As someone who has worked at Des Moines University (and Iowa State) I found this thread interesting. I think there would be an opportunity to attract students, but as
@Sigmapolis referenced, the real difficulty is in the medical rotation and residency spots locally (and nationally) which makes life really difficult.
The real bottleneck in the system is the number of residencies.
Rather than talk about that national issue (which is a really long and complex topic that could become very political quickly), we should talk about Iowa.
https://mk0nrmp3oyqui6wqfm.kinstacd.../Match-Rate-by-Specialty-and-State-2019-1.pdf
According to that document, there were 252 residency slots in Iowa for 2019. More than half of those were in comparatively "unsexy" and low-paying specialties such as family medicine, internal medicine, pediatrics, and psychiatry, which are really important to have if you want practicing physicians taking care of your population but are not the ones known for bringing in bonanzas of federal and private research dollars to a state.
Your numbers here --
Interestingly, DMU's DO med student class has a much larger class-size than the U of I. About 220 per class for DMU compared to 150 for Iowa. And there are more DMU grads than U of I grads practicing in the state of Iowa. DMU would also get thousands of applications for those 200+ med school spots.
Say that the state is already exporting medical residents on a net basis. The 370 in those classes are going to be in excess of the ~250 slots, and those slots are still going to be desired by at least some out-of-staters (e.g., people who went to college or medical school out of Iowa even if they grew up in Iowa, people who maybe have a spouse who wants to move back, international applicants, etc.), so many of those UOI and DMU medical school graduates would be leaving anyways. Doctors tend to "stick" around their residency and fellowship locations, though not always, so many of them are never coming back. If they match in Chicago, chances are they end up in Illinois.
Adding another... oh, I do not know, 100+ to be viable as its own school... from a hypothetical Iowa State program only worsens that calculus. Iowa just does not have much for residencies because it does not have much more teaching hospitals or a healthcare cluster in its major cities the way other states do. I figure if the need is sensed there by the state, then it just means admit more people to Iowa, not open up a new one.
An aside -- my wife's medical school receives 5,000+ applications per year. Of those, they interview 440 applicants and accept 120. That is roughly a 9% chance of even landing an interview and 27% of receiving an invitation after the interview. My wife was #120 of her class to receive her invitation when she made it. She received the call from the program director a week before classes started (she was all set at a less prestigious program) and had to break a lease to make it happen, but it was worth it in the end.
Wow, that's pretty crazy. No new schools from 1982 - 2000. And then, as you say, from 2000+, quite a few new ones.
What was the driver of this?
Ones not too dissimilar to the ones for undergraduate programs --
-- perceived need for more doctors in the future with an aging population (even if an aging population needs home health aides more than MDs)
-- students willing to pay for it/federal loans making it easier to finance and the perception that it is always going to be "worth it" no matter what
-- academic prestige of operating a medical school, as an offering to your own undergraduates (e.g., Stanford is NOTORIOUS for heavily favoring its own undergrads in medical school applications, making the place all the more attractive to top-flight talent coming out of high schools) upon their graduations, and a potential cash cow if it can attract private and federal research dollars to the school
-- some increase in the number of PGY-1 residencies slots over time, though not really enough to keep up with the pace of newly-minted MDs and DOs and the demand for those slots from applicants coming from other countries
-- hopefully builds up a wealthy and influential alumni base of rich doctors
-- some of them are, however, not even trying to go the prestige route, instead building up institutes designed around community and primary care and funneling physicians towards those kinds of residencies, which are way less competitive and help train doctors to fill the needs of rural, county, and community health facilities that need it the most