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I don't disagree with any of this, and I understand its not entirely medical schools' fault that things are how they are. It doesn't change the question, though: is there really a role for medical school clinicals in a world where its becoming legally impossible for medical students to really have clinicals? Is it ethical for schools to charge so much when they offer so little?
I would have to say that, yes, there is a role for med school clinical rotations. The quality needs to be improved - at least at the schools that the posters on this thread attend. For instance, med students should follow patients, write notes, present at rounds, formulate plans, call consults, follow-up on results, etc. The notes, whether they go in the chart or not, should be reviewed by a resident or attending.
Two of the reasons I think clinicals should not be abandoned are:
1) I do not want internship to be the first time a newly minted doctor experiences the clinical aspects of medicine. If it is, then the internship would undoubtedly become what M3 and M4 are now - observation.
2) I strongly feel that med students need the clinical experience to make an informed decision about their selection of speciality.
As far as the finances go, I would be curious if med school really would be cheaper if it were shorter. It seems that the most expensive years on a cost-per-student basis would be the first two. The second two should be relatively cheap other than providing malpractice insurance. Is it possible that the M3 and M4 tuition checks are really just subsidizing the M1 and M2 expenses?