Numlock Sunday: Victoria Knight on the rise of the for-profit med school

By Walt Hickey

Welcome to the Numlock Sunday edition.

This week, I spoke to Victoria Knight who wrote “Once Banned, For-Profit Medical Schools Are On The Rise Again In The U.S.” for Kaiser Health News. Here's what I wrote about it:

A century ago, the United States banned for-profit medical schools because at the time they were generating a bunch of quacks. In the 1970s, though, for-profit med schools cropped up in the Caribbean and, following a 1996 lawsuit, postsecondary schools could become for profit in the states. The first for-profit med school opened up in 2008, and since 2015, five more have opened with another two on the way. Rocky Vista, the only for-profit medical school that lists an average median debt on the government’s College Scorecard, said the average median amount of program debt for their grads is $294,780, well ahead of the $201,164 for graduates of private nonprofit med schools and $177,324 for public medical schools. I mean, what’s the worst possible thing that could happen when Americans privatize a successful and less expensive public nonprofit medical system?

We spoke about the history of medical schools in the United States, why schools in the for-profit model began to emerge several years ago, and what that means for medical training across the country.

Knight can be found at Kaiser Health News and on Twitter. KHN also has lots of interesting subject matter specific newsletters if this topic is of particular interest.

This interview has been condensed and edited.

Thank you so much for joining me, Victoria. Can you talk a little bit about your work and what you cover in general?

I am a reporter at Kaiser Health News. I've been there about two and a half years full time, I started as an intern and then they hired me. So, because I'm still an early career reporter, I cover the gamut of things, so a mix of all kinds of healthcare, health policy things, anything. We're always looking for stories about how does health policy affect real people, that's probably the real core of what I cover. And then, I'm also in charge of our partnership with PolitiFact, they're a fact checking news organization and so I'm in charge of doing our healthcare fact checks. Often, it's something that a politician or pundit says about healthcare or COVID, and I'm in charge of fact checking to see if it's accurate or not.

Oh, so I imagine that it's been a rather quiet year, right?

Last year was pretty wild, to be honest. It's crazy normally, but then COVID on top of it, and health policy is big during presidential elections as well. I was covering both of those things. The RNC, DNC debates, all of it. Yeah, it was fun, but it was crazy.

You published a really great deep dive into med schools. And you wrote about how for quite some time it was not allowable to operate a for-profit medical school, then some things started changing and now there's a couple of them. Why was medical school considered different for a long time compared to other colleges and what evolved?

Medical schools, when they started proliferating in the early 1900s, it basically was whoever wanted to open a medical school could open a medical school. All they needed to do was have some people who were willing to be professors and find some students that were willing to pay for it. There was no standardization. There was no accreditation. What started happening was a lot of medical schools started opening because these people saw an opportunity to make money from students.

Eventually, the Carnegie Foundation did a report and they looked at how there's just too many doctors, and a lot of them were just doing really bad work. They were like, “this is a real problem in the U.S.” That made a lot of states reconsider, and decide to basically create accreditation agencies. Eventually, they created medical standards that every medical school had to implement and accreditation that every school had to do. Once that happened, then for-profits just went away. They were essentially banned. And then, they didn't reappear until 2008 when a for-profit medical school opened in Colorado.

A lot of your story goes into the re-emergence of some of these. Obviously, a business model emerges and people start copying it, and now we're up to a half dozen with a few more planned to come out. Is that about right?

One opened in 2008, and then another one didn't open until 2015. Since then, since 2015, five more opened and there's one that's planning to open this fall. Then there's one that just got approved to begin the accreditation process in Montana, which was really the focus of my story — one of those new ones in Montana.

You wrote a little bit about some of the murky management of these organizations, about nested LLCs and whatnot. You have a whole section about the pros and cons of for-profit medical schools. Do you want to explore some of those?

Some of the pros are that there might be some places where it's hard to get interest in building a medical school. With a for-profit, you have investors that are the ones that are willing to back up the school and invest in that initial money needed to open a school, which is a lot of money. That could be the benefit of it. I did talk to an alumnus of one of the schools who said he felt the school admitted more non-traditional students — one of the for-profits he went to — so, I thought that was interesting. But a lot of people have issues with the for-profit model, and the reasons for that are there's just a real lack of transparency with the financials. Most medical schools, they put up a financial report on their website and it shows how much tuition comes in, how much they get in grants and all that kind of stuff, and then it also shows how much the school spends.

