The Economics of Residency Application Fees
It should be no surprise to readers that debt is a major concern for medical students today. This not only harms psychological well-being and delays key life decisions but also deters students from pursuing lower-reimbursing specialties.2 Therefore, any policy designed to increase costs to students should be approached cautiously.
Stoddard asserts that after raising the cost of applications, medical students would apply to fewer programs so that they would pay roughly the same amount as before. However, from the medical student perspective, demand is inelastic in this market—that is, for any price increase, students will decrease their demand by a proportionally smaller percentage (if at all). If a student believes that he must apply to 30 programs to match into a residency program, to convert his debt and years of training into income for the first time in his life, and to ensure that he finds a program that meets the needs of his current and future life circumstances, then the suggested fee increase of about $200 is unlikely to convince him to apply to 10 fewer programs. For comparison, consider the cost of board examinations or travel for a single interview. In order to create a strong enough economic disincentive, the cost per application would have to be unreasonably high, and it would put students with the least financial resources at the greatest disadvantage.
Program directors may not have the time to holistically assess all of their applicants, but raising prices is not the answer. We might instead consider providing a hard limit to the number of applications per applicant, or creating a more succinct application.