Research blog 10

Robert Dunn

Class 201:10 F13

Friday, December 13, 2013

Professor Goeller

The Globalization of Privatization:

The next step for American for-profits

Abstract

The following analytic research paper outlines the American for-profits of higher education’s most recent growth in the graduate medical education. The paper identifies how the Caribbean’s Accreditation Authority for Education in Medicine and other Health Professions is really nothing else than a marketing branch of the Caribbean Community Secretariat and examine some of the practices of two schools associated with the organization.Then explain how and why the demand for physicians is expected to increase and the federal governments reasoning on expanding the international medical graduates. Addresses on why for-profits and foreign accreditation agencies have not earned the opportunity the Department of Education has given them and presents two serious problems moving forward and how the Department of Education presented invalid evidence to support their tactics in privatization. American for-profits negative impacts on society will grow as the for-profits grow in the graduate medical school market of the Caribbean.

Introduction

Today the task of supplying quality education is as difficult as ever. The United States government’s public education system seems to be exposed and weak in the very field it helped create. The new challenges that face education today are viewed as a burden to the public education system at all levels; and where public education see a liability the private education machine sees an opportunity. Private education has a tradition of higher education excellence that few opinionates of private education can argue. The eight Ivy League schools are all private and count for seven of the ten colleges charted before the American Revolution. These private schools produced fourteen presidents including Clinton, W. Bush, and Obama. Under these three presidents the spread of private education is often referred to as privatization, and however prestige the private universities these presidents attended; the new private for-profit schools encouraged by their policies do not hold the same values associated with traditional American education.  The for-profits corruption is known to the government, but the truth is while the Senate Committee on Health, Education, Labor, and Pensions held much publicized hearings on the damage for-profits instilled on the American tax payer and students, the Department of Education quietly made plans to expand the for-profit reach into graduate medical education. Despite the abuse shown by even the biggest new for-profit Apollo Group, the Department is encouraging the opening of for-profit medical schools in the Caribbean.

            By far the worst of these for-profit Caribbean medical schools have associations with the Caribbean Community Secretariat (CARICOM) Single Market and Economy. CARICOM has fifteen member states and five CARICOM associate members (all are Caribbean nations). The objective of “CARICOM Single Market and Economy is intended to benefit the people of the Region by providing more and better opportunities to produce and sell our goods and services and to attract investment.” (caricom.org). In 2003 CARICOM established the Caribbean Accreditation Authority for Education in Medicine and other Health Professions (CAAM_HP) and CARICOM has been successful in using this ‘accreditation authority’ to attract  foreign investments. There are 14 assessed programs on the CAAM-HP website, most of which are in reality American for-profit companies and most where built no earlier than the Clinton administration. Like many American for-profit companies these graduate medical schools found that outsourcing capital for cheaper labor leads to higher returns. These schools keep with the dishonest for-profit model of students paying more for an inferior product. Chris Parker describes for-profits tuition rates in For-Profit Colleges Only a Con Man Could Love;

Although tuition rates can run as high as those at America’s most esteemed universities, the education is generally substandard. In the end, most kids wind up walking away with a questionable degree bought at top dollar-and a mountain of debt to accompany it. (p2)

The American University of the Caribbean school of Medicine (AUC) owners is Ross University School of Medicine (which is CARICOM accredited and owned by Devy Inc.) and Devy Inc. (one of the largest leaders of the American for-profit higher education market). AUC’s first year tuition of a full time student is $56,925 (including summer, aucmed.edu), and Harvard’s first year tuition is $52,100 (hms.harvad.edu). St James School of Medicine (owned by a Chicago group and CARICOM accredited) tuition is comparable to out of state residence tuition at the University of California-San Diego. While UCSD is considered an outstanding medical school with an average MCAT score of 33.6 (som.ucsd.edu), St James School of Medicine admissions website stats “No MCAT required”.  

            These schools have been established due to the definite demand for new doctors in America. Estimates for the unemployment rate for physicians and surgeons often fall less than one.  Milton Friedman and Edmund Phillips both won the Noble prize in economics for their work on the natural rate of unemployment. If frictional and structural unemployment hold true, then such a low unemployment rate shows a significant shortage of workers in the field. The United States Department of Labor Bureau of Labor Statistics agrees with the high demand. Their official statement on the job outlook of physicians and surgeons is

Employment of physicians and surgeons is expected to grow by 24 percent from 2010 to 2020, faster than the average for all occupations. Job growth will occur because of the continued expansion of healthcare-related industries. The growing and aging population is expected to drive overall growth in the demand for physician services as consumers continue to seek high levels of care that uses the latest technologies, diagnostic tests, and therapies. Many medical schools are increasing their enrollments based on perceived higher demand for physicians.

