Wednesday, April 27, 2022

Why Does the Federal Government Subsidize Foreign Medical Schools?

 As Reported by Steve Rhode in Get Out of Debt Guy, the Federal Trade Commission recently filed an action against St. James School of Medicine, located in the Caribbean. According to the FTC, St. James "deceptively marketed the school's medical license exam test pass rate and residency matches to lure prospective students."

The FTC seeks a $1.2 million judgment against St. James. This judgment, the FTC asserts, will go toward student refunds and cancellation of student debt for aspiring doctors who attended St. James over the past five years.

You may wonder why the FTC asserts jurisdiction over a medical school operating outside the United States. As it turns out, this Caribbean medical school receives federal student-loan money. St. James is hardly in a position to argue that its recruiting activities are none of the FTC's business.

St. James is just one of more than twenty foreign medical schools that receive federal student-loan money. Five of these schools are in the Caribbean, but medical schools in Australia, Canada, Ireland, Israel, and Poland also receive revenue from federal student loans.

Going to a foreign medical school is expensive. According to a U.S. government website, the median cost of completing a medical degree at  St. George University's medical school in Grenada is $385,000.

So why not get your medical degree from Ross University in Barbados? The median cost is only $348,000--a bargain!

Why is our federal government subsidizing foreign medical schools? Are there not enough American medical schools to meet the nation's health needs?

If not, why don't we build more medical schools in our own country instead of subsiding medical training in the Caribbean?

Moreover, it can be dangerous for an American to get a foreign medical degree. Why? Because there are more M.D. graduates in the United States than residency programs to train them. 

As the New York Times reported recently, more than half of the American residency programs are "unfriendly" toward graduates of foreign medical schools. In fact, only 60 percent of international medical-school graduates get a residency in the United States compared to 94 percent of doctors who graduated from American medical schools.

Most Caribbean medical schools are for-profit institutions, often owned by American investors. Many have very lax admission standards. The admission rate at some Caribbean medical schools is 10 times higher than at American medical programs.

What are the takeaways? First, Americans should be wary of attending a foreign medical school because they run a high risk of not being selected for a residency program that they will need to get a medical license.

Second, Congress should stop subsidizing foreign medical schools, which are horribly expensive and leave many of their graduates with no job prospects.

But the for-profit industry has powerful lobbyists, and Congress is unlikely to act. At the very least, then, Congress should reform the Bankruptcy Code so that jobless graduates of foreign medical schools can discharge their enormous student debt in bankruptcy. 


  1. Anyone that spends time tracking the doings of the American Medical Association over the past one hundred and seventy years may have a different approach to this issue. Since its founding, the AMA has worked to limit the number of physicians in this county, primarily as the means to elevate their status (very successful) and maximize income (also successful).
    Foreign physician programs dating back to the 1960s were implemented in order to fill the gap between the number of doctors needed by the citizenry, and those actually produced here.
    Lately, nurse practitioners and physician assistant positions have mushroomed to fill the breach, but still, there are not enough doctors.
    The success of the AMA in controlling government licensing requirements (even shutting down all but two black medical schools following the release of the Flexner Report) is the reason we have to off-shore any medical schooling and invite waves of immigrant physicians. Private medical schools -- like those started by Robert Ross -- would not be necessary without the government sanctioned monopoly that the practice of medicine became.
    Universities are themselves the beneficiaries of Flexner's legacy -- having absorbed them, finally, into their credentialing operations.
    Ross is responsible for more home-grown doctors, and his residency programs are among the most sought after only because our production of physicians is so **limited** by credentialism.
    Randall Collins talked about the time he served on an admissions committee, and his choice of a Marine Medic with actual experience was nay-sayed by those favoring academic credentials.

  2. WSJ ran an obit on Robert Ross 3/23 or 3/24/2011, stating that he "sold Mickey Mouse watches to Soviet soldiers at the end of WW2, ... and $29.95 Romanian suits to New Yorkers who lined up around the block to buy one."
    But he is remembered for founding "one of the largest medical schools in the Western Hemisphere" and started a second medical school, veterinary school and nursing school by the time he was 92 years old. "Ross University .... placed more physicians in U.S. residencies than any medical school in the world" in 2010. This explains the competitive politics of residencies, don't you think?
    But here's the kicker: "Mr. Ross founded Ross University in 1978 at the instigation of an employee, whose son was having problems getting into medical school. He staffed the university in part with retired U.S. faculty, which gave them a nice post-retirement income in a beautiful part of the world" and the formula worked!
    The article goes on, but here's the take-away: credentialing engines have gotten their hooks into medicine and now completely control it, as well as what we think about it (see Collins 1979/2019).
    Let's compare our system with China's barefoot doctors during the cultural revolution -- an explicit repudiation of the Soviet bureaucratic machine at all levels of society. It was a huge disaster, of course, but somewhere *between* the barefoot doctors and our own medical school system there exists an optimal equilibrium point -- BUT the real tragedy is, we will NEVER know what that point is because it has been so thoroughly monopolized, in terms of the cultural capital it produces, and that it says about itself in the media. Those that share their doubts are labeled as deviants, or paranoid conspiratorialists.
    Burton Bledstein, in his introduction to "The Culture of Professionalism" (an unlikely history of higher ed), notes what we have lost as a nation with the rise of the "expert".

  3. Foreign physician programs, which date back to the 1960s, were established to bridge the gap between the number of doctors required by the population and those available locally. Nurse practitioners and physician assistant positions have popped up recently to fill the void, but there are still not enough doctors.

  4. The American Medical Association's effectiveness in regulating government licensing criteria is why we must off-shore any medical schools and encourage waves of immigrant physicians. Without the government-sanctioned monopoly that the practice of medicine has become, private medical schools, such as those founded by Robert Ross, would be unnecessary.