Kaiser Permanente, the California-based managed-care monolith, is in the initial stages of building its own medical school from scratch with the goal of overhauling the way the next generation of physicians is trained.
The healthcare giant also hopes to draw from a more diverse pool of aspiring medical students who will be indoctrinated in its integrated care model from the start.
It's an ambitious undertaking. The new campus will be based in Southern California and enroll between 40 and 50 students by fall 2019 once a dean and faculty are hired.
The new school could be viewed as a blueprint for other large health providers intrigued by the idea of customizing a curriculum and employing new technologies and care practices in their own operational image, while simultaneously creating a pipeline of new physicians for their hospitals and medical centers.
That also means training and teaching bright-eyed medical students to be aware of and consider cost as a key component in the way they treat patients.
"This could be a lab for the future," said Paul Keckley, managing director of the Navigant Center for Healthcare Research and Policy Analysis. "Kaiser occupies a unique perch in healthcare. They operate in a system where they are constantly finding ways to reduce costs as part of their mission and that's unique. Most doctors have practiced in a model where managing costs isn't part of the mission."
Kaiser officials didn't detail exactly how much the new medical school will cost, saying only that it will be a not-for-profit charitable organization with the expectation that a portion of the investment will be recovered over time through tuition.
"The school is an upstream investment to improve the broader health care system and support healthy communities and healthy people," a Kaiser official told Healthline. "It will add diverse, culturally competent, community-focused physician leaders into the medical workforce, which will expand access to services, promote health equity, and improve the health of the communities we serve."
Changing the Medical School Mantra
Kaiser is uniquely motivated to give the school plan a shot and it potentially has the resources to do it.
The healthcare company had revenue of more than $56 billion last year. An operating income just north of $3 billion supports nearly 10 million members, 38 medical centers, and 620 medical offices.
"I think it's a step in the right direction," Kurt Mosley, vice president of strategic alliance at Merritt Hawkins, a Texas-based physician-recruiting firm, told Healthline. "Kaiser is basically an accountable care organization on steroids. The good news is these students will be trained in what people believe the future of healthcare will be. They'll learn in a team-based environment working with nurse practitioners, physician assistants, and pharmacists from the beginning.”
"Most doctors are and have been trained independently and that's how they've practiced for years," he said. "What Kaiser is saying by training new doctors in its delivery system and acknowledging that one doctor can't do it all by his or herself, is that the focus goes from volume to value. That's the pillar that Obamacare counts on … being accountable for patient satisfaction and wellness. It's about the most effective and efficient way to treat the patient rather than just treating the disease or the condition."
Kaiser's plan to create and develop an entirely new kind of medical school is hardly a panacea for what's projected to be a serious physician shortfall in the not-too-distant future. The Association of American Medical Colleges (AAMC) in March predicted the U.S. will need of as many as 90,000 doctors by 2025. The projection is based on a combination of factors including aging baby boomers, a sharp spike in chronic diseases such as diabetes, and the steady retirement of practicing physicians. On top of that, even more people will be insured and looking for care as a result of the Affordable Care Act.
Dollars and Sense
While there are now 145 accredited medical schools in the United States — an all-time high with more on the way — the AAMC said this new supply of doctors won't be enough to meet the expected demand. To get more doctors, you not only need more medical students, but more residents — and that costs money.
The AAMC earlier this year asked Congress to increase the federal cap on slots for medical residents at teaching hospitals by at least 3,000 residents per year for the next decade. That would amount to roughly $1.2 billion in additional Medicare expenditures — $40,000 of the roughly $150,000 a year it costs to train a resident.
Today there are close to 29,000 residents in training at these hospitals. This year more than 52,000 would-be doctors applied to medical school, another all-time record, according to Mosley.
The math is simple. Without a dramatic and swift increase in the number of residency openings at teaching hospitals, more medical schools and med students won't matter if students can't get the training they need to work in the hospitals and clinics where they're needed.
"A way to look at it is that medical students are oil and residencies are refineries," Mosley said. "Residency programs have been capped since 1997 and Medicare spending has been capped. It's great to have more students and I think (Kaiser's new medical school) is a good idea. But if we don't increase residencies, it won't help."