition and fees at public and private US medical schools were $2,761 and $8,962, respectively. In 2002, the averages were $14,577 and $30,960, representing increases of 528% and 345%, respectively.
The 90s and 00s weren’t any better. From 1998 to 2008, the average level of debt for medical students increased by more than 50%.1. Overall, the cost of medical education has been rising at double the rate of inflation.
Since the cost of medical school tuition has risen reliably over the past two decades, you can expect the average cost in 2020-21 to be around the same, if not higher than it has been in the previous few years.
Why Has the Cost of Medical School Skyrocketed?
The answer is (somewhat) simple: it’s very expensive to train a doctor in the U.S., and it’s only getting more expensive as the field and its technology evolve.
Just think about all the cadavers, equipment, and affiliations with local hospitals.
There is also a tremendous amount of liability that must be compensated for. One striking example is Drexel School of Medicine losing its hospital partnership and hastily finding a replacement, likely with little leverage in terms of expense.
Depending on the specialty, it takes 11 to 15 years to train a physician when you count college, medical school, residency, and fellowship. At each step, there are direct costs and indirect costs. Some costs are paid by the physician in training and some are paid for by society in general (usually through state or federal taxes).
Here’s a breakdown of the direct and indirect costs at each step:
Undergraduate education – Colleges have three income sources: tuition, endowment, and government funds. For this reason, the total cost to educate an undergraduate is considerably more than what students pay in tuition. Most colleges have to finance students’ education, but also the research professors perform to keep their jobs. Thus, it’s hard to separate educational costs from those of research. Public colleges receive government funds to subsidize education and research, resulting in lower tuition for in-state versus out-of-state residents. The out-of-state tuition best reflects the cost to teach undergraduates without subsidy.
Private colleges and universities generally do not receive state governmental subsidies and have considerably higher tuition. For this analysis, let’s use the cost of attendance for out-of-state freshmen at the Ohio State University, including tuition, fees, books, room, board, and miscellaneous expenses, which is $49,556. For four years of college, this would be a total of $198,224.
Medical education – Medical schools have the same three income sources as undergraduate colleges, so let’s use the cost of attendance for an out-of-state medical student at the Ohio State University College of Medicine. Once again, this estimate is for tuition, fees, and estimated living expenses. Unlike undergraduate college, the cost of medical school varies considerably for each of the four years: year one = $80,019, year two = $76,026, year three = $114,442, and year four = $114,542. Totaling all four years, the cost is $385,029.
Residency – the direct costs are the resident’s salary and benefits. At the Ohio State University Medical Center, these costs are $51,510 for a first-year (intern) and increase each year so that a fourth year’s expenses are $56,636. However, the direct costs only scratch the surface. There is everything from hospital call rooms, to residency program administrators’ salaries, to the salaries of faculty to cover teaching time. Most indirect costs are paid from federal tax dollars via Medicare.
The Alliance for Academic Internal Medicine estimated that the total cost to train a resident is $183,416 per year. For three years as a general internist, pediatrician, family physician, or hospitalist, the cost is $550,248. It takes longer to train other specialists. For example, an obstetrician takes four years ($733,664), a gastroenterologist takes six ($1,100,496), and an interventional cardiologist takes seven ($1,283,912).
Adding all the above costs together, the total cost to train physicians is astounding:
$1,133,501 – general internist, family physician, pediatrician
$1,316,917 – obstetrician, psychiatrist
$1,500,333 – general surgeon, endocrinologist
$1,683,749 – gastroenterologist, pulmonary/critical care, general cardiologist
$1,867,165 – interventional cardiologist, neurosurgeon
Where Does All Your Medical School Tuition Go?
There have been several studies conducted over the last three decades to investigate the annual costs of educating a medical student, both in terms of instructional costs and educational resources costs.
These past studies have found that instructional costs range from about $48,000 to $51,000 per student per year, and educational resources costs from about $80,000 to $105,000 per student per year. Instructional costs are comprised of professor salaries and costs that relate directly to teaching, while educational resources include all activities of research, scholarship, patient care, and maintenance of facilities.
Therefore, tuition does NOT cover all costs to fund your medical education. This inherently means that medical schools must derive funds from other sources.
Where Do Medical Schools Get Their Money?
Medical schools have several sources for their revenue streams. Allopathic schools derive a small percentage (10% or less) from tuition. However, osteopathic schools depend more on tuition (15% to almost 50% of revenue). This is because osteopathic schools generally do not receive as much grant money (research funding), government funding, or hospital revenue as allopathic institutions.
Due to changes in our healthcare system and the economy, practice plans and hospital revenue account for increasing portions of total revenue, while grants (research funding) are decreasing. The overall effects of these changes account for millions of dollars of revenue being derived from alternative sources, such as endowments, government appropriations, or gifts.
Recent downturns in state economies have forced budget cuts, thereby affecting state appropriations for medical education. Therefore, tuition becomes an important source for medical schools to compensate for reductions in other revenue streams.
So, in short, it seems like things could be worse!
I’m not trying to be an apologist for medical schools or the system at large, but when you look at the costs objectively, it’s not surprising that tuition is so pricey.
Have any questions about medical school tuition? Want to gripe about the cost of fees and applications?
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