The 2021-22 Budget: UC Programs in Medical Education

analysis full gutter The 2021-22 Budget: UC Programs in Medical Education FEBRUARY 2021 This post analyzes the Governor’s proposal students) enrolled in PRIME programs. PRIME to augment ongoing General Fund support for students receive a minimum of four years of University of California (UC) Programs in Medical training, the same length as their other medical Education (PRIME)—a collection of medical school school peers. Both PRIME students and other programs providing specialized instruction in health medical school students generally are required equity matters. The post first provides background to complete two years of classroom instruction, about health equity and PRIME programs, then followed by two years of clinical experiences in describes the Governor’s PRIME proposal, offers hospitals and other medical settings. Some of our assessment of the proposal, and gives the courses PRIME students are required to take, several recommendations. however, are focused on health equity matters, and PRIME students’ clinical experiences tend Background to be focused on underserved populations and UC Operates Six Medical Schools. In 2020-21, communities. Beyond the standard four-year UC is enrolling over 3,600 medical students across training program, a portion of PRIME students (as six medical schools. According to UC, these well as a portion of other medical school students) medical schools fund their operations primarily take additional coursework by pursuing a joint through a mix of core funding (state General Fund master’s degree requiring a fifth year of study (often and student tuition revenue) and a portion of in public health). clinical revenues earned by medical school faculty. State First Provided Funding Explicitly for Historically, the state has not directly funded PRIME in 2005-06. UC Irvine was the first campus medical school operations or set medical school to develop a PRIME program, with its first class enrollment expectations in the annual budget act, enrolled in 2004-05. As with other UC medical instead leaving these decisions to campuses. In school initiatives, UC Irvine funded its new PRIME recent years, however, the state has allocated program from within its campus support budget. In funds directly for certain medical education 2005-06, the state began providing funds explicitly initiatives. Most notably, the state has supported for PRIME programs and setting associated the creation and development of the UC Riverside School of Figure 1 Medicine. The state also recently UC Medical Schools Run Six PRIME Programs provided funding to expand the 2020-21 services of the UC San Francisco Campus Focus Students School of Medicine Fresno Branch Campus in partnership with Los Angeles Underserved communities 102 UC Merced. San Francisco/Berkeley Urban underserved 75 Irvine Latino communities 63 PRIME Trains Medical San Diego Health equity 53 Students on Health Equity Davis Rural communities 36 Matters. As Figure 1 shows, UC San Francisco/Fresno San Joaquin Valley 36 operates six PRIME programs. In Totals 365 2020-21, 365 students (around PRIME = Programs in Medical Education. 10 percent of all medical school 2021-22 LAO Budget Series 1 analysis full gutter enrollment targets. Over the next five years, UC $15,000 per-student rate provided in previous developed other PRIME programs, and the state years, with the rate intending to cover the full state provided additional funds for PRIME. Throughout cost of the program. these years, state funding for PRIME was linked to Growth in PRIME Reflects Notable Portion an underlying $15,000 per-student funding rate. of Overall Medical School Growth. Since its The rate was not tied to any particular formula inception in 2004-05, PRIME has represented and the basis for the amount was not specified around 40 percent of the growth in UC medical in statute. It appears the rate was not intended school enrollment. Another roughly 40 percent to cover the full cost of the additional enrollment has been concentrated at the UC Riverside growth, with UC expected to fund the remaining School of Medicine, which enrolled its first class costs using other sources, including general in 2013-14. The remaining roughly 20 percent is enrollment growth funds. from regular enrollment growth at UC’s other five State No Longer Designates Funding medical schools. Explicitly for PRIME. As Figure 2 shows, the state Proposal maintained and increased PRIME funding through 2010-11. Though the state stopped designating Governor Proposes Ongoing Augmentation funds for PRIME in 2011-12, UC campuses for PRIME. The proposed augmentation continued to grow enrollment in these programs. in 2021-22—$12.9 million—would fund The only additional funding the state has provided enrollment growth in PRIME programs as well as explicitly for PRIME since 2010-11 was in 2015-16, enhancements