Association of Academic Health 

Centers

Atlanta, Georgia 

September 2015

The Politics of Healthcare

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Offshore Medical Schools Buy Clinical 

Clerkships in US Hospitals to the 

Detriment of US Medical Schools: The 

Problem and Its Solutions

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Abraham Flexner
Report on Medical Education in 

the United States and Canada, 

1910

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1. Attacked for-profit medical schools

2. Called for elevated admissions standards

3. Called for a scientifically based medical 

school curriculum

4. Called for full-time faculty

5. Called for the association of medical 

schools with universities and teaching 

hospitals

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Theodore Roosevelt

William Howard Taft

Woodrow

Wilson
The Progressive Era
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"Somewhere between 1910 and 1912 in this 

country, a random patient, with a random 

disease, consulting a doctor chosen at random 

had, for the first time in the history of 

mankind, a better than fifty-fifty chance of

benefiting from the encounter."

Lawrence Joseph Henderson MD (1878-1942)
The Flexner Report mattered because 

it arrived at a time in history when, for 

the first time, medicine mattered.
Contiguous with the issuing of the 

report, proprietary medical education 

in the US and Canada collapsed. It 

now, however, has re-emerged in the 

form of offshore medical schools, 

largely on Caribbean islands.
The Economic Model of For-Profit 

Medical Education
Mean MCAT

US matriculants at US schools 31

Ross and American University of the Caribbean 25

St. George's 27

Many for-profit schools require neither the MCAT or a 

BS degree

It will take "5-10 minutes to fill out the short 

application form. Once you complete the form an 

admission advisor...will guide you through the

rest of the process."
Admit two to three entering classes per year of as 

many as 300 students each

Excluding dual-degree students the four-year MD 

graduation rate:

Most US schools: 90-95%

"The best" off-shore schools:

Ross 66%

American University of the Caribbean 67%

St. George's 80%

From 1998 to 2008 US citizens borrowed 

>$1.3 billion in the Federal Family 

Education Loan (FFEL) program to attend 

three of the for-profit

schools.

For-profit schools that do not have access to 

US federal loans use a loophole to get access 

to the money by having students enroll in an 

online Master's program at a US university 

and, thus, collect the loans.
In view of the attrition rate, the graduation 

rates, and the pass rates, the probability of an 

entering student ever entering the GME 

stream in the US is

80% x 60% x 50% = approximately 25%
The DeVry Corporation, traded on the US stock exchange, 

owns Ross University and the American University of the 

Caribbean. Their financial data is a matter of public record.

Annual income $1.9 billion

"Increases in student enrollments and tuition produced 

higher revenues and operating income...[most students] were 

denied admission or wait-listed for US schools...[and are 

targeted by] direct mail campaigns... radio 

advertisements...and print ads in major magazines and

newspapers...management believes that [tuition] rates will 

continue to increase...Ross University faculty members are not 

tenured."
Mean student loan debt

US students for college + medical 

school $170,000

St. George's $220,000

Ross $191,500

American University of the Caribbean 

$253,072
The model:

Have large entering classes, collect large 

tuition fees fueled by federally 

supported loans, and use some of the 

money to buy clinical clerkships in the 

US for $400-$1000/student/week
Kern Medical Center

Bakersfield CA

Ross signed a deal to buy 100 slots for 

medical student rotations per year for 

ten years for $35 million
Health and Hospitals Corporation of the 

City of New York

New York NY

St. George's signed a deal to purchase 600 

slots for medical student rotations per year for 

ten years for $100 million

[The HHC Board member who proposed and 

promoted the arrangement was later discovered 

by the NY Times to be a St. George's graduate 

and a St. George's Dean.]
Nassau University Hospital Long Island NY

American University of the Caribbean 

signed a deal to purchase 64 slots for 

medical student rotations for ten years for 

$19 million
"Unless you're going to pay us, get your 

students out of my hospital."

New York Institute College of Osteopathic 

Medicine

Stony Brook University

New York Medical College
Accreditation Standards
Liaison Committee on Medical 

Education (LCME)

Commission on Osteopathic College 

Accreditation (COCA)
US Department of Education and the 

National Committee on Foreign Medical

Education and Accreditation (NCFMEA) 

identifies countries which "use standards to 

accredit their medical schools that are 

comparable to the standards used to 

accredit medical schools in the United 

States" to determine eligibility for the 

federal student loan program.
Would anyone deny that there is a 

substantial difference between 

deciding if a country's medical school 

accreditation standards are 

comparable to the those of the US 

and accrediting individual schools?

The Veil of Silence
The Politics of Healthcare

Why is this national disgrace so 

difficult to stop?

US hospitals like the money
Organizations whose dues-paying 

members include hospitals respond to 

the desires of hospitals who like the 

money

Lawyers and lobbyists like being paid 

by for-profit medical schools
Monetization of a Duty

"To hold him who has taught me this 

Art as equal to my parents and to live 

my life in partnership with him...and 

to teach them this Art – if they desire 

to learn it - without fee and 

covenant....."
By what authority does a hospital own 

the opportunity for students to learn by 

participating in the care of patients and 

then, in turn, sell it to a corporation?

By what authority does a hospital own 

the instructional aspects of a person's 

illness and its treatment and then sell 

the observation of it to a corporation?

Survey of 137 US Medical Schools

Moderate/high/extremely high 

pressure to provide financial 

compensation incentives for new 

clinical training sites in communitybased settings

MD 67%

DO 93%
What should be done?
1. Support Senate Bill 1374 and House 

Bill 2417, The Foreign Medical School 

Accountability Act
2. Insist that off-shore schools report the 

fraction of their students who take 

USMLE within a defined time frame 

from matriculation, the pass

rates for first-time and repeat test takers, 

and attrition rates
3. Support legislation that only allows 

federal loans for medical education to 

go to LCME and COCA accredited 

schools.
4. Support state action to only permit 

access to clerkships by schools 

accredited by LCME and COCA

6. Don't act like it's not your problem.

"Oh...the New York schools are 

concerned about this. We don't have 

a problem. All of our students have 

clerkships at the hospitals in our 

system. It's not a problem for us."
Thank you