Yeah, it's not that constructivist education is relativist (although it is at heart probably anti-foundationalist), it's that it aims to be the most effective way to creating learners who
1. are self-motivated
2. are curious
3. are good critical thinkers
4. care about other people
5. care about democracy
High stakes testing and curricula
do lead to more cheating, though. I'm sure many doctors would argue that medical school is designed to make sure that only the absolute best, most competent people can be doctors, but I'm not sure that having this large, influential class of all the people capable of going through (and willing and wishing to go through) the med school meat grinder is what will make medical care in this country better.
There were a couple of studies in the sixties related to med school performance and doctor competency. One showed that students who won more awards and high honors were actually
more likely to be among the least competent doctors when they started practicing; the other showed that med students' high grade point averages had little effect on later competency*.
A recent study by White and Fantone shows little negative effects for making med school classes pass/fail (these two have done
a fair amount of research with med school reform seemingly in mind).
A 1997 study by Davidson and Lewis suggests that while affirmative action students might receive lower NBME scores, they perform just as well in residency programs as non-affirmative action students. Basically, a lot of research shows that people who get high grades and good test scores get more high grades and good test scores, but that those things don't predict as much as many people believe.
I agree with you about wanting competent doctors, or competent anything, and I think it's important to make a distinction between the education of a 14 year old and a 24 year old, the latter of which still might stifle developing critical thinking skills, but which also might necessarily require more accuracy and better scholarship from the student. However, direct instruction methods in a student's formative years are probably not the way to turn this student into a scholar in the first place.
*I cannot for the life of me find abstracts to these two papers, but I know I didn't dream them.