among existing and new PRIME when it provided an ongoing augmentation for the programs. Provisional language would require UC San Joaquin Valley PRIME program. Specifically, to spend one-third of this amount ($4.3 million) the state provided $1.9 million ongoing General on student financial aid. Below, we describe the Fund to support enrollment of 48 students components of this proposal in more detail. in this program. The underlying per-student funding rate—$38,646—was higher than the Figure 2 PRIME Enrollment Has Grown With, and Without, State Earmarks Student Headcount 400 Total PRIME Enrollment 350 State-Earmarked PRIME Enrollment 300 250 200 150 100 50 2004-05 2008-09 2012-13 2016-17 2020-21 PRIME = Programs in Medical Education. 2021-22 LAO Budget Series 2 analysis full gutter Portion of Augmentation Would Support of the amount attributable to enrollment growth Enrollment Growth. UC attributes $4 million of the ($1.3 million) would cover financial aid for the augmentation toward growing PRIME enrollment additional students and the remainder ($2.7 million) by 112 students over the next six years. As would cover instructional costs (such as hiring Figure 3 shows, 96 students would be in two new new faculty). According to UC, the proposed PRIME programs focused on American Indian/ per-student funding rate for enrollment growth Alaska Native issues and Black health issues. The ($35,600) is the state rate provided to campuses remaining 16 students would be across five of the for health science instruction under the university’s existing PRIME programs. (UC plans to support current allocation formula. (The nearby box explains an additional 12 students in the sixth program, the current methodology UC uses to distribute San Joaquin Valley PRIME, using the funds it funds to campuses.) received in 2015-16). According to UC, one-third Figure 3 UC Would Grow PRIME Enrollment Over the Next Six Years Student Headcount UC Enrollment Plan Change Over 2020-21 Actual PRIME Program 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 Amount Percent Los Angeles 102 90 90 90 90 90 90 -12 -11.8% San Francisco/Berkeley 75 75 75 75 75 75 75 — — Irvine 63 60 60 60 60 60 60 -3 -4.8 San Diego 53 51 53 55 56 58 60 7 13.2 Davis 36 33 36 40 44 48 60 24 66.7 San Francisco/Fresno 36 39 42 48 48 48 48 12a 33.3 New (American Indian/ — 12 24 36 48 48 48 48 New Alaska Native) New (Black) — 12 24 36 48 48 48 48 New Totals 365 372 404 440 469 475 489 124 34.0% a UC plans to support this growth using funds the state provided in 2015-16. PRIME = Programs in Medical Education. Overview of How UC Allocates State General Funds Most Funding Allocated on a Weighted Student Basis. Since 2012, the University of California (UC) Office of the President has used a certain approach to allocate state General Fund across the UC system. Under this approach, the university first sets aside funds to cover certain systemwide and campus costs, such as systemwide debt service costs and study abroad programs. The university then allocates most of the remaining General Fund to eight of its ten campuses using a weighted per-student formula. This formula provides a weight of 1 for undergraduate, graduate master’s, and professional enrollment excluding the health sciences; a weight of 2.5 for graduate academic enrollment at the doctoral level; and a weight of 5 for professional enrollment in the health sciences (consisting of medical schools, dentistry, optometry, and pharmacy, among other health programs). For the remaining two campuses—San Francisco and Merced—the university provides separate allotments that result in higher amounts of funding per student than for the other campuses. UC San Francisco’s per-student funding is higher due to the school’s sole focus on health science instruction, whereas UC Merced’s per-student funding is higher due to its relatively small size. 2021-22 LAO Budget Series 3 analysis full gutter Remainder Would Bolster PRIME Funding. Legislature only has information for the fraction UC attributes the remaining $8.9 million toward of UC’s medical students enrolled in PRIME. enhancing support for the existing PRIME Second, while the proposed new programs identify programs. According to UC, these funds would populations with longstanding health disparities, support enrollment growth from previous years UC does not appear to have a broader long-term that did not receive earmarked support in the plan addressing the needs of other underserved state budget. One-third of this amount ($3 million) regions and populations. Furthermore, the would enhance student financial aid packages, missions of UC’s existing PRIME programs do potentially reducing debt burdens for some not seem well coordinated, with some focused students and enabling more students to pursue the on general health equity matters and others more five-year dual degree option. The remaining amount