Kevin, M.D. - Medical Weblog

The physicians have nothing to worry about. The AMA is already hard at work with their advertisement campaigns, threatening the old folks with removal of access to care, if physcian reimbursements are cut. This same type of scare tactic has worked with the captive patient population in a number of states to pass special laws protecting providers. The patients, after all, are mortified about their providers being forced to leave (abandoning existing patients for purely fiscal reasons) the geographical area or feel sorry that the providers are being "killed" making at least 100K. The comments regarding the sheep like deference of the plebeians to the provider patrician class is an apt indicator of the future of this issue.
 

Call me greedy, if you can't do the math.

My state institutions have some of the lowest tuition rates of all U.S. allopathic medical schools. Here's the LCME data:
http://services.aamc.org/tsfreports/report.cfm?select_control=PUB&year_of_study=2006

Still, in my two years I've collected over $70,000 in debt. Throw in my debt from undergrad and I've cleared $100,000 in debt so far. By the time I'm done let's say I owe 170,000. I consolidate and pay it off over fifteen years and with maybe 6% interest and I end up paying over $300,000.

Now, let's go through the numbers. Let's say we take me and my friend Bob. We both graduate from Private U. with $30,000 in undergrad student loans. I go to med school, Bob goes out and gets a pretty good job (let's say he's a business major or a comp sci). He starts out in the low 40k range for a salary, and gets promoted and raises and his average salary over the next 15 years is $65,000. Pretty good money, but not unreasonable, for someone driven who did well in school (Hey, what do you know? The same qualities that get you into medical school)

Bob takes 15 years to pay off his student loans and ends up paying about $45,000.

Let's look at Bob, discounting completely the effects of taxes and so forth.

Debt: -45000
Income: 65000 x 15 = 675000
Earned: 930000

I decide to go to medical school and my debt balloons to 170000. I pay it off over 15 years and end up paying right around 300000 (@ 6%).
I go to a three year family practice residency and my average salary is $35000 during my training.

I go into private practice for the next 8 years (so, it's a total of 15 years since I graduated from college). My average salary over those 8 years is right around the average and exactly double Bob's average salary over the period at $130000.

Debt: -300000
Income 1: 35000 x 3 = 105000
Income 2: 130000 x 8 = 1040000
Earned: 845000

I've left out the cost of starting a practice or buying into a practice (always lovely as you go FURTHER into debt) and just went simply with the average salary of an FP.

Compared to other successful college graduates, medical school was simply not a sound financial choice for most primary care physicians. That $100000 salary isn't overpaying. The public who think that, can't see beyond those simple six digits...
 

Those numbers above are obviously relaly simplistic and fudged (for instance obviously, in that example I'm not paying my debt for fifteen years...since it hasn't been fifteen years since I graduated).

Still, it's merely example of how the large debt occured in training to become a physician undermines what the public sometimes thinks are excessive earnings.
 

Are physician salaries based upon the amount of debt associated with training or are they associated with the simple economics of limited supply for ever increasing demand? As an example (somewhat facetious) consider an undergrad that goes to an east coast liberal arts college with tuition costs of 30K per anum and obtains a degree in underwater basket weaving with a minor in underwater fire prevention. Is there any legal statute or underlying economics principle that suggests that their after expense compensation, once in the job market, be commensurate with their debt load? One would think not.
 

"what the public sometimes thinks are excessive earnings."

I doubt "the public" in general thinks $100,000 is excessive. The perception of "overpaid" probably comes from the incomes earned by specialists. I ran across an ad for a radiologist not long ago which listed the starting salary at $400,000, and after two years, clinic partnership and profit participation. This particular clinic association provides its own malpractice insurance as well, so I would think any accrued debts could be paid off pretty quickly.
 

Oddly enough, the interpretive aspect of radiology would be one of the areas of clinical medicine that would be ripe for overseas outsourcing were clinical medicine subject to the same economic factors as most other white collar professions.
 

The problem anon isn't that outsourcing noninterventional rad is a problem (it isn't). The question is who are the lawyer's going to sue? Nighthawks and other such organizations are all US certified docs. Until the "legal" aspects are worked out (if ever) most rad won't go overseas.
 

Is it the ATLA as much as it is the ACR that is standing in the way of outsourcing? The former can always go after the hospital (deeper pockets) than the individual foreign radiologist. One wonders how many patients if offered the choice of using a non-US (state) licensed radiologist (with limited rights to sue)at substantially lower cost vs. a US (state)licensed radiologist at much higher cost but with a greater opportunity to sue would choose the former?
 

According to the Dept. of Labor, the avg. physician makes $150K a year, the avg. surgeon $250K.

Can anyone give a cite to the average amount of debt of these two? If you can't, then let's quit using the high debt number and the lower paid number.
 

Interestingly enough, the LA Times has a front page article on offshore healthcare options for employers.
 

"The savings can be sizable. A coronary artery bypass surgery costs about $6,500 at Apollo Hospitals in India, Milstein estimated. The average price in California is $60,400."
 

One wonders how many patients if offered the choice of using a non-US (state) licensed radiologist (with limited rights to sue)at substantially lower cost vs. a US (state)licensed radiologist at much higher cost but with a greater opportunity to sue would choose the former?
Depends on the insurance. Considering that there is "medical tourism" to other countries, a substantial number of uninsured probably will.
 

I think it is about time to lobby my state government to provide the option of outsourced healthcare for major non-emergency procedures for state employees as a method of cost reduction.
 

AMA stats on indebtedness of doctors:
http://www.ama-assn.org/ama/pub/category/5349.html