Wednesday, December 22, 2010

Operational Cost Comparison between the allopathic and osteopathic colleges at Michigan State University

The following testimony by Dean Strampel givent to UNT Board of Regents in November 2009.

The Michigan State University College of Osteopathic Medicine experience started in the late 1950s among the members of the Michigan Association of Osteopathic Physicians and Surgeons with the idea to form a new school. The osteopathic profession “taxed” each individual physician $200 a year for ten years to create the Michigan Osteopathic College Foundation and the school started as the private Michigan College of Osteopathic Medicine in Pontiac in the 1969.  However, it quickly became evident that it was not financially viable, and the profession almost immediately began lobbying for the school to become a public institution.
                                                               
In the meantime, Michigan State University had formed an allopathic medical school, the College of Human Medicine, in 1966 because it was attempting to achieve AAU status and this was a requirement. Because of the strong lobby within the state from the osteopathic profession and the need in the state for primary care practitioners (particularly in rural areas), the Michigan legislature was receptive to funding an osteopathic medical school, and in 1969 Public Act 162 ordained that “A school of osteopathic medicine is established and shall be located as determined by the state board of education at an existing campus of a state university with an existing school or college of medicine.” Of the three schools that qualified, only MSU offered the fledging college a home, and in 1971, the private MCOM was moved to East Lansing. This simple decision has created an interesting environment.
                                                                                                                            
In the beginning, both colleges had funding lines directly from the state legislature, though eventually these were incorporated into the general fund of the university from legislative appropriations. For the past 40 years, major efforts have been required to protect each college’s resources and to keep them separate. Many of the other colleges at the university have felt the impact of the funding required to keep the allopathic school solvent. This cost is normal, and most of the time universities which have a large academic medical center cover much of cost by their indirect medical education payments from Medicare. Community-based medical schools do not have this luxury, and the M.D. school at MSU has had the specific problem of being too close to the osteopathic medical education model, which makes cost comparisons very easy.

For example, the college of osteopathic medicine has twice the student numbers, 90+% of the students admitted from the state of Michigan, more than two-thirds of the alumni still practicing in the state and a majority of those in primary care.  When the funding lines are divided by the number of students, the state dollars required for operations to educate a student runs $104,000 for the osteopathic college and $290,000 for the allopathic college. The discussion usually centers on the cost of research and the economic engine this means for the community, but the cost delta catches everyone’s attention. For operational funding which is twice the osteopathic school the M.D. school has not produced twice the funded research. The university community has provided the increased funds needed to continue these activities.  The M.D. school’s “expansion” to Grand Rapids is an effort to get out of this hole. The LCME has no specific dollar number for accreditation but the figure for the Grand Rapids expansion was $100 million and they actually wanted to have an endowment of $300 million committed to provide sustainable funding for the school.  That figure was not attainable, the university is now on the line for the increased cost, and this has become a major discussion point with the University Committee on Faculty Affairs.

The LCME and the COCA requirements are also a constant struggle because of the separation requirements for the faculty. Shared faculty lines need constant attention and they are currently under review again at this university. Research start-up funds are a significant cost. Currently it costs about 1.5 million dollars in start-up for one lab for one basic science researcher. Even with funding from the NIH this is rarely a project that starts in the black or even finishes in the black. 

Community immersed medical education is a different animal then the academic medical center model. Unfortunately, most allopathic institutions, because of the LCME requirements, gravitate toward the infrastructure of the academic medical center model. This increased cost becomes more apparent when the M.D. school is close to the osteopathic model.  For example, the cost for ten MSUCOM students in one of our partner hospitals over the past 30 years is about $60,000 per year. Our sister MD college asked to work with this same hospital, I agreed, and their initial cost for ten students in the same location was $690,000. This cost difference is very difficult to explain to the rest of the university faculty when the budget is short and personnel are being dismissed. 

Graduate medical education programs are real federal dollar generators for the community hospitals. With the Direct Medical Education payments (DME) from Medicare covering all the salaries and benefits for all the residents and then the Indirect Medical Education Payments (IME) providing about $100,000-120,000 per resident to the hospitals, you can see why this is important. However, since 1984 there has been a cap on the number and a hospital cannot get money for numbers more then their cap. If a hospital has never had graduate medical education, they can start but their cap will be set within three years to that number.  Under the current ACGME rules it is very hard to add a significant number of residents within that timeframe but with the osteopathic flexibility and the 4,000 graduates nationwide we can move these numbers up. In Michigan this has been the major reason I have 1,460 graduate education spots in my 31 partner hospitals. These spots are funded by the Medicare program. The ACGME will require proof of sustainable funding for any new programs.  The MSU College of Osteopathic Medicine has created ACGME residency spots using dual program in neurology and in physical medicine and rehabilitation, so it is not a requirement to start an M.D. school to have allopathic residency spots, and the dual programs are major recruiting tools for the hospitals to fill their programs.

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