targeted to specific regions and populations. ($5.9 million) would be available to cover any other Without better information, the Legislature would PRIME priority. In discussions with our office, UC have little understanding as to how UC’s plans suggested several uses of these remaining funds, would meet state workforce needs and resolve including student and faculty recruitment, program longstanding inequities. administration, additional funds for financial Proposed Budgetary Approach for Enrollment aid, and additional funds for general medical Growth Has Three Weaknesses. If UC were school classes. to have a comprehensive plan that considered enrollment across all of UC’s medical schools and Assessment PRIME programs, along with a funding strategy for Overarching Objectives of Proposal Have supporting that enrollment, the Legislature would Merit, but Proposal Has Several Shortcomings. have the ability to assess how much additional The Governor’s proposal highlights several enrollment to support with state funds. Though longstanding health care issues in California. supporting some enrollment growth might be Research suggests that California could face a warranted, the Governor’s budgetary approach has shortage of physicians in the future, particularly for certain shortcomings, as discussed below. primary care physicians. Data also suggest that • Funding Would Be Provided Upfront. The there are existing disparities in health care across Governor proposes providing all enrollment the state. The supply of physicians per capita varies growth funding in 2021-22, even though UC among the state’s regions, with supply being the will not achieve full growth for several years. lowest in the San Joaquin Valley, Inland Empire, Providing all funds upfront weakens oversight and Northern California. Health care utilization and and limits the Legislature’s ability to adjust the quality of care also varies substantially by race/ support levels as new information becomes ethnicity, and certain groups (such as Latinos) are available. In this regard, the state’s experience underrepresented among California’s physician with San Joaquin Valley PRIME serves as a workforce. Given these issues, the Governor’s cautionary lesson. Despite receiving upfront objectives to increase medical school enrollment funds in 2015-16 for 48 students, as of and address health disparities are commendable. 2020-21, the program enrolls 36 students and We are concerned, however, that the proposal has does not plan on attaining its target level of certain shortcomings, as described below. students until 2023-24. Proposal Lacks Overall Medical School • Proposal Would Use Inconsistent Funding and Health Equity Plan. The administration’s Rate. UC did not derive its proposed proposal lacks key aspects vital to assessing its per-student funding rate using a comparable merit. First, neither the administration nor UC methodology to its general enrollment growth have shared with the Legislature their plans for formula. The general enrollment growth UC’s overall medical student enrollment levels and formula, known as the “marginal cost of how medical schools intend to cover the costs instruction,” (1) makes key assumptions about associated with any planned growth. Instead, the 2021-22 LAO Budget Series 4 analysis full gutter education costs (such as a faculty-student on student postgraduate activities is incomplete. ratio), (2) explicitly excludes certain fixed UC Irvine’s PRIME program, which focuses on costs that do not increase with enrollment, serving Latino communities, has the most complete and (3) contains a method for attributing a information on its graduates’ postgraduate share of the marginal cost to the state General activities. According to UC, 72 percent of practicing Fund and student tuition revenue. Without physicians from the UC Irvine program practice in a comparable formula for medical students, county health facilities or federal qualified health the Legislature has little basis to determine centers, 66 percent work in practices that serve whether the proposed funding rate would primarily low-income patients, and 53 percent appropriately align with programmatic costs. work in practices where a majority of patients are • State Would Not Set Enrollment Targets. Latino. UC also provided data on UC Davis’ rural Despite UC having enrollment growth plans PRIME program, noting that 60 percent of its for PRIME, the Governor’s proposal does graduates practice in a rural area of the state. To not link any additional funding to specific date, however, the state does not have complete enrollment expectations. Such an approach postgraduate data available for all of UC’s PRIME weakens accountability and potentially creates programs. The Governor’s proposal would maintain confusion over how many additional students this information deficit, as it does not require any are to be