Another reason for the higher demands for physicians is the recently enacted Affordable Care Act. Millions of Americans that had no health insurance will have access to healthcare as well as insurance companies’ inability to put life caps on customers or deny pre-existing illnesses.

            As a result the federal government has taken steps to produce more physicians and surgeons. The National Committee on Foreign Medical Education and Accreditation sent a report to the US Congress in 2009 which stated that the only three freestanding foreign medical schools with mostly U.S enrollment (AUC, Ross University, St. George’s University School of Medicine-CARICOM accredited) that were eligible for federal aid FFEL program in 2007-2008 received $293,198,009. The federal government read this report has chosen to expand federal funds to foreign medical schools as of 2010. R3 Education is a Massachusetts based group that currently has three operating Caribbean medical schools that caters to United States, Canadian, and British students.  In 2009, R3 Educational wrote a letter to the Department of Education. The author is unknown as his or her name was censored and the author was most likely part of a lobbying effort.

To remedy this shortage, CGME [Council on Graduate Medical Education] recognized that increasing enrollments in U.S. medical schools would be insufficient. An increase in medical schools and in the number of international medical graduates practicing in the United States is therefore necessary to meet this growing demand for physicians(3)

There is the thought to which foreign medical schools place their importance. R3 Education argues that in order to meet the new demand for physicians America has to expand into new markets. In this sense the logic behind the argument is sound. With American based medical schools’ enrollments at their potential limits; the obvious solution is to build new graduate medical schools. In 2007 as much as 26% of the total United States’ physician force was international medical graduates (AMA-IMG, January 2010); therefore an increase in the number of international medical graduates is in fact necessary to keep the status quo. However, international medical graduates are not always international physicians. The Foundation for Advancement of International Medical Education and Research (FAIMER) was established in 2000 and concentrates its efforts in developing medical research in third world areas. According to their research 37,127 of the 187,987 international medical graduates (including resident) practicing in the United States as of 2009 were American citizens before their enrollment in graduate medical school. The nations who citizens where not in the top ten international medical graduates and are in the top ten supplies of international medical graduates are Mexico (10,843), Dominican Republic (6,6259), Grenada (5,682; Grenada had to evacuate St. George’s University student’s to Long Island, New York due to the United States’ Operation Urgent Fury. Today, many for-profit Caribbean schools include evacuation insurance in the tuition bill) Dominica (4,748), Netherland Antilles (4,084). A longitudinal study was done van Zanten and Boulet on Caribbean schools between 2000 and 2009 found 56 operating medical schools with approximately 10 new schools being built in 2009. Between 2000 and 2009 there was a 265% growth rate in international medical school graduates from this region of the world. An interesting follow up study should be done on the growth after the 2010 amendment allowing more foreign institution to be eligible for Title IV founding.

            The Department of Education Office of Federal Student Aid published Foreign Schools: Institutional Eligibility in which the definition of “Foreign Institution” (34 C.F.R. § 600.52) lays out exactly what qualifies for the Title IV founding. The definition is clear that a foreign institution cannot be in a state. However, it makes no mention on the percent of students that are native to the country where the school is located compared to United States citizens attending the program.  After completion of the program, the American citizen is then considered an international medical graduate. This detail along with exemptions for medical schools in the definition of foreign institution is how for-profit groups such as R3 Education and Devy Inc. are able to open their medical schools in the Caribbean instead of in the United States. (In fact, Devy Inc. purchased the American University of the Caribbean: School of Medicine after the department announced that the Title IV founding programs would be expanded to foreign medical schools; showing the value for-profits place on accessibility to Title IV founds.) The dominate strategy these American for-profits employ is opening or buying a school in a Caribbean nation that is open and willing to expand commerce; attain accreditation from the local accrediting agency; become Title IV eligible; and finally recruit American citizens to fill the medical school’s enrollment.

