“Free Tuition for All” gathers momentum as Kaiser Permanente joins NYU, others, by waiving tuition for the first five graduating classes of its new Kaiser Permanente School of Medicine. What’s next: “Free law-school tuition for all?”

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The News:

Kaiser Permanente School of Medicine, in Pasadena, CA, will waive all tuition for the school’s first five classes of students, the school announced last week. The private, nonprofit medical school, which is one of the few not affiliated with a university, has received preliminary accreditation from the Liaison Committee on Medical Education and will begin accepting applications from prospective students in June 2019 for admission to the school’s first class in the summer of 2020 says Medscape.

“We are thrilled that the Kaiser Permanente School of Medicine has received preliminary accreditation to develop a world-class, 21st-century medical school,” Holly Humphrey, MD, Kaiser Permanente School of Medicine board chair and president of the Josiah Macy Jr. Foundation, said in a news release. “We believe that the school will be a catalyst for change in medical education and will provide a remarkable opportunity for the students who are fortunate enough to attend,” said Humphrey.

Kaiser Permanente Medical School is not the first to offer free tuition. Last July, the University of Houston announced that all 30 medical students in the inaugural class of the university’s new College of Medicine will receive free tuition when the school opens in the fall of 2020. Last August, New York University (NYU) School of Medicine followed suit in announcing it would offer free tuition to all current and future students regardless of need or merit.

Debt is perhaps one of the biggest barriers to entering medical school. As the Medscape Residents Salary and Debt Report 2018 shows, more than a quarter of residents report between $200,000 and $300,000 in medical school debt. The Association of American Medical Colleges found that of all American physicians who graduated in 2017, 75% owed money, and members of the 2017 graduating class had a median debt of $192,000.

Steve’s Take:

Let’s start with the current political slogan: “Free Medicare for all.” Now we’re suddenly hearing about, “Free medical school tuition for all.” What’s next? You’ll hear my conjecture later.

But let’s take a closer look at this move by Kaiser Permanente that said last week it will waive tuition for the first five graduating classes of its new Kaiser Permanente School of Medicine, which is set to open in summer 2020.

Kaiser’s announcement comes after NYU School of Medicine’s announcement last August that it will cover the full cost of tuition for all its current and future medical students, regardless of merit or financial need. The NYU School of Medicine is raising $600 million from its donors in order to fund its tuition plan in perpetuity.

A “new” medical school–in a lot of ways

Kaiser in December 2015 announced plans to open its own medical school. The school, which will be one of the few medical schools in America not connected to a university, will start taking applications this June. Each class will have 48 students, which is smaller than most medical schools, says Advisory Board.

According to Mark Schuster, founding dean and CEO of the new school, the curriculum will focus on Kaiser’s model of integrated care in which physicians work on teams with pharmacists, social workers, and others to ensure each patient’s needs are fully addressed. The school will not have lecture-style science courses, and instead, will place students immediately into longitudinal integrated clerkships within Kaiser hospitals and clinics, beginning with primary care and then in the second year adding surgery, OB/GYN, pediatrics, and psychiatry.

Kaiser announced that it will waive tuition for the first five classes of its new school, in the hopes that students will not forgo lower-paying specialties such as family medicine because of medical school debt.

“We don’t want debt to influence students’ career choices,” Schuster said. “We would like it so students can follow their heart and go into the work environment that feels right [to] them.”

Annual tuition for Kaiser’s school will be about $55,000, and that, combined with the health insurance that Kaiser will be offering to its students, means Kaiser will be paying about $60 million for the initiative. Kaiser will use part of its almost $73 billion in operating revenue that’s dedicated to “community benefits,” which nonprofit provide hospitals as part of their tax-exempt status, to fund the effort.

Kaiser will not cover living expenses for its students, which in Southern California are closer to the Bay Area and NYC. So this isn’t really a free ride, to be sure.

“Even middle class families are finding medical school hard to pay for,” Schuster said. “We’re going to see how this plays out and learn from it.”

Advisory Board reports that Kaiser does not plan to cover tuition for students beyond the first five graduating classes, but will provide “very generous financial aid” based on need. (Ref: Goodnough, New York Times, 2/19; Brooks, Medscape, 2/19; Ducharme, TIME, 2/19; Herman, Axios, 2/20; Kaiser Permanente release, 2/19).

I found quite perceptive the Op-Ed piece of Advisory Board exec director Russell Davis and Health Plan Advisory Council consultant, Natalie Trebes. They argue that the attention given to the free tuition at Kaiser Permanente’s School of Medicine distracts from the greater significance of the initiative. In fact, it’s fairly common for new schools to lower tuition to help them get started and attract quality candidates. What does seem unique is that Kaiser is counting the funding as “community benefit” spending, which is a sign that it very much sees this as a population health management move (and may have to prove that to regulators).

They add that, “As a fully-integrated system, Kaiser has a dire need for clinicians who not only provide high quality care but also understand that they ‘own the healthcare dollar-—and what that means in practice at the point of care. Traditional medical schools, it seems, have not produced enough physicians who internalize this perspective, so Kaiser is ‘breaking this mold with a sledgehammer’ and creating its own.”

That a health plan is launching a medical school is telling, Davis and Trebes note. In a fee-for-service world, the tradeoff between cost and quality occur between the provider and the health plan, to the frustration of the patient. New solutions require more than new payment models; they require new thinking and new behaviors. Kaiser is hoping to create the generation of physicians who will do it.

