N.Y.U. and Others Offer Shorter Courses Through Medical School

But now one of the nation’s premier medical schools, New York University, and a few others around the United States are challenging that equation by offering a small percentage of students the chance to finish early, in three years instead of the traditional four.

Administrators at N.Y.U. say they can make the change without compromising quality, by eliminating redundancies in their science curriculum, getting students into clinical training more quickly and adding some extra class time in the summer.

Not only, they say, will those doctors be able to hang out their shingles to practice earlier, but they will save a quarter of the cost of medical school — $49,560 a year in tuition and fees at N.Y.U., and even more when room, board, books, supplies and other expenses are added in.

“We’re confident that our three-year students are going to get the same depth and core knowledge, that we’re not going to turn it into a trade school,” said Dr. Steven Abramson, vice dean for education, faculty and academic affairs at N.Y.U. School of Medicine.

At this point, the effort involves a small number of students at three medical schools: about 16 incoming students at N.Y.U., or about 10 percent of next year’s entering class; 9 at Texas Tech Health Science Center School of Medicine; and even fewer, for now, at Mercer University School of Medicine’s campus in Savannah, Ga. A similar trial at Louisiana State University has been delayed because of budget constraints.

But Dr. Steven Berk, the dean at Texas Tech, said that 10 or 15 other schools across the country had expressed interest in what his university was doing, and the deans of all three schools say that if the approach works, they will extend the option to larger numbers of students.

“You’re going to see this kind of three-year pathway become very prominent across the country,” Dr. Abramson predicted.

The deans say that getting students out the door more quickly will accomplish several goals. By speeding up the production of physicians, they say, it could eventually dampen a looming doctor shortage, although the number of doctors would not increase unless the schools admitted more students in the future.

The three-year program would also curtail student debt, which now averages $150,000 by graduation, and by doing so, persuade more students to go into shortage areas like pediatrics and internal medicine, rather than more lucrative specialties like dermatology.

The idea was supported by Dr. Ezekiel J. Emanuel, a former health adviser to President Obama, and a colleague, Victor R. Fuchs. In an editorial in the Journal of the American Medical Association in March, they said there was “substantial waste” in the nation’s medical education. “Years of training have been added without evidence that they enhance clinical skills or the quality of care,” they wrote. They suggested that the 14 years of college, medical school, residency and fellowship that it now takes to train a subspecialty physician could be reduced by 30 percent, to 10 years.

That opinion, however, is not universally held. Other experts say that a three-year medical program would deprive students of the time they need to delve deeply into their subjects, to consolidate their learning and to reach the level of maturity they need to begin practicing, while adding even more pressure to a stressful academic environment.

“The downside is that you are really tired,” said Dr. Dan Hunt, co-secretary of the Liaison Committee on Medical Education, the accrediting agency for medical schools in the United States and Canada. But because accreditation standards do not dictate the fine points of curriculum, the committee has approved N.Y.U.’s proposal, which exceeds by five weeks its requirement that schools provide at least 130 weeks of medical education.

The medical school is going ahead with its three-year program despite the damage from Hurricane Sandy, which forced NYU Langone Medical Center to evacuate more than 300 patients at the height of the storm and temporarily shut down three of its four main teaching hospitals.

Dr. Abramson of N.Y.U. said that postgraduate training, which typically includes three years in a hospital residency, and often fellowships after that, made it unnecessary to try to cram everything into the medical school years. Students in the three-year program will have to take eight weeks of class before entering medical school, and stay in the top half of their class academically. Those who do not meet the standards will revert to the four-year program.

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Boutiques Offer New Cash Protection as a U.S. Guarantee Ends

The accounts losing the insurance are used by businesses, municipalities and other entities like nonprofits that are willing to forgo any interest in order to have immediate access to their large pools of cash.

These accounts hold about 20 percent of all deposits in United States banks. Starting Jan. 1, only $250,000 in each noninterest bearing account will be backed by the Federal Deposit Insurance Corporation.

Now a scramble is under way to make sure these customers do not withdraw large sums out of banks, particularly community banks that have benefited from the guarantee. Because a depositor is barred from spreading out $1 million into four accounts within the same bank, many smaller banks are turning to a handful of specialized cash-management firms that can split up deposits into multiple $250,000 chunks and distribute them among a network of banks, each of which can insure $250,000.

One firm doing this parceling work, Reich & Tang, has had an influx of 25 new banks in the last few weeks sign up for the program, a 20 percent growth. Deposits managed by another firm, StoneCastle Cash Management, have surged to roughly $3 billion from just over $2 billion in September. “Interest has picked up dramatically,” said Joshua Siegel, managing principal of StoneCastle.

The end of the unlimited insurance, known as the Transaction Account Guarantee, is the latest twist in the government’s effort to scale back its support for the financial system, and the banking industry’s effort to mute the impact of the new lower limits.

Many analysts assume that even with the end of the government guarantee, the vast majority of the deposits will remain in the banks because the government will continue serving as some sort of backstop for most of the $1.5 trillion.

For small banks, there are programs like Reich & Tang’s, with the government fully insuring the scattered deposits. For the nation’s largest banks, there is a widely shared assumption that the government would be forced to provide a backstop to protect depositors in a crisis, as it did in 2008.

“Implicitly or explicitly, most of this money is going to still be guaranteed,” said Bruce Hinkle, an executive with Farin & Associates, a consulting firm that works with banks.

