The High Price of Becoming A Doctor
The December issue of Money Magazine has an article about a young couple, both in the residency stage of their medical training. Meg and Chris are 28 and 29, and happily expecting their first child. From the details in the article, it appears that they are a pretty frugal couple, living with few extravagances or extras. They each work about 70 hours a week, and their combined income is about $91,000/year. For 70+ hour weeks, that’s not a lot of cash. The couple also has $483,000 in student loans. Meg had no student loans for her undergrad schooling, and Chris owed only $17,000 after finishing his masters. But medical school gave them a combined debt of nearly half a million dollars. Meg hopes to work part-time as a pediatrician, so that she can be with their baby more – but that could mean that her salary might only be $40,000/year. Chris, with anesthesia as his specialty, could earn up to $250,000/year, but those days are on the somewhat distant horizon.
With all the talk about national health care and eliminating waste and excess spending in our broken health care system, some people assume that doctors are overpaid. On first glance, $250,000/year for an anesthesiologist does seem extravagant. But if we want to cut back on medical spending, we need to take a closer look at how doctors are trained and who pays for their education. The vast majority of new doctors are saddled with huge student loans. And almost without exception medical residents work ridiculous hours for very low pay (Chris and Meg work for about $12/hour if you look at their salaries and the number of hours they work). Once a doctor has been practicing for 20 years, the picture is obviously going to be rosier – higher pay, better hours that come with more seniority, and medical school loans probably paid off. But the price to break into the profession is a steep. According to a current US News and World Report listing, the average medical school loan is now $100,000. Closer to home, Graduates of the University of Colorado Health Sciences Center can expect to have over $118,000 in medical school loans.
If we want to cut health care spending, perhaps one of the things we need to look at is how we train doctors. If new doctors didn’t graduate with hundreds of thousands of dollars in loans and work for peanuts for their first few years after med school, maybe they wouldn’t need $250,000 salaries.
This is the hidden cost of medical salaries. The education debts, opportunity cost, long training should all be factored in when considering a doctor’s salary.
I do NOT agree that the cost of education should factor into what a physician is paid. Consider: veterinarians graduate with equivalent educational debt (current average $100K+). About half of veterinarians go on to complete specialty training, equivalent to a medical residency. But the average salary for all veterinarians (around $84K) is lower than the average salary of a physician, dentist, podiatrist, optometrist, pharmacist (we beat psychologists by a hair). The average starting salary for a new graduate veterinarian is around $50K, but it won’t spike like that of a new graduate physician after completion of a residency.
Most veterinarians didn’t enter this profession for the money, obviously. And most don’t have any expectation that their clients will pay $20,000 for a c/s in a dog, even though that’s what it cost one of my human friends.
So I have no sympathy for physicians with educational debt, “struggling” to survive on $250K. They chose their profession, just as I chose mine. Stop whining!
The couple described above managed to accrue more than twice the average educational debt (almost $250K each vs. $100K each). How, I do not know, and I do not care. And I’d love to know why they think it’s a fine idea to have a child immediately (rather than work and pay down some debt). That was also their choice. Live with it.
Outrider:
I don’t think anyone is suggesting we feel sorry for doctors. The problem is with demonizing them for their supposedly massive profits and using that falsehood to convince American citizens to bring the force of government to bear on these people. Are you in a job where the government sets your salary? Does the government penalize you by lowering your expected compensation if you try to please your customer instead of the government?
This is what is being proposed for doctors, and when it happens, they won’t just whine; they will exit the medical profession en masse as well they should.
Jan 7th, 2008 at 9:05 pm
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