Engaging in an economic conversation about the conventional compensation of a physician leads one to believe that doctors are well-to-do. In the minds of most citizens, school-tuition board members and even local neighbors, if you’re a physician the presumption is that you are economically prosperous, maybe even rich. This sociological assumption probably sounds false to most whom honorably don the white coat. Perhaps a decade or two ago, when medical school tuition was less and compensation was relatively higher, this adage would be true. But in 2018, when medical school debt can easily set one back $350,000 (before interest rates), this is false.
Reading annual publications on specialty-specific incomes leads one to believe that every radiologist and surgeon should be driving a Porsche and living a luxurious life. The reality is quite different from what is written on paper. A doctor only accumulates that level on income after surviving an arduous period of residency and fellowship training, which only becomes relevant after they’ve completed four years of medical school. Mind you, the latter portion of that equation costs most students over $500,000 when you include interest rates on their educational loans.
Let’s examine a hypothetical scenario of Amie and Bill. These two friends earned their bachelor’s degrees at a prestigious undergraduate institution. Amie majored in economics and finance and entered the workforce after graduation; her starting salary was $90,000. Bill majored in molecular biology, struggled to maintain a stellar GPA as he competed with other pre-med students and entered medical school after working for $12.50 an hour as a research technician the year after completing his degree.
While Bill spent four years racking up debt to the tune of $300,000, Amie continued to grow in her company and now earns a respectable $165,000. She was also paid by her employer to complete her MBA, with her job waiting for her when she finished — something quite typical of most consulting firms. When Bill graduates medical school, neighbors, and friends think he is now a doctor, which they equate with a large salary and that fast Porsche. Little do they know, he is now at the bottom of the medical hierarchy and is living off $50,000 a year; but yes, he is a doctor. The tally at this stage: Amie has earned about $450,000 in income, while Bill has plummeted himself into $300,000 of debt.
Amie continues to grow in her respected field, and year over year, her hard work enables her to increase her compensation and bonus structure (this is a common phenomenon in this industry).
For the next six years, her salary grows to approximately $250,000 a year. Simultaneously, Bill is perfecting his surgical skills while working 80 hours a week and taking home about $1,000 a week. Although this is an economical comparison, we can all presume what type of family life Bill enjoys with his small paycheck and all-encompassing hours at the hospital. The tally at this stage: Amie has made nearly $2 million since graduating with her bachelor’s degree, while Bill now has $400,000 in loans (interest included), zero savings, and has earned $300,000 in his total career. During residency, Bill probably made less than your average mailman or school teacher, while Amie built her career and life.
Physician’s do what they do because it is inherent to their DNA to serve humanity; they better humankind through brilliant innovation, relentless effort and an ambitious mission to heal the sick. There is no higher calling. Any doctor I’ve worked with could easily replace our high-paid consultants; they have the intelligence, drive, and knowledge to demand a respectable salary in any consulting firm or tech company. They chose to forgo lucrative careers for a journey filled with wounds and continuous battles. And yet, they are underpaid. Yes, our current health care system actually underpays physicians for a large portion of their career.
After a 15-year journey of delayed gratification, Bill will begin making $300K-$400K a year, but lest you forget his massive mountain of student debt. Any economist can demonstrate that medical school debt decreases the sexy paycheck of a surgeon to a mediocre income. So no, doctors are not rich, and that fancy Porsche is usually driven by the investment banker or executive consultant. And yes, most physicians could be paid handsomely if they worked in a large biotech company or health care consulting firm.
We live in an alarming time. Physician suicide rates are skyrocketing and compensation per procedure from insurance companies continues to decrease. Doctors are not well compensated, period. As a society, we demand more from this field than any other profession. The pressures resting on the shoulders of these soldiers is immense, and only a select few can dance through the storm.
Recently, I was reviewing the economic packages one of our companies was offering to a group of physicians. These were doctors who have completed their training, and their median salary demands did not exceed $180,000. Granted these were general physicians, but our computer scientists and consultants were making significantly more on an annual basis. I find this deeply troubling. Certainly, the structure of our government-funded residency programs restricts a large increase in resident compensation, and our insurance companies make it very challenging for doctors to earn higher wages. But perhaps if we work on decreasing unfair medical student debt and giving doctors more autonomy, we can help improve our health care system.
What I mean by this is simple: Strides to improve the burdensomeness of being a physician in 2018 are hitting perpetual roadblocks. Doctors are burned out, and many commit suicide. Yet, we want better health care delivery, fewer medical errors and more clinical efficiency. At the same time, we want to keep as many clever doctors within academia — and outside of private practice — as possible. If we can’t change the health care system rapidly, perhaps we can add bonus structures to all doctors, residents included, to incentivize them to work “better” — which may, in turn, improve patient care.
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