Like the decision last year by NYU’s medical school to offer free tuition to all its students, Kaiser Permanente said it hoped by reducing the financial burden on future doctors for their education, it would encourage students to go into primary care and other lower-paying specialties.

“We’ve watched so many students over the years start off with dreams of working in underserved communities and/or going into primary care, or maybe infectious diseases, or a field that is not as remunerative as some others,” Mark A. Schuster, MD, founding dean and CEO of the school, said in an interview with Fierce Healthcare.

“As they face the reality of their debt as they go through medical school and see the other options and how different the income can be, they often switch,” Schuster said. “We don’t want debt to be changing what they want to do. We want them to follow their dreams.”

But not everyone thinks that making medical school tuition-free for all students, including those who can afford it, will accomplish the goal of encouraging more students to go into primary care, where a major physician shortage is predicted in the coming years.

“That is mostly the excrement of horses,” Robert Centor, MD, the former regional dean of UAB Medicine, Huntsville, said in an interview shortly after the NYU announcement last August.

Centor said he thinks the reason behind NYU’s decision is to attract the best medical students it can as it competes with other high-ranking schools. He didn’t think a tuition-free education would influence whether students go into primary care. “I’m skeptical,” said Centor, who retired in 2016 after 12 years as regional dean at the Alabama campus and a long career as a professor of medicine.

In the US, orthopedic doctors who are at the top of the salary list make an average of $414,283, while primary care physicians rank near the bottom. Internal medicine physicians earned an average of $212,915; family medicine physicians earned $208,272 and pediatricians were last on the list at $199,616, according to one recent survey.

Calling NYU’s proposal “ambitious and game-changing,” in theory, it’s possible that some students who would have chosen lucrative specialties will instead choose primary care because they will be less worried about paying back student loans, said Anupam B. Jena, MD, an associate professor at Harvard Medical School. But she thinks the effect will be small.

A free-tuition policy at a top-ranking medical school like NYU will attract some of the most academically competitive students in the country, she said and noted that those students are more likely to enter lucrative specialties.

“It may not have its intended effects but ultimately that is a question that we can study, and we will very clearly be able to see the answer within a few short years,” she said.

Bottom Line:

It’s no secret there’s a colossal student loan crisis happening in the US. And the legal community is right there in the middle of it along with the MDs, PhDs and many others. Kerriann Stout at Above the Law reports that according to the 2019 US News & World Report, the average law school debt ranges from $56,173  to $182,411, and the overall average is probably somewhere slightly north of $100,000.

The current tuition at my former law school is roughly $60k/yr. Not a drop in the hat. And some of us wonder if law schools can and should follow Kaiser and NYU with their type of free-tuition programs.

Ms. Stout points out that the NYU School of Medicine isn’t the first school to implement this type of free tuition program. For example, New York State’s Excelsior program makes college tuition at SUNY or CUNY schools free for middle-class families and individuals making up to $125,000 per year. However, NYU’s program differs in that the free tuition is not need- or merit-based. Rather, it is available to every accepted student. And like Kaiser, one thing this free tuition program of NYU does not cover is living expenses, which the school’s website estimates to be $27,000.

What is most exciting about NYU’s program for the law school community is that it is both a private school and a graduate school. Medical schools and law schools are frequently compared in many ways. For example, admissions standards, rigor, testing, etc. Therefore, it makes sense to draw tuition-based parallels as well.

NYU School of Medicine characterizes the reasons behind their tuition-free program as follows:

Saddled with staggering student loans, many medical school graduates choose higher-paying specialties, drawing talent away from less lucrative fields like primary care, pediatrics, and obstetrics and gynecology. Moreover, the financial barriers discourage many promising high school and college students from considering a career in medicine altogether due to fears about the costs associated with medical school.

The reasons cited also apply in the law school context, Stout argues. For example, eliminating or reducing student loan debt will incentivize talented students to accept positions that are lower paying but are important public interest and government jobs. Additionally, it will open doors to students who would have otherwise not applied to law school due to cost. This could potentially lead to a much-needed increase in diversity in law schools.

Another thing that law students/lawyers and medical students/doctors have in common are high rates of anxiety, depression, suicide and addiction. There are many factors that go into these unfortunate statics, including the high demand of the programs and exams and the heavy time, energy, and emotional responsibilities each profession requires. It’s hard to contemplate that being strapped with hundreds of thousands of dollars in student loan debt after graduation doesn’t contribute significantly to these sorry data. The absence or lessening of overwhelming student loan debt almost certainly would ease these pressures so graduates can better cope.

So how did NYU make this happen, and how can we make it happen in the legal community? Stout replies, “Good old-fashioned fundraising.” According to NYU, the funds were raised by more than 2,500 supporters, including trustees, alumni, and friends. The New York Times reports that NYU has raised over $450 million of $600 million necessary to fully fund the tuition plan. Further, the Times reports that about $100 million of the money contributed was donated by the school’s namesake, Kenneth G. Langone, the founder of Home Depot.

Law schools fundraise all the time for scholarships, capital projects, programs, etc. Stout suggests that perhaps the next big law school fundraiser will be for tuition-free law school? She hopes that’s the case. Although, maybe not starting with her law school. Now that’s journalistic candor!

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