            Borrowing from Patrick Henry “I know of no way of judging the future but by the past”. And judging by past, I wish to know what there has been in the conduct of the American higher education for-profit corporations in the last twenty years to justify the trust with which the federal government and therefore the American people have granted them. After a decade of repeated offensives by numerous “colleges” the federal government has rationalized not only the expansion of the American for-profits of higher education into educating physicians; but agreed to sending these students by the masses out of our regulators’ jurisdiction to foreign lands that have little or no history of any kind of higher education.  The assessment that had policy makers extend federal funding for this business venture could not have included American for-profit graduation rates, responsible spending of tax payer money, or majority student success. Sixty three percent of students attempting to achieve just a two year degree from for-profits left without one. Many students graduate with a degree that do not develop into the value of which for-profits claimed via less than reputable marketing and sales technique; as a result trapping them in student loan debt that can follow a student for life. These aforementioned statements are facts admitted by The United States Senate Committee on Health, Education, Labor, and Pensions in a report titled For Profit Higher Education: The Failure to Safeguard the Federal Investment and Ensure Student Success.

Congress has failed to counterbalance investor demands for increased financial returns with requirements that hold companies accountable to taxpayers for providing quality education, support, and outcomes. Federal law and regulations currently do not align the incentives of for-profit colleges so that the colleges succeed financially when students succeed.(p1)

Yet policy makers unquestionably support this market and place an extreme reliance on foreign accreditation agencies.  The fact that if even one of the accrediting agencies in the Caribbean conducts themselves in a harmful manor, then there is a strong possibility American life will be lost. The Department of Education’s National Committee on Foreign Medical Education and Accreditation published Guidelines for Requesting a Comparability Determination.

The purpose of the National Committee on Foreign Medical Education and Accreditation (NCFMEA) is to review the standards used by foreign countries to accredit medical schools and determine whether those standards are comparable to standards used to accredit medical schools in the United States.

“The NCFMEA wishes to make it clear, however, that these are Guidelines.”(1) This statement on page one is made very clear by Section 5 Medical Students where the question of MCATS importance to both the medical schools and the accreditation agency is asked.  Where the American accreditation medical education body places a high importance on MCAT scores, the NCFMEA says Accreditation Commission on Colleges of Medicine (ACCM) is “found to use standards to accredit their medical schools that are comparable to the standards used to accredit medical schools in the United States.” These “findings” cannot be accurate for ACCM in Section 5. ACCM is based in the Republic Of Ireland and is the accrediting body for Devy Inc.’s foreign graduate medical institution AUC which currently has an average MCAT score of 25. This average score of 25 is less than the usual competitive American standard score of 30 and much less than the price level AUC sets their tuition at.  Another fault of the NCFMEA is in their seven step Review Procedures. Not one of the seven steps requires a visit to a medical school or the accreditation bodies approved medical schools. In fact, they found that such visits where not relevant in evaluating foreign medical schools. For a country’s accreditation body to be approved by the NCFMEA they only have to fill out the questionnaire mentioned above. The only evidence presented to the NCFMEA is evidence produced by the very agency they are passing judgment on.

The Department of Education’s way of trusting the graduate medical school accrediting agency in countries such as Dominica, Grenada, Netherlands Antilles, Dominican Republic, and Mexico is irresponsible and reckless. The fact that if even one of the accrediting agencies in the Caribbean conducts themselves in a harmful manor, then there is a strong possibility American life will be lost. Logical convention will point to expand the NCFMEA to have international inspectors. However the enactment of a worldwide American graduate medical school accrediting agency is not feasible. Who finances such an expansion is just one instance where this strategy falls apart. First it is not the American tax payers’ responsibility to finance quality insurance for private international companies. A tax may be levied against international graduate medical schools to finance this expansion. Such a tax would be met with certain resistance. If it did pass, micro-economic analysis would have an equilibrium set where the burden of the tax is shared between the accreditation agency (and therefore the medical schools) and the consumer (the students who a large portion would be receiving federal aid).  Therefore, the American tax payer will finance the expansion indirectly.

