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
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