“America’s medical schools and teaching hospitals see good news and bad news in President Obama’s proposed budget,” begins a statement issued by the Association of American Medical Colleges on Wednesday. “We are encouraged by the president’s continued support for medical research as reflected in the modest increase in funding for the National Institutes of Health. However, we are deeply concerned that the cuts to Medicare in the president’s proposal will have serious consequences on the health of the nation.”
The AAMC explains that cuts to Medicare indirect medical education payments will reduce the number of physicians, nurses, and first responders that teaching hospitals can train. “Cutting essential federal support for teaching hospitals could mean up to 10,000 fewer physicians trained every year when the nation already faces a shortage of nearly 92,000 doctors in the next 10 years,” argues the AAMC.
All told, it is a pretty straightforward supply-demand problem. America’s health care needs are growing, which is increasing the demand for health care services. At the same time, the industry’s work force is facing tremendous pressure. Sequestration spending cuts, economic headwinds, and controversial reform are only part of the equation, too.
America’s would-be and will-be doctors are facing a unique student debt environment that can leave them as much as $400,000 in the red after they graduate. These enormous debt loads could disincentivize people from going to medical school.
Last year, during a testimony before Congress, Federal Reserve Chairman Ben Bernanke mentioned that his son, who attends medical school in New York, is likely to graduate with $400,000 in student loan debt. This is an astonishing amount of debt to have when entering the workforce…
A report issued by the AAMC in February found that the “median education debt for indebted medical school graduates in 2012 was $170,000, and 86 percent of graduates report having education debt.” Additionally, “debt levels for indebted medical school graduates and medical school cost of attendance have both increased faster than inflation over the last 20 years.” On average, the median amount of education debt for graduates has increased 6.3 percent per year since 1992.
The report goes on to suggest that it is unclear if physician compensation will increase or decrease as a result of the projected shortage, the full enactment of the Patient Protection and Affordable Care Act, or other anticipated changes in the delivery of health care.
“Though some of these uncertainties will be resolved, others will undoubtedly emerge, affirming the need to reexamine the state of medical education debt in the future,” the report concludes. The report points out that, as it stands, physicians seem able to repay current debt loads, even if it sometimes takes decades. However, rising costs and compensation volatility could easily disincentivize would-be physicians from entering the field.
For some context, the health care sector added 23,000 jobs in March, in line with the average rate for the prior 12-month period. New enrollments increased by 1.5 percent at medical schools, the highest rate on record.
Meanwhile, a report issued by CSC states that “most studies before passage of the Affordable Care Act projected shortages of at least 124,000 physicians and 500,000 nurses by 2025,” and that “there is general agreement that the additional 32 million covered lives resulting from the Affordable Care Act requires inflating those projections.”
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