The unlimited guarantee was created in the depths of the crisis by the Federal Deposit Insurance Corporation, in order to stop a migration of customers from smaller banks to larger ones that were viewed as less likely to fail.

Most individual savers keep their money in interest-bearing accounts, where since the crisis the insurance coverage was raised to $250,000 from $100,000. Some families have gotten around the insurance limit by dividing money into separate $250,000 accounts under the names of different family members.

Firms like Reich & Tang will do this more systematically for wealthy clients. The end of the unlimited guarantee for corporate and municipal depositors is set to significantly increase business at these firms.

Mr. Siegel, managing principal of StoneCastle, which runs one of the largest programs, said he had seen a tenfold increase in interest from community banks in the last month. Begun in 2011, the service, called the Federally Insured Cash Account program, distributes large deposits throughout a network of roughly 500 banks.

StoneCastle and other firms make money by charging banks a small percentage of any deposits they distribute, generally less than 0.2 percent.

Frederick L. Cannon, a bank analyst at Keefe Bruyette & Woods, says that the expansion of the practice from wealthy individuals to corporate customers makes the F.D.I.C.’s limits toothless and exposes the government to more risk if banks fail in the future.

“You want these limits so there is some kind of market discipline on these banks,” said Mr. Cannon. “If I were on the F.D.I.C. board, I would be concerned about this.”

This article has been revised to reflect the following correction:

Correction: December 30, 2012

An earlier version of this article misidentified the federal insurer of bank deposits. It is the Federal Deposit Insurance Corporation, not the Federal Deposit Insurance Company.

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Boehner Invokes ‘Plan B,’ Dismissing Obama’s Offer

The plan would leave in place across-the-board spending cuts to military and domestic programs that Republicans have been warning could have dire consequences, especially to national defense.

Speaker John A. Boehner unveiled what he dubbed “Plan B” less than 24 hours after President Obama offered a more comprehensive deal that would raise tax rates on incomes over $400,000 and, over 10 years, produce $1.2 trillion in tax increases and cut $930 billion in spending.

Mr. Boehner pledged to continue negotiating on a broad deficit-reduction deal but called the president’s plan unbalanced and insufficient.

“What we’ve offered meets the definition of a balanced approach, but the president is not there yet,” Mr. Boehner said Tuesday.

The Boehner proposal was intended to raise the pressure on Democrats to compromise further still by embracing a tax increase on millionaires first pushed by Senator Charles E. Schumer, Democrat of New York, and Representative Nancy Pelosi of California, the House Democratic leader.

Confronted with her past support for raising income taxes only on millionaires, Ms. Pelosi said that effort had merely been “a plan to smoke out” Republicans.

But a protracted meeting of the House Republican Conference on Tuesday night made it clear that passage of Mr. Boehner’s proposal would be difficult. Representative Howard P. McKeon of California, the chairman of the House Armed Services Committee, said he was not sure he could support a bill that would allow $500 billion in military cuts over the next 10 years and indicated that other Republicans on his committee shared his concern.

Representative John Fleming, a conservative Republican from Louisiana, dismissed the speaker’s plan as a pointless “messaging exercise.”

“Why go on record raising taxes on anybody if it won’t cut spending and won’t even become law?” he asked. “I haven’t found a way of supporting that.”

Ms. Pelosi was leaning hard on House Democrats to stay united in their opposition. If she succeeds, the speaker could afford about only 18 Republican defections, fewer than he has had on any major fiscal vote since Republicans took control two years ago.

Defense Secretary Leon E. Panetta was unsparing on Tuesday in his criticism of lawmakers resisting a deal to stop the military cuts.

“It is unacceptable to me that men and women who put their lives on the line in distant lands have to worry about whether those here in Washington can effectively support them,” Mr. Panetta said in a speech at the National Press Club. “We’re down to the wire now. In these next few days, Congress needs to make the right decisions to avoid the fiscal disaster that awaits us.”

Senator Rob Portman of Ohio, an influential Republican, said the Pentagon cuts would damage not only military readiness but also the fragile economy.

House Republican leaders on Tuesday night sought to assess whether the speaker’s proposal could be brought to the House floor on Thursday. Under that plan, the House would take up take up tax legislation and consider two amendments. The first would mirror a Senate-passed bill to extend the expiring Bush-era tax cuts for incomes below $250,000. That would be expected to fail, as a show to the president that his initial offer cannot pass.

A second amendment would raise that threshold to incomes below $1 million. The House may also vote on some middle ground, like the president’s $400,000.

Mr. Boehner told House Republicans that he would also like the bill to include provisions to prevent the existing alternative minimum tax from expanding to impact more of the middle class and to extend existing low tax rates on inherited estates.

But he said the bill would not cancel across-the-board spending cuts — known as sequestration — that are scheduled to total $110 billion in 2013 and more than $1 trillion over 10 years.

Republicans would resume the fight for broad spending cuts, especially to entitlement programs like Medicare, in late January or February, when the government will face raising its borrowing limit and when, many Republicans believe, they will have much more leverage than they do now.

The White House came out strongly against the speaker’s plan. The White House press secretary, Jay Carney, said that it could not pass the Senate and “therefore will not protect middle-class families” from large tax increases schedule to begin on Jan. 1.

Jennifer Steinhauer and Thom Shanker contributed reporting.

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