Free medical school tuition unlikely to have a major impact on the U.S. health care system

Most of Johns Hopkins University’s medical school students will have free tuition starting this fall, thanks to a $1 billion gift from Bloomberg Philanthropies, a longtime donor of the university, whose school of public health is named after Michael Bloomberg. The largesse is striking, but, even combined with other recent moves to relieve future doctors of crushing medical debt, the move may not reverberate to bring improvements to the broader health care system, experts say.

According to the announcement, part of the gift will go toward increased tuition aid for health care students other than future doctors, such as public health and nursing. For future doctors attending the school, the impact will be more significant. All medical students from households earning under $300,000 a year will qualify for free tuition, and students from households earning less than $175,000 a year can have fees and living expenses paid for. Nearly two-thirds of currently enrolled students will enjoy one or both of these benefits. 

“As the U.S. struggles to recover from a disturbing decline in life expectancy, our country faces a serious shortage of doctors, nurses, and public health professionals—and yet, the high cost of medical, nursing, and graduate school too often bars students from enrolling,” said Michael Bloomberg in a statement. (Bloomberg Philanthropies supports STAT’s coverage of chronic health issues; it is not involved in any decisions about our journalism.)

Johns Hopkins joins a few other medical schools that have become tuition-free in the past few years, including NYU Grossman School of Medicine, Kaiser Permanente Bernard J. Tyson School of Medicine, and, most recently, Albert Einstein College of Medicine. 

But while these kinds of programs can have a huge impact on the lives of students, they are likely to have a limited impact on the broader medical system — be it in terms of expanding the health care workforce or moderating the price of medical services — experts told STAT.

Rather, some said, the move may be a response to an increasingly competitive marketplace for medical education. “Johns Hopkins has had to compete with a couple of other places that have had these big donations and free tuition recently. And this is an effort to compete with them and attract the best [future] doctors,” said Joshua Gottlieb, a health economist at the University of Chicago.

The outcome of the policy may be to affect where top candidates will go, rather than actually expand the pool of doctors, because the overall number of spots available wouldn’t grow. Nor is it expected that the number of residency spots, even now inadequate to place the current, limited number of graduates, will expand. “Without increasing the number of physicians, you aren’t going to have any impact on the labor market downstream. It’s not going to be more affordable to find a doctor, it’s not going to be easier to find a doctor,” said Gottlieb.

However, this kind of competition could, some say, end up driving meaningful changes in the student body. “To the extent that this spurs more schools to say, ‘we should try and address this issue of high debt’ … I think it may actually help to get to that more diverse pool of applicants, and not just kind of shift around where those top candidates are choosing to go,” said Atul Grover, the executive director of the Association of American Medical Colleges Research and Action Institute, who is on faculty at the Johns Hopkins Bloomberg School of Public Health. There are potential medical students, he said, who can’t make the choice of becoming doctors because they come from low-income backgrounds and are expected to help support their families, and cannot even contemplate the possibility of waiting for years after graduation to be able to extinguish their debt. 

These, too, are students who may not have grown up with the specific expectation that going into a medical career equals high earnings, and so if they were able to access a medical degree, they might also be attracted by specialties with lower earning potential, said Grover. 

But even on a bigger scale, if there was free tuition for all, or most, medical students, that wouldn’t necessarily address predicted shortages of doctors, nor is it likely to increase the chances that doctors pick less remunerative specialties such as primary care. 

Getting rid of tuition would also be unlikely to reduce the cost of doctors’ services. Though their salaries amount to only about 10% of the country’s overall health care cost, a reduction in their fees would still reduce total medical spending. But “the cost of medical school does not explain the higher salaries of physicians in the U.S.,” said Gottlieb, arguing that it’s rather the scarcity of doctors, and the reimbursement rates set by Medicare, that determine those salary levels. Though student debt is often cited as a justification of hefty doctor fees, total school debt is so minimal compared to the lifetime earning potential of a doctor — $6 million to $10 million on average — that it isn’t a factor in determining their affordability. 

When it comes to choosing a speciality, the cost of medical school hardly matters, said Gottlieb. This is why he believes even low-reimbursement specialties such as family medicine set doctors up to make more than enough money to repay eventual student loans, and having no debt to repay “doesn’t change the fact that you can earn two or three times as much in surgery as in family medicine,” said Gottlieb. So doctors who respond to higher earning potential would continue to do so, with or without having to face tuition costs. “The amount of debt that’s kind of on the order of one, maybe two years of earnings … that’s not a very big difference relative to earning two or three times as much for your entire career,” he said. 

Of course, free med school does make a difference for current students. It opens opportunities for students who would not have the financial resources to apply (for instance, students who’d need to help support their families), especially when no tuition is paired with coverage of living expenses. Yet “it’s a poorly targeted solution,” said Jason Abaluck, a professor of economics at Yale. “Because what it’s doing is it’s taking people who are rich over their lifetime and making them even richer.” And while it’s true that doctors tend to earn most of their money later in their careers, there could be other solutions to help them when they’re starting out in the profession — for instance, funds where older doctors pay a portion of their salary so that younger ones can have access to supplementary income, only to pay those funds back later in their career. 

And when it comes to expanding diversity of access, giving free tuition to the majority of medical students, even with loose income requirements, does not maximize the potential of helping those who need support to be able to attend school, including in the form of stipends, said Abaluck. “It seems like it’s just a huge mistake to say, ‘let’s give that to everyone,’” he said,“as opposed to ‘let’s give that to the people who actually need it.’”