Medical Education and the Affordable Care Act

Posted by Fuld + Company on Jan 28, 2016 10:32:17 AM

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Kaiser Permanente announced plans for a Medical SchoolPerhaps it was inevitable. Kaiser Permanente, the California-based health system that integrates health insurance with its own hospitals and clinics, last month announced that it would open its own medical school in the state in 2019. 

The move underscores two factors that have bedeviled healthcare reform in the United States before and after the passage of the Affordable Care Act in 2010 – a forecasted shortage of physicians in the United States, and the failure of traditional medical education to keep pace with the training required to enable physicians to provide healthcare in an integrated, risk-based system.

“Healthcare is evolving at a very, very rapid pace in our country and we have a model of care that’s increasingly being looked to as an answer,” Dr. Edward M. Ellison, executive medical director for the Southern California Permanente Medical Group, told The New York Times. Dr. Ellison is helping to oversee the medical school’s creation. 

Kaiser Permanente reportedly plans to train students in its own style of integrated diagnosis and treatment, with a focus on research, utilizing new technologies such as telemedicine, and training doctors to work as part of a collaborative team of caregivers. According to The New York Times, 600 medical residents already train in Kaiser's own program. Thousands more complete a portion of its training each year. However, Kaiser Permanente’s medical school would be one of the first of its kind, run by an integrated health system with no academic partner.

Kaiser's integrated care model

“If healthcare is increasingly going to take place in integrated systems, a large part of the medical education experience should be what it’s like to work in a system like that: the efficiencies and the processes and the ways in which patient care is benefited,” said Dr. George E. Thibault, president of the Josiah Macy Jr. Foundation, as cited by The Times. The Macy Foundation a philanthropic organization that encourages innovation in medical schools, 

Implicit in Kaiser Permanente’s move is an acknowledgment that graduates from traditional university-based medical schools do not have the skills to provide care in an integrated environment in which more and more financial risk is shifted to the provider from the health insurer. Simply training future physicians in clinical techniques, diagnostics, and treatment is not enough. Physician training must include instruction in teamwork, coordinated care, technology, and cost-benefit calculations to better align medical education with advancing trends in healthcare reform.

Moreover, as the Affordable Care Act has provided health insurance coverage for more Americans, demand for primary care and specialist physicians has increased significantly since the law’s passage. As a result, nearly one in five Americans lives in a region designated as having a shortage of primary-care physicians, and the number of doctors entering the field isn’t expected to keep pace with demand. According to the Association of American Medical Colleges, there will be a shortage of some 66,000 physicians within the next 10 years as fewer residency slots become available and as more medical students choose higher-paying specialty concentrations. The Kaiser school may allow it to influence physician supply and demand, directing students to the service lines with the greatest need.

The Mayo Clinic's School of MedicineFor Kaiser Permanente, whose business model depends on broad access to primary care physicians to keep hospital stays and other critical care incidents as low as possible, a physician shortage of that magnitude is unacceptable. And, while Kaiser Permanente is not the first healthcare provider to open a medical school – the Mayo Clinic has had one since 1972 – it marks what is likely to be a significant expansion of provider-based physician education.

Indeed, Dr. Thibaut also told The Times that while Kaiser would not be the only integrated health system involved in medical education, it is “larger than any of them, has greater reach than any of them, greater resources.”

Dr. Ellison added that the goal was to have 46 students in the first class.  The school will be based in California. Graduates of the school will not be required to work within the Kaiser Permanente system.


Provider-based medical schools aren't the only shift facing health care. Consumer retail, enterprise IT, consumer electronics, health insurance, and health care delivery are rapidly converging to improve the customer/patient experience. Read more:

Health Care Convergence

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