The Cost of Becoming a Doctor
To begin our examination of doctors’ salaries, let us first look at the real cost of becoming one. According to Medical School Admission Requirements (MSAR), the data warehouse for medical school application services, less than 60 percent of all applicants to MD programs are accepted. This number does not even take into account the number of students that begin their undergraduate career with an intent to study medicine but due to lack of grades or desire, decide to pursue an alternate path. The path of medicine is such an intellectual beatdown that there currently are only 691,400 practicing physicians in the United States, representing about 0.2 percent of the overall population. It would seem fair to say that the difficult journey that accompanies becoming doctor is survived by a small number of dedicated individuals. While it might be difficult to measure the personal cost that being a doctor requires (such as sleepless nights, wasted years in early twenties, stress levels and 100-plus hour work weeks), it is possible to measure the monetary cost. Data uncovered in 2014 shows that the average debt from an undergraduate degree is $29,400 and the additional debt from a medical education runs approximately $170,000. With current interest rates of 6.8 percent, this $200,000 debt can balloon to nearly $280,000 by the time residency is completed. The monthly payment for a fledgling physician to pay interest alone would therefore be $1600 per month.
What Doctors Really Make
The average person does not know that a doctor’s first job after medical school is not well paid. This period of time known as residency lasts approximately four years but it can last upwards of ten years in certain fields. During these transitional years the average salary is in the range of $45,000 to $55,000. This is less than what the average high school teacher makes ($57,000). However unlike high school teachers, residents do not enjoy the luxury of weekends, summers off, or 40-hour work weeