Saturday, May 15, 1999

Heroic measures are needed to
resuscitate the medical school and
other UH programs that are vital
to Hawaii's well-being

By Richard S. Miller
Special to the Star-Bulletin

It's time Hawaii's leaders woke up to the fact that UH hosts a bunch of programs that, together, have become vital to the well-being of the state, and that the loss of any of them will be a tragic blow to the future of Hawaii. The conventional wisdom, that the university must cut programs in order to save others, is a cruel deception. The value of a multi-school university is greater than the sum of its parts. To borrow from John Donne, any unit's death diminishes the entire university.

Most professional and graduate schools, including medicine and public health, were built up over many years at great cost. They represent an enormous investment, involving hundreds of millions of dollars and extraordinary human capital. When functioning optimally they are great cash cows, bringing in enormous grants for research and special programs, and these in turn enrich the lives of those of us who live here, on other Pacific islands, in Asia, and often the entire world.

Their students, mostly local, are involved with Hawaii's citizens in a myriad of important ways, and their faculties strengthen and support the public institutions with which they deal.

Of particular importance, for us and our families, is that the presence of a medical school elevates enormously the quality of medicine that is practiced in the state. Without medical school faculty available to consult on complex conditions, the ability of Hawaii's physicians to render first-class care will rapidly diminish. Furthermore, it will be impossible to attract the kind of medical experts to the state who can help make Hawaii a medical haven or even to retain the excellent physicians we already have.

Without the medical school, business opportunities will be lost because qualified management will not come to a place that has anything but a top-flight medical care system. It will be many years, if ever, before telemedicine comes even close to substituting for the benefits of a medical school. Even as to that new technology, the medical school is in the best position to make it work effectively.

If these schools are lost, it will be impossible to recreate them in the foreseeable future. A further consequence will be that many young citizens of Hawaii who yearn for a medical education, or who would enter public health as a graduate program, will have to give up their dreams.

Of course we know that Hawaii is suffering a serious economic decline. How can we afford to support expensive university operations? The first answer is that we cannot give up any program until we have carefully examined all the possible alternatives for funding. I have one particularly promising idea which I will describe below, but other possibilities include selling, leasing, or even giving a school to some other wealthy university. Some universities might like to have a toehold in the Pacific or to get involved in tropical medicine.

To preserve UH, however, making the schools "self-supporting" may be better idea. Here's how to significantly reduce the level of state handouts to the affected schools. Apart from covering infrastructure costs, the state would substitute low-interest state-funded (guaranteed) loans for Hawaii residents for the appropriations it would otherwise provide to these schools. The affected school would set tuition rates at an amount sufficient to achieve excellence. Non-residents would have to secure their own financing, as is the case today. No qualified resident would be turned away for inability to afford tuition.

Of course, tuitions for a high-cost operation like the medical school will turn out to be very high. I calculate the amount under current conditions at about $50,000 per year. (I understand the University of Colorado's non-resident tuition is $50,000.) How then do we avoid placing a crushing economic burden on the backs of graduating M.D.s, a burden that would force them all to move into the most high-paying specialties and to avoid less lucrative but more public-oriented family practice?

First, repayment of loans to the state will be adjusted for the annual income of the borrowers after they leave medical school. No one would be required to repay more than a certain percentage of his or her loans each year. The percentage could be made progressive, with higher-earning graduates paying back a higher percentage than those with lower incomes.

Second, special dispensation on repayment, and indeed forgiveness for part of some loans, could be based upon a student's willingness to serve underserved needs of the state, or to enter low-paying public service. Some students from disadvantaged backgrounds might even be given a partial tuition waiver before they entered the school.

Determinations of loan repayment limits based on income, qualifications amounts of special dispensation on repayment or forgiveness, and the conditions and amounts for initial tuition waivers could be determined by a state board composed of distinguished citizens, and including economists and actuaries, with a significant number of members appointed by the state Legislature and the governor. The board's recommendations for qualifications and amounts could be subjected to periodic approval by the Legislature.

The point is that full-cost tuition need not be a burden. Those who enter high-income practices can repay their loans out of commensurately high incomes within a reasonably short time after entering practice. A medical education is a valuable thing and, like one's home, is worth buying and amortizing over a period of time.

Those who prefer to serve the people through less lucrative forms of practice, or who wish to enter practice in areas of need where medical positions are understaffed, may have their debts reduced and, in any event, will have a ceiling on the percentage of their income required to be repaid each year. In this way, the needs of the state and its disadvantaged populations, rather than pure market forces, can shape the distribution of important medical services in the state.

Similar programs could be used for other units that are struggling under current appropriations.

This program, notwithstanding its special incentives, should over the long run cost the state far less than it is now paying or would have to pay for outright appropriations to keep the medical school going.

Most of the money appropriated for the loans would ultimately return to the state, with modest interest. The board could control this return by controlling the nature and amount of special benefits, and by determining how far below current interest rates the rates for resident students should be.

If raising tuition to reflect actual costs, even when coupled with the special loan program described here, deters an excessive number of residents from applying to the school, then perhaps another alternative will be needed. But something creative has to be done to save the endangered schools...and fast!

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Richard S. Miller is professor of law emeritus
at the University of Hawaii Law School. The opinions expressed
here are his own, and not necessarily those of the
UH or the UH Law School.