Estimating the value of medical education: a net present value approach.
BACKGROUND
Estimating the value of a medical education is a difficult undertaking.


OBJECTIVE
As student debt levels rise and the role of managed care in price-setting increases, the financial benefit of an MD degree comes into question.


METHODS
We developed a model using net present value (NPV) analysis for a range of annual costs of medical school attendance. Using this model, we determined the point at which pursuing a medical education is a "break-even" proposition from a financial perspective.


RESULTS
The NPV of a medical education was positive for all annual costs of attendance from $10,000 to $100,000 and ranged from approximately $39,000 to $674,000 depending on the discount rate. Assuming a discount rate of 8%, only at an annual cost of attendance of $139,805 was the NPV = $0, which represents the break-even cost of medical education for a prospective student.


CONCLUSIONS
Medical education is a financially advantageous undertaking for costs of attendance that far exceed even the most expensive schools in the United States. Our analysis suggests that based on economics, the supply of future physicians ought to be secure.
Kahn
Marc J
MJ
Tulane University School of Medicine, New Orleans, Louisiana, USA. mkahn@tulane.edu
Nelling
Edward F
EF
D002321:Career Choice; D002322:Career Mobility; D003657:Decision Making; D004501:Education, Medical / Q000191:economics* / Q000706:statistics & numerical data; D004521:Educational Measurement; D004522:Educational Status; D006801:Humans; D007182:Income / Q000706:statistics & numerical data*; D018803:Models, Economic; D012577:Schools, Medical / Q000191:economics / Q000706:statistics & numerical data; D013337:Students, Medical / Q000706:statistics & numerical data*; D014146:Training Support / Q000191:economics* / Q000706:statistics & numerical data; D014481:United States