AAMC Reporter: November 2008

A Word from the President: "Navigating Unchartered Waters: The Recession and Academic Medicine"

As President-elect Barack Obama prepares to take office, our nation faces a financial situation unlike any most of us have ever seen. And while we may be starting to climb out of the credit and banking quagmires, most experts agree our country is in a recession and headed for a long, tough economic period. If anything is certain in these uncertain times, it is that no sector, including academic medicine, is immune from the fallout. The urgent question before us, then, is this: How do we navigate these "unchartered waters" and continue our important work in education, research, and patient care?

For example, in medical education, how will the troubled economy affect our efforts at capacity building? One could easily argue that the timeless appeal of medicine as a profession allows it to hold its own during economic downturns, particularly when compared to other more "cyclic" occupations. As you will read in this issue's front-page story on 2008 medical school applicant numbers, this trend again appears to be the case, with applicant numbers remaining steady and a two-percent rise in first-year medical school enrollment. The issue is whether this will hold in a time when medical school tuition and debt continue to rise, and when the health care sector as a whole is viewed as besieged by today's complex operating environment.

Another workforce capacity issue—certain to be affected by the global financial crisis—is whether we will start to see a significant change in the flow of international medical graduates (IMGs) to our country. Because of our continued reliance on IMGs to fill certain geographic and specialty gaps (and in light of the primary care "crisis" I discussed in last month's column), our ability to address specific health care needs may be further hampered if that flow deceases due to economic turmoil.

Turning to medical school financial support, we must consider the economy's potential impact on state government budgets, and the fact that most of our member medical schools depend in some manner on these funds. With over 33 states reported to be experiencing FY 09 budget shortfalls, according to the Center on Budget and Policy Priorities, this constraint has substantial implications not only for medical school expansion but also for the daily operations of these schools. This financial challenge unfortunately may coincide with a decrease in philanthropic support for our member schools as donors confront their own personal challenges.

How will the economy affect research? In previous columns, I have discussed the need for predictable, sustainable growth in National Institutes of Health (NIH) funding, and the pressure we have experienced in the years following completion of the doubling of the NIH budget. Within the span of a few days, that pressure increased by hundreds of billions of dollars with the massive federal recovery package.

On the other hand, with academic medical centers responsible for one in 48 U.S. jobs, directly or indirectly, according to our 2007 report, The Economic Impact of AAMC Member Medical Schools and Teaching Hospitals, the biomedical sector may offer a key resource in revitalizing our economy. (It may be the case that, in addition to advocating the human value of new cures and treatments, the economic value of job creation and competitiveness becomes an effective argument for biomedical research as well.)

In the area of patient care, signs of impending trouble began to emerge well before Wall Street's September downturn, with more Americans this year deciding not to get important screening tests, putting off surgeries like hip and knee replacements, and filling fewer prescriptions. Additionally, Americans are reducing their use of mental health services and cutting doctors' visits overall. These data align with what we have been hearing from our members, who report changes in patterns of insurance and clinical volume. Ironically, while we have far less financial freedom as a nation, we may now have the sense of real "urgency" that something must be done to rationalize the financing and delivery system for health care in our country.

Additionally, if anyone believed we could "fix" our health care system by pouring more money into it, the current financial situation certainly calls that theory into question. Moreover, our problems will not be solved "simply" by assuring health insurance coverage for all. As I also noted in my column last month, it will require a combination of new care models, changes to our payment system, and further development of an interprofessional workforce.

The good news is that we are now armed with important resources for contributing to the national discussion on health care reform. In addition to our position statement on the Medical Home (PDF, 5 pages), the AAMC Advisory Panel on Health Care recently identified—and our Executive Council approved—six principles of health care reform. Released last month, these principles— which pertain to delivery, financing, practitioner workforce, health care quality, and support for certain inherent costs such as education—will help us evaluate new tools introduced when the health care reform debate begins in earnest (www.aamc.org/reformprinciples).

Just as the financial sector, along with others, has been forced to reexamine business practices and behaviors in the wake of the economic crisis, so, too, will academic medicine. Unlike other sectors, however, we will be compelled to work that much harder given our unique place in society at the intersection of three essential public goods. I strongly believe that it is our ongoing commitment to higher education, research, and patient care that will help us navigate these unchartered waters, sustain our missions in an unstable world, and help anchor our nation in turbulent times. The AAMC looks forward to working with President-elect Obama and his transition team as they ready for these and other challenges ahead.

Darrell G. Kirch, M.D., AAMC President and CEO

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