enrolled. regular reporting on PRIME outcomes. Greater Clarity Is Needed on Financial Recommendations Aid Objectives. Similar to funding enrollment Direct UC to Develop Overall Medical School growth, we think increasing student financial aid and PRIME Plan. We recommend withholding and reducing student debt could be reasonable funds for enrollment growth in PRIME programs or objectives. As of this writing, however, neither any new PRIME programs until the administration the administration nor UC had provided a clear and UC provide a plan for overall medical school and comprehensive plan for addressing medical enrollment, with a specific breakout for PRIME students’ debt levels. Such a plan would typically enrollment and detail on how the associated costs include a standard expectation of a manageable would be covered. The plan should also identify the medical school debt level, the amount of available remaining populations of Californians who are not grant aid, and an estimate of the remaining unmet adequately served by UC’s existing medical school financial need. In the absence of this type of plan, programs and the actions UC will take to address the Legislature has little basis to determine whether these health disparities. the proposed set aside for financial aid would fulfill Phase in Funds, Develop Marginal Cost its intended purpose. Formula, and Set Enrollment Targets. If the Unclear if Existing Programs Warrant Legislature were to decide to fund growth in Additional Funding. The university to date has medical school enrollment or PRIME enrollment not provided a clear rationale to bolster support over a multiyear period, we recommend it develop for existing PRIME programs. While program an alternative budget approach. Under this enhancement could be warranted were PRIME alternative approach, the Legislature would phase programs to have gaps in service levels or in enrollment growth funding over multiple years. outcomes, UC has not clearly documented these To assist medical schools in their planning, the gaps. Despite UC’s claim that PRIME programs Legislature could provide funds one year in advance are underfunded by the state, virtually all students of each cohort’s planned growth. The state already in PRIME graduate and are successfully placed in takes this approach when funding general campus postgraduate residency programs. enrollment growth. To determine funding levels, we State Lacks Consistent Reporting on PRIME recommend the Legislature direct UC to develop a Outcomes After Graduation. While UC reports marginal cost of instruction for medical education high completion rates for its PRIME students, data that is connected to anticipated education costs 2021-22 LAO Budget Series 5 analysis full gutter (excluding fixed costs) and devises a way to share projected improvements in outcomes resulting these costs between state funding, student tuition, from these funds. If such documentation cannot and faculty clinical revenue. Furthermore, any adequately justify program enhancement funds, we enrollment growth funds should be attached to recommend the Legislature redirect the remainder explicit enrollment growth expectations to facilitate of the proposed funds toward other high budget public accountability and legislative oversight. priorities in 2021-22. Direct UC to Submit Plan on Addressing Require Periodic Reporting. To aid legislative Unmet Student Financial Need. We similarly oversight and accountability, we recommend recommend the Legislature withhold additional the Legislature require UC to report periodically funding for financial aid until UC provides a more (either annually or biennially) on PRIME activities specific estimate of medical students’ and PRIME and outcomes. At a minimum, the reports students’ unmet financial need. Such an analysis should include: (1) PRIME enrollment and should include an estimated cost of attendance, student demographics in each program, (2) a assumed student contribution amount through summary of each program’s current curriculum, borrowing, an estimate of existing grant aid (3) graduation and residency placement rates, and provided to students, and the remaining financial (4) postgraduate data on where PRIME graduates need to be addressed through additional grant aid. are practicing and the extent to which they are If UC Wants to Enrich Programs, Stronger serving the target populations and communities of Case Needs to Be Made. Before providing any their respective programs. If feasible, the reports remaining funding for program enhancement, should contain outcomes data for all student we recommend the Legislature direct UC to cohorts since 2004-05. provide clearer documentation on its uses and LAO Publications This report was prepared by Jason Constantouros, and reviewed by Jennifer Pacella and Anthony Simbol. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. 2021-22 LAO Budget Series 6