The opportunity cost of medical school

While I agree with the poster, just to put things in perspective, his view is very shortsighted. This is understandable given that he is living his tough financial times as he writes the post. But extend the scenario out a bit and the argument becomes more untenable. At the “opportunity cost” salary the poster quoted, with yearly raises, a lifetime of work would accrue a net worth of $1,161,000 for the average white-collar worker in the business world. The doctor, making a conservative $125,000 a year and no raises, would end up with a net worth of $4,075,000, even after taking into account educational indebtedness. These calculations are ridiculously simplified and don’t even take into account investment income, spending habits, etc. The doctor appears much better off from a financial perspective when all is said and done. This is why the public has no tolerance for physicians who whine about money.

While I was slaving in med. school and working 100 plus hours/week as a resident, I used to always think to myself, what if I spent this kind of time on Wall Street? Well, my little brother did and his income has an extra zero. He had 2 years of grad school.

I take heating and air conditioning in high school. At 19, I have people chasing me, and offering me $5000 on the spot to come with them rather than the other guy chasing me.

I know very little about this business, but at 19, I am making $50K. Assuming no raise, I have made $500K by age 30, and lived a comfortable life.

Meanwhile, the doc owes $150K for college, and $250K for med school. He starts making $50K at age 26. Prior to that age, he lives like a destitute pig.

So at age 30, I am ahead by $500K. Doc is still in the hole for $400K and has made $200K. I am $700K ahead. I have earned every penny, of course.

We both go into private practice at 30. He starts netting $500K a year. With his intelligence and energy, in the heating and A/C business, I know enough to fit skyscrapers and to have my own contracting business. What is the upper limit on that? I have to deal with the Mob, which is a reasonable, helpful set of people, once paid off. Doc has to deal with HMO’s and the FBI backing up vans for his records because he upcoded a controversial procedure. They are nuts.

I am also helping 1000′s of people a year to stay healthy, just like the doc.

” but if you can’t keep up with the dentists, laywers, accountants, etc. why go to medical school?”

The problem is that for all your bitching on average you outstrip every one of those professions by 50%.

“some physicians might argue that 4x net worth earning potential is poor compensation for the liability risk and general arduousness of an entire career working in medicine. “

There are a hundred jobs just as arduous, many with a much higher death rate, than physicians. And they make less than 1/2 of the average physician. What liability risk? How many physicians actually end up bankrupt as a result of the “liability risk”? 1%? 1/2 of 1%? Do you even know?

When including the opportunity cost, earnings of MBA’s outstrip all physicians. Lawyers make about as much as specialty physicians, and primary care physicians come in last. The numbers were worked out in the mid-1990′s, it was either NEJM or JAMA.

The article was in either NEJM or JAMA in 1994.

The DOL talks about salary it is not talking about opportunity cost.

What does insurance profitability have to do with the opportunity cost of medical school?