 Changing the definition of “Foreign Institutions (34 C.F.R. § 600.52):” is a simple solution to the problem of potential dishonesty among accreditation agencies that the Department of Education does enforce. Having a ratio of native students and American students for all international graduate medical schools in the definition would effectively end federal finical aid growing medical schools in places they have little or no history of higher education i.e. the Caribbean. The theory is if an institution is set to serve the citizens of a nation in a certain field (in this case the medical field), then the citizens of that nation will demand a high quality institution. The accreditation agencies of these nations will be held to a standard of healthcare instead of commerce. This way an American student will still be eligible for federal aid to attend schools such as the University of Melbourne or the University of Oxford; who educate physicians for their respected nations (Australia and Great Britten). However, nations who strive for mostly commerce with their medical schools will be unable to obtain federal aid packages. For federal DIRECT Loan Program, new schools must have 60% student body that is not eligible for federal aid unless the foreign institute was approved by a State before January 1, 2008. This explains why groups such as Devy Inc. buy old schools instead of build new ones.

            This is in direct response to R3 Education’s lobbying letter to the Department of Education. R3 Education states that at the time of their letter St. Mathew’s University had a student body of 80% United States citizens. R3 Education’s has a 90% U.S. Medical Licensing Examination Step One passing rate. While this is below the U.S. medical schools first time passer rate of 94%, 90% is still well above the average international graduate medical school first step passer rate of 73%. (2008 statistics, usmle.org) Taking the lower level students who did not score well enough on the MCATs for American schools and turning out such a high passer rating is commendable. With such a high passer rating R3 Education does show a commitment to education. However, R3 Education owns just three out of 56 schools, and despite how compelling their letter was; for-profit higher education has proven to Americans that we live in a world of greed and dishonesty. Allowing for Caribbean schools to expand so rapidly and supply federal aid based on one schools success is foolish, especially given the history of ethics in the market. If R3 Education had a plan to educate American students on the American tax payer’s dime, then they should have opened their school in America. Otherwise, the risks involved in financing their schools is too high and should be provide by the same sector of society R3 Education operates in, the private sector.

            There is a basic underlining problem that needs to be addressed. The problem is the economics of privatization.  In this country, the powers that be have chosen privatization over public founding. Privatization is not a knee jerk reaction to an economic recession or lack of state funding. Privatization is a well thought out strategy that takes a student’s willingness to be educated and the federal government’s ability to borrow to make massive financial products. Despite the negative outcomes of for-profits that came where being discovered by the U.S. Senate, the Department of Education still pushed forward the plan of privatization. The punishments on the American people won’t just include student’s inability to pay back student loans due to inferior degrees that came from the dishonesty and unmoral behavior of for-profits in the last ten years. The next ten years of dishonesty and unmoral behavior will lead to higher health care cost, a weakening of the American physician and surgeon work force, and most importantly a loss of lives.

            A higher health care cost result is a definite possibility moving forward. Physicians are so highly educated because there are thousands if not millions of diseases that any one patient can have. A simple fever can be the result of a simple 24 hour bug or can be a symptom Ebola. A physician can misdiagnose a patient and prescribe medicine or suggest surgery or any number of different common physician suggestions that do not cure the patient. Substandard medical education can definitely affect cost in this way. Another way is mal-practice. Mal-practice insurance is already a huge cost in the medical field. The NCFMEA reported to the U.S. Congress in RECOMMENDING INSTITUTIONAL ELIGIBILITY CRITERIA FOR PARTICIPATION BY CERTAIN FOREIGN MEDICAL SCHOOLS IN THE FEDERAL FAMILY EDUCATION LOAN PROGRAM

·        A total of 48,554 IMGs from the 1992 to 2007 classes are currently licensed by an SMB.

o   Of the 48,554, SMBs took disciplinary action against the licenses of 518, or 1.1 percent.

·        A total of 243,565 U.S./Canadian graduates from the 1992 to 2007 classes are currently licensed by an SMB.

o   Of the 243,565, SMBs took disciplinary action against the licenses of 3,178, or 1.3 percent.

Year-over-year comparisons of the disciplinary data (particularly for the years 1997 through 2007) show only negligible differences between IMGs and US/Canadian medical school graduates. Therefore, the NCFMEA does not offer a recommended level of performance in this

Area (p25)

SMB means state medical board. A vast number of disciplinary actions are a result of mal-practice. These numbers are irrelevant when taking about for-profit Caribbean schools. To be licensed by an SMB an international medical graduate needs to complete between 3-8 years of residency. The last year used in the NCFMEA data is 2007, therefore the latest class of students possible would be the class of 2000. As stated earlier in this paper, Zanten and Boulet found that there was a 265% growth between 2000 and 2009 in Caribbean international medical graduates with ten more schools in development in 2009. Therefore the recent expansion of Caribbean medical schools is not accounted for in the NCFMEA data. Instead, the international medical graduates they reported on where mostly comprised of graduates who migrated to America for higher physician wages and where educated in schools that where accredited by agencies meant to supply the nation where the school was located. An easy prediction to make is that as a time moves forward and these American Caribbean students enter the field the disciplinary actions taken by SMBs will no longer be “negligible”.

