Undergraduate clinical education follows the "bedside" tradition that exposes students to inpatients. However, the hospital learning environment has two main limitations. First, most inpatients require acute care, and students may complete their training without seeing patients with frequent non-emergent and chronic diseases that are managed in outpatient settings. Second, students rarely cope with diagnostic problems, because most inpatients are diagnosed in the community or the emergency room. These limitations have led some medical schools to offer longitudinal integrated clerkships in community settings instead of hospital block clerkship rotations. In this paper, I propose the hypothesis that the hospital learning environment has a third limitation: it causes students' distress and delays their development of reflectivity and medical professionalism. This hypothesis is supported by evidence that (a) the clinical learning environment, rather than students' personality traits, is the major driver of students' distress, and (b) the development of attributes, such as moral reasoning, empathy, emotional intelligence and tolerance of uncertainty that are included in the definitions of both reflectivity and medical professionalism, is arrested during undergraduate medical training. Future research may test the proposed hypothesis by comparing students' development of these attributes during clerkships in hospital wards with that during longitudinal clerkships in community settings.