If a student was curious, they could go and see, okay, this is what's happening with my money that I'm paying to the school. With for-profits, that does not exist. There are no financial reports. I asked each of the schools if they would share their financial reports with me and most responded, "decline to comment." I got nothing from that process. But, yeah, it's a real lack of transparency and it's also very murky. For some, we were able to identify who the private equity firm was that owned the schools, but for others, it's not super clear. It's not filled out on the website. Really, at the end of the day, students are going to a school where they don't have the full knowledge of who's funding it and where their money is going. And to a lot of higher education experts, that's a problem.

Obviously, we're looking at an intersection of two very important topics in America these days, which are the spiraling cost of healthcare and the spiraling burden of student debt. You really plumbed the numbers on this and the for-profits don't seem to come out much in credit.

We looked at a couple of different numbers. If you look at just the tuition cost, the schools are pretty comparable to other private non-profit schools, so there doesn't seem to be a huge difference. One thing that we did find that there was a difference with was the amount of debt that students might graduate with. Like I said, a lot of these schools have really opened recently, so there's not a ton of data, so that might be partly why we can't make grand assessments of these kinds of things, because they're still waiting on a lot of that data to come in.

If you look at the average median amount of program debt from the one for-profit medical school for which that data is available, that debt is $294,780. If you compare that to the average median program debt for private nonprofit medical schools, that is $201,164. So, that's almost a $100,000 difference, which is really large. The reason for that is these for-profit schools, until they are accredited, students have to take out private loans, which often have higher interest rates.

It was interesting to me because, again, like you wrote, there are four states that don't have med schools in them and one of them is Montana, and that is where they're attempting to open one. It's this satellite campus of Rocky Vista. You cover a lot about healthcare inequity, and my question is this: is the lack of a presence of a medical school at all, is that depriving folks? Do you actually need a medical school in a state in order to sustain a successful medical system?

That's an interesting question. There is a program run through the University of Washington that has been in existence for a while, and it allows students from Montana to go to medical school through the University of Washington, but still stay in Montana. So, until these two medical schools have come to Montana, that is how a lot of Montana students have chosen to get medical training. That program is already in existence, and there has been some push back actually from that program about these medical schools and how the program might be affected by the medical schools. There certainly is training already happening in Montana. I think that it's unclear to me exactly how the medical schools will affect that and affect the greater system of rural healthcare. Obviously, yes, Montana has doctors and health systems, and they're still functioning as a state.

I have heard from some people that, yeah, of course, more doctors are needed. More doctors are needed in rural areas. That's a problem across the U.S., not just in Montana. I think if these medical schools can provide that, then that they may be helping to solve a problem. But, there's also the question that med students don't always stay in the state that they go to medical school in. You have to apply to residency. Residency is a whole process, and you might get a residency somewhere else. They might not even stay in Montana at the end of the day. I think there's still a lot up in the air to be seen of the effects of these medical schools in Montana.

Is there anything else on this story you encountered as you were reporting it that you thought was interesting that you wanted to make sure we chatted about?

I guess I will say one argument that the for-profits also told me, and that one of the guys that's in charge of the accreditation process for medical schools told me, was that these schools are still going through the accreditation process like anyone else. So, if they can make it through the accreditation process, then they're just as good as any other medical school. I do want to say they're obviously making it through the accreditation process, so that is still happening. But the lack of transparency, as you said, the murky ownership, the lack of knowing how much student's tuition costs are profiting investors, those are the real issues with these schools.

Victoria, you work for Kaiser Health News. You can be found in a couple different places because Kaiser Health does a cool thing where you can republish a lot of stuff. Where can folks find you? Where can folks see what you're up to?

People can definitely find me on Twitter. I'm @victoriaregisk. I'm always looking for story ideas. I'm really focused on health policy and how that affects real people in the world. I'm happy for people that have story ideas to email me at Victoriak@kff.org. I am also always looking for things to fact check, what is true and what is not. That's what I'm working on right now. I'm fact checking Rand Paul, it's always an adventure. Also, we just started a newsletter for Montana specific health stories.


If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.

Thank you so much for becoming a paid subscriber!

Send links to me on Twitter at @WaltHickey or email me with numbers, tips, or feedback at walt@numlock.news