            The weakening of the American physician work force is another easy prediction. The most obvious weakening of the work force accrues because the quality of doctors is lower. America has one of the strongest most intelligent physician work forces in the world, and adding substandard international medical graduates will only weaken the field. Another less obvious weakening factor occurs in the long run. As the aging population dies and the population either becomes younger or more balanced as predicted by the economics of population, we will need fewer physicians in the field. However successful for-profits grow; contracting is not a method associated with for-profits. These Caribbean for-profits will continue to grow when the current demand for physicians is met, then grow some more. The unemployment rate will rise and rise, until one day unemployment among doctors is high and doctors will be willing to work for lower wages. Much like the modern day law schools whose expansion over the last quarter century over saturated the market to the point now where even graduate lawyers from Ivy League schools have a hard time filling jobs. However, unlike American lawyers, a physician’s education is practical all over the globe; and as America pays their physicians lower wages the top physicians will leave the field to find higher pay elsewhere. These Caribbean medical schools can start a national brain-draining in the medical field.

            In conclusion, the Department of Education is taking a road that will not lead to future success in the American physician and surgeon work force. As American for-profits of higher education stood trail for unlawful acts and was the subject of many hearings discussing for-profits negative impacts on American society; the Department of Education planed and has expanded for-profits role in international medical graduates. While no regulations has been added at the federal level to prevent previous injustices executed by for-profits, the Department of Education decided to place enormous amount of trust on American  for-profits operating in the Caribbean and foreign accreditation agencies. These accreditation agencies have little or no history of educating their own nation’s physicians and surgeons but the NCFMEA has decided that these agencies are acceptable; even though no American federal regulator is required to conduct on site visits. These Caribbean medical schools will increase healthcare cost and weaken the workforce in both the short and long run. The best solution to this problem is for the Department of Education to realize that private profits are not more important than strong physicians and surgeons.

           

Work Cited

International Medical Graduates in American Medicine. America: AMA_IMG, Jan. 2010. PDF.

Parker, Chris. For-Profit Colleges Only a Con Man Could Love Barbarians in the Ivory Tower. Digital image. Sakai.rutgers.edu. Rutgers, 22 Jan. 2013. Web. Nov. 2013. <https://sakai.rutgers.edu/access/content/group/af652d16-bca1-49fd-96a7-b4ff81bc298e/Course%20Reading%20-%20Supplements/For-Profit_Colleges_Chris_Parker.pdf>.

"Proposed Negotied Rulemaking on Foreign Schools." Letter to Wendy Macias. 22 June 2009. MS. N.p.

United States of America. The Department of Education. The National Committee On Foreign Medical Education and Accreditation. Recommending Institutional Eligibility Criteria for Participation by Certain Foreign Medical Schools in the Federal Family Education Loan Program. N.p.: n.p., 2009. Print.

"United States Physician Workforce Issues." FAIMER. N.p., n.d. Web. 12 Nov. 2013. <http://www.faimer.org/research/workforce.html>.

United States of America. The Department of Education. Federal Student Aid. Foreign Schools: Institutional Eligibility. N.p.: n.p., n.d. Print.

United States. Cong. Committee on Foreign Medical Education and Accreditation Recommending. 111th Cong. Cong. Rept. N.p.: n.p., n.d. Print.

United States. Cong. Senate. US Senate Committee on Health, Education, Labor and Pensions. FOR PROFIT HIGHER EDUCATION: The Failure to Safeguard the Federal Investment and Ensure Student Success Prepared by the COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS UNITED STATES SENATE. 112 Cong. S. Rept. Vol. Volume 1. N.p.: n.p., n.d. Print.

Van Zanten, M., and JR Boulet. "Medical Education in the Caribbean: A Longitudinal Study of United States Medical Licensing Examination Performance, 2000-2009." Academic Medicine: Jornal of the Association of American Medical Colleges (2011): n. pag. Premed.gov. Web. 1 Nov. 2013. <http://www.ncbi.nlm.nih.gov/pubmed/21169783>.