PERSPECTIVE ARE WE IN A MEDICAL EDUCATION BUBBLE MARKET patients and what schools can Family medicine charge students. Just as tulip bulbs can be sold at high prices only to people who think they can resell hem at still higher prices, schools Obstetrics and gynecology can sustain their high tuitions General surgery only if students can be convinced Anesthesiology of higher returns in the form of payments from future patients. So, he amount that schools are able Orthopedics to charge students is inextricably linked to how much we pay doc- tors now and how much we plan to pay them in the future. Medi- I students can take on enormous debt only because the costs of that debt can be easily passe along to others down the road So are we in a medical educa- tion bubble? we would realize we 乎小心心少炉 have been in one if a sudden col lapse in what patients are willing to pay doctors made it impossi Figure 1. Ratio of Debt to Income, According to Medical Specialty. ble to sell medical education at Data on median incor from the Medical Group Management Association. Data current prices, causing applica- on average debt are from surveys conducted by the Association of American Medical tions to fall and some medical schools to cut tuition to continue to attract qualified applicants. Fig is believed that patients, or who- dents must borrow rather than ure 1 might be seen as suggest- ever purchases health care on their what they must pay and, given ing that we are approaching such behalf, will keep paying more and whatever other assets they may a collapse in primary care fields more for physicians'services, stu- have, how much in the hole they and psychiatry. But that is not like- dents and trainees should be will- have to go. Thus, these ratios may ly to be the case. First, at least at ing to pay more and more for the better reflect how students actually the level of undergraduate medi- education that enables them to feel about buying education. cal education, schools charge a sell Figure 1 shows these ratios for single price to students whether A simple measure of this mar- selected medical specialties over they go into family medicine or ket economy is the ratio of the the past 15 years and reveals that orthopedics. Although it isn't nec- average debt of a graduating stu- the ratio has become less favor- essarily clear to students or schools dent to the average annual income able for students overall but par- which students will choose what in the profession on entry into ticularly unfavorable for students fields, the income of the average the workforce. There are more entering family medicine or psy- doctor can sustain the debt of the precise ways to measure the re- chiatry. Although the cost of be- average doctor even as the differ- turn on investment in medical coming a doctor is roughly the ences among specialties create education-for example, the net same whether you go into pediat- pressures for primary care and present value of the stream of cash rics or orthopedics, you earn much psychiatry flows out (for education) and in more in orthopedic Second, as high as the debt-to- income ratios may be for primary and psychiatry, they dents. In 1g income ratios reflect what stu- tween what physicians can charge notably, veterinary medicine, op N ENGL J MED 369: 21 NEJM. ORG NOVEMBER 21, 2013PERSPECTIVE 1974 n engl j med 369;21 nejm.org november 21, 2013 is believed that patients, or who￾ever purchases health care on their behalf, will keep paying more and more for physicians’ services, stu￾dents and trainees should be will￾ing to pay more and more for the education that enables them to sell those services. A simple measure of this mar￾ket economy is the ratio of the average debt of a graduating stu￾dent to the average annual income in the profession on entry into the workforce. There are more precise ways to measure the re￾turn on investment in medical education — for example, the net present value of the stream of cash flows out (for education) and in (for services). But that value isn’t very intuitive for most prospec￾tive students. In contrast, debt-to￾income ratios reflect what stu￾dents must borrow rather than what they must pay and, given whatever other assets they may have, how much in the hole they have to go. Thus, these ratios may better reflect how students actually feel about buying education. Figure 1 shows these ratios for selected medical specialties over the past 15 years and reveals that the ratio has become less favor￾able for students overall but par￾ticularly unfavorable for students entering family medicine or psy￾chiatry. Although the cost of be￾coming a doctor is roughly the same whether you go into pediat￾rics or orthopedics, you earn much more in orthopedics. The graph is instructive in an￾other way: the debt-to-income ratio reveals the connection be￾tween what physicians can charge patients and what schools can charge students. Just as tulip bulbs can be sold at high prices only to people who think they can resell them at still higher prices, schools can sustain their high tuitions only if students can be convinced of higher returns in the form of payments from future patients. So, the amount that schools are able to charge students is inextricably linked to how much we pay doc￾tors now and how much we plan to pay them in the future. Medi￾cal students can take on enormous debt only because the costs of that debt can be easily passed along to others down the road. So are we in a medical educa￾tion bubble? We would realize we have been in one if a sudden col￾lapse in what patients are willing to pay doctors made it impossi￾ble to sell medical education at current prices, causing applica￾tions to fall and some medical schools to cut tuition to continue to attract qualified applicants. Fig￾ure 1 might be seen as suggest￾ing that we are approaching such a collapse in primary care fields and psychiatry. But that is not like￾ly to be the case. First, at least at the level of undergraduate medi￾cal education, schools charge a single price to students whether they go into family medicine or orthopedics. Although it isn’t nec￾essarily clear to students or schools which students will choose what fields, the income of the average doctor can sustain the debt of the average doctor even as the differ￾ences among specialties create pressures for primary care and psychiatry. Second, as high as the debt-to￾income ratios may be for primary care and psychiatry, they are even higher for some other fields — notably, veterinary medicine, op￾are we in A Medical Education Bubble Market? Ratio of Debt to Income (%) 100 40 50 10 60 20 30 0 70 80 90 Family medicine Psychiatry Emergency medicine Obstetrics and gynecology Anesthesiology General surgery Radiology Cardiology Orthopedics 1996 1998 2000 2002 2004 2006 2008 2010 Figure 1. Ratio of Debt to Income, According to Medical Specialty. Data on median income are from the Medical Group Management Association. Data on average debt are from surveys conducted by the Association of American Medical Colleges