The medical education ‘bubble’!!

‘ Bubble markets are created when an asset trades for increasingly higher prices as it is bought by people who are hopeful about its future value and then sold to others with even more optimistic views of that value.’ The classic example is that of the US housing  bubble, to which is attributed the downturn of the US economy. David Asch carries this logic forward into the medical education field in article in the November 21st issue of New England Journal of Medicine.

In spite of the vast differences in the two systems,  I could see how many of the points he was making, are so valid to the Indian scenario. In the US, students enter medial school at a later and hence more mature age than here. Except for the privileged children of first generation immigrants, they fund their own education  through student loans. All education is private and hence expensive. There are real market forces at work here – doctors need to earn adequately to repay loans, insurance companies are seeing how high they can push the premiums, colleges are seeing how far they can drive the fee increase and so on!! So, fees and premiums are fixed based on the potential earning capacity of the doctors. But, all undergraduate education costs the same, while there is a huge disparity in the earnings made by different specialties. This brings a bias in selection of specialties, not based on the needs of the health care system or even the aptitude of the student. And so, if you do Family Medicine in the US, you may be repaying your student loan even when your own kids reach college going age.

Figure 1Ratio of Debt to Income, According to Medical Specialty.
Ratio of debt to income according to medical specialty – in the US

With the increasing alarm at health care expenses, and consequent efforts to trim these, salaries are not going up as they used to. Any decline in repayment potential will see a downturn in the insurance market and maybe even in the medical schools!   This is the bubble – and Asch at the end of his article says “Although it seems unlikely that we’re in a bubble market for medical education, we may already be in one for veterinary medicine. That bubble will burst when potential students recognize that the costs of training aren’t matched by later returns. Then the optometry bubble may burst, followed by the pharmacy and dentistry bubbles. At the extreme, we will march down the debt-to-income-ratio ladder, through psychiatrists to cardiologists to orthopedists . . . until no one is left but the MBAs.” (

In India, we have a hybrid system in both medical education and health care delivery. Over the last 2 decades, as Government has progressively abdicated its responsibilities in this area, the private sector has stepped into both spheres – with the expected consequences. Students opt for medicine less from aptitude than from social and family pressures. Private medical care is  expensive and specialty driven, and pays doctors better than the Government. Private medical education is expensive, and as per the local culture, all costs are borne by parents. Hence, young doctors (younger and hence less mature than in US) opt for the more lucrative specialties  – with similar consequences as the US – Government jobs (not an option in the US)  which are seen as less lucrative are the least favored and the less monetarily rewarding the specialty, the less favored these are. So, in effect in a scenario where there is an overall shortage of trained doctors,  ‘Family Medicine’ will get as short a shift here as is the US. But, since the business model is different here, although the balloon is enlarging at an alarming rate – every one will conspire to keep it inflated!It does not auger well for the future of helathcare.


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