The Cost Bubble in Medical Education: Will it Burst and When?

Abstract

There has been a much recent debate about the cost of medical education and the burden of student debt that occurs as a result. There has been speculation that the cost of medical education now exceeds its value and that a financial bubble might be occurring. A bubble occurs when the cost of a commodity exceeds its intrinsic value and yet purchasers continue to buy the commodity at the inflated price. The current financial circumstances of medical education have much in common with financial bubbles in the past. Medical student debt is being driven by excessive financial liquidity. Students who invest in medical education are doing so largely on the basis of what the incomes of health-care professionals have been in the past – rather than what they might be in the future. Furthermore, students know that they are largely insulated from consequences of their investment in medical education going wrong. There are multiple circumstances in which graduates do not have to pay back their loans. If the cost bubble in medical education were to burst, it would have sudden and serious consequences for multiple stakeholders in this field. It would be wiser to use means at our disposal to slowly deflate the bubble.