Analyzing the cost of medical education as a component to understanding education value

Published 2021/05/27


What is the cost of medical education?  In 2016, the average yearly tuition for students was $36,755 for public US medical schools  and $60,474 for private US medical schools1 , and the average indebtedness for all medical graduates was $189,165.3  But tuition is only part of the picture. The total annual financial cost of medical student education  is currently estimated to be between $90,000-$118,000 per student or between 360,000 to 472,000 per graduate.4 Are these costs justified?

To answer this question, we turned to recent developments in healthcare delivery known as ‘value-driven outcomes’.  In his seminal paper, “What is Value in Health Care”, Michael Porter addresses the relationship between cost and quality of outcomes by defining value in health care as desired patient outcomes divided by the cost to achieve that outcome.This framework is now well established as a way to consider the relationship between cost and quality. In 2012, the University of Utah Health Care (UUHC) developed the value-driven outcomes (VDO) model and tested it’s application in numerous setting. The key strategy of VDO was to develop a tool that “allows clinicians and managers to analyze actual system costs and outcomes at the level of individual encounters and by department, physician, diagnosis, and procedure.”6  If, for example, the data show that different surgeons incur different costs in performing a standard procedure, then meaningful steps can be taken to understand the source of the variability and reduce costs.

What if the thinking behind the UUHC VDO tool, which aimed to better understand costs in relation to quality of clinical care, could be adapted to better understand the cost of medical education in relation to the quality of that education, and consequently promote a process of better aligning costs with quality?


To explore this question, we decided to undertake the challenge of translating the clinically-focused VDO principles to medical education. In Phase One of the work, the focus was to understand the cost of medical education at our own institution. In Phase Two, the focus was to understand the desired outcomes (i.e. quality) by stakeholders. In Phase Three, the work will be to integrate the cost and quality components to propose relevant measures of value for medical education. This report describes Phase One relating to costs and builds on previous reports of medical education cost in the literature.

The cost analysis targeted the medical student education program for the academic year 2015-2016 ( Table 1).  The major categories of cost were divided into two domains: Facility Costs and Professional Costs. These two domains were consistent with those of the VDO model.  Within each of the two domains, major categories and detailed subcategories of cost ( Table 1) were identified.

The project was reviewed by the University of Utah Institutional Review Board (IRB), deemed not to meet the definition of human subjects research and was therefore exempt from IRB oversight. This project was funded through support from an Accelerating Change in Medical Education Grant from the American Medical Association.


The UUSOM is the only AMC in Utah and is a state-funded AMC with four major affiliated teaching hospitals. During the 2015-2016 academic year, 371 unique faculty interfaced with the students in large classroom, small group and lab-based instruction over the 4-year program.  Approximately 700 faculty were involved in clinical supervision of students in the clerkship-based years of the program. There were 415 students enrolled in the UUSOM during 2015-2016.

The integrated pre-clerkship curriculum included seven foundational science courses and longitudinal courses on clinical reasoning/skills and medical humanities ( Figure 1).  A large portion of the pre-clerkship curriculum was delivered in a $40 million-dollar education building constructed in 2005, which included an 18-room clinical skills center.  The program utilized the University’s College of Nursing state-of-the-art, high fidelity simulation center for selected aspects of the curriculum. 

The third year of the program consisted of 7 required core clerkships (internal medicine, pediatrics, obstetrics/gynecology, surgery, neurology, psychiatry, family medicine; 4-8 weeks each). Every clerkship included an objective structured clinical exam (OSCE).  A required, summative end-of-year-three, 8-station OSCE was modeled after the USMLE Step 2 CS examination. Fourth year students were required to complete two, 4-week courses (critical care, core sub-internship), and 24 elective credits (minimum: 12 clinical).  In 2015-2016 students were also required to complete a scholarly project, community service, and engage in five half-to-full day simulation-based interprofessional education courses with students from four health professions colleges.

Data Collection

Facility Costs: Facility costs fell into 6 broad categories: Staff, Building/Facilities/Services, Information technology, Simulation, Materials and Other ( Table 1). There were 64 different major elements of facility costs identified requiring contact with 18 individuals to complete data collection. All cost elements were determined. A single staff member in the UUSOM Dean’s Office undertook the compilation of facility cost data.

Professional costs: Professional costs were all faculty-related costs categorized as: Administrative, Classroom teaching, Clinical teaching, and Mentoring/Advising ( Table 1).   

  • Classroom teaching. All classroom-based teaching time at UUSOM is cataloged in a central database, housed in the UUSOM Dean’s Office of Finance.  Teaching hours of all faculty who teach in the classroom setting, regardless of number of students present, are captured and validated for accuracy at the end of every academic year at the department level. Cost associated with those hours were derived based upon median salary and benefits data for MD and PhD faculty who taught in the program in 2015-2016. The median salary plus benefits for MD and PhD faculty who taught in the curriculum was $316,483 and $138,886, respectively ( Table 2).  Total classroom teaching costs assumed variable degrees of preparation time based on the type of learning session (3 hours per 1 hour of large classroom instruction, 0.5 hours per hour of small group instruction, and 1 hour per hour of laboratory).  In 2015-2016, 67% of instruction was delivered by MD faculty and 33% by PhD faculty.
  • To derive clinical teaching costs, assumptions about clinical teaching time were made based upon the medical education literature. The range of time faculty spent teaching individual students in the outpatient environment was estimated at 0.5-0.8 hours per half day of clinic.7, 8 The time faculty spend teaching individual students in the inpatient environment was estimated at 1.1 hour per full day of inpatient time.9 To calculate clinical teaching costs, the mean for outpatient teaching time (.65 hour per clinic half day) was used to derive costs for ambulatory experiences in our curriculum. Overall, clinical teaching time was calculated using the number of students in the clerkship years of the curriculum assuming the number of outpatient days and inpatient days for every student was nearly constant according to standard lengths of clerkships and required fourth year courses ( Table 2). Finally, professional costs for clinical teaching of individual students in electives were derived based on minimum fourth year elective requirements for graduation (24 weeks, minimum of 12 clinical weeks).
  • Administrative costs were calculated based on percent effort directed at the medical student program multiplied by faculty annual salary and benefits. Course director costs were based on expected time spent performing course planning and administration and varied based upon the length of the course.


Overall Education Costs

In 2015-2016, the overall cost of the 4-year medical student program was $32.7 million, which amounted to ~$79,000 per student per year, much more than the annual tuition and fees of $36,094 

Facility and professional costs were nearly equal in magnitude ($16.3M vs. $16.4M respectively. The three largest cost-drivers in the analysis were attributed to clinical teaching ($10.0M), building costs ($6.6M) and staff ($4.6M). 

The balance of costs for the pre-clinical curriculum (years 1-2) differed significantly from that of the clinical curriculum (years 3-4):  professional costs related to faculty teaching were 8-fold lower in the pre-clinical curriculum than clinical ($1.24M vs. $9.88M, respectively). Conversely, professional costs related to faculty administration time  were 3-fold greater in the pre-clinical years  compared to the clinical ones ($2,660,079 vs. $882,164, respectively).    

Value-Driven Outcomes Initiative Conceptually, and most importantly, the study afforded us the opportunity to move beyond an estimation of cost to a consideration of how to optimize value (maximizing outcomes for the cost incurred), particularly related to professional costs. In 2018, we replaced our distributed model of education delivery wherein over 500 faculty participated in education (many for only a lecture or two) with little direct association between such involvement and the distribution of funds to their departments, with a Core Educator Model, wherein approximately half that number of faculty each contribute a more substantive amount to education and receive direct financial support for those contributions. The aim of the Core Educator Model is to improve learning outcomes for students by consolidating the delivery of the program to a core group of expert educators who are both compensated and held accountable for their efforts.

Next Steps

The cost analysis at the UUSOM has prompted the redesign of funds flow supporting medical student education and has shifted the focus toward more heavily considering the value of education investments. The years ahead will provide opportunity to investigate the impact of the Core Educator Model on learning outcomes, the ability to deliver a high-quality medical education program, and the professionalization of faculty as educators.

At the 2017 AAMC Annual Meeting, Dr. Marsha Rappley, Chair of the AAMC Board of Directors, directly emphasized that the cost of what we do in education is undermining our ability to improve the health of the nation.10 Understanding costs has not traditionally been considered to be in the purview of educators. This needs to change. As medical educators strive to deliver high-value education, a concern for and an active engagement with the costs of medical education must be a part of the equation.


  1. Tuition and Student Fees Report, 2012-2013 through 2018-2019, Association of American Medical Colleges;
  2. James Rohlfing, Ryan Navarro, Omar Z. Maniya, Byron D. Hughes & Derek K. Rogalsky (2014) Medical student debt and major life choices other than specialty, Medical Education Online, 19:1, DOI: 10.3402/meo.v19.25603
  3. 2017 Education Debt Manager for Graduating Medical School Students, Association of American Medical Colleges,–2017.pdf
  4. Cooke M, Irby DM, O’Brien BC. Educating physicians: a call for reform of medical school and residency: John Wiley & Sons 2010.
  5. Porter ME. What is value in health care? N Engl J Med. 2010;363:2477–81.
  6. Lee VS, Kawamoto K, Hess R, et al. Implementation of a Value-Driven Outcomes Program to Identify High Variability in Clinical Costs and Outcomes and Association With Reduced Cost and Improved Quality. JAMA.2016;316(10):1061–1072. doi:10.1001/jama.2016.12226
  7. Ricer RE, Van Horne A, Filak AT. Costs of preceptors’ time spent teaching during a third-year family medicine outpatient rotation. Acad Med. 1997;72(6):547-551.
  8. Abramovitch A, Newman W, Padaliya B, Gill C, Charles PD. The cost of medical education in an ambulatory neurology clinic. J Natl Med Assoc. 2005;97(9):1288-90.
  9. Weinberg E, O’Sullivan P, Boll AG, Nelson TR. The Cost of Third-Year Clerkships at Large Nonuniversity Teaching Hospitals. JAMA. 1994;272(9):669–673. doi:10.1001/jama.1994.03520090033015
  10. Rappley, MD. Leadership Plenary Address.  Learn Serve Lead, AAMC Annual Meeting, Boston, Mass.  Nov 5, 2017.

Table 1

Lamb et al. Table 1
Table 1: Total Cost of Undergraduate Medical Education (Click to enlarge Table 1)

Figure 1

Lamb, et al. Figure 1
Figure 1 (Click to enlarge Figure 1)

Table 2

Table 2: Classroom and Clinical Teaching Costs
Table 2: Classroom and Clinical Teaching Costs (Click to enlarge Table 2)

Return to Table of Contents:

Analyzing the cost of medical education as a component to understanding education value by Sara Lamb, MD, Tony Tsai, MBA, Danielle Roussel, MD & Janet E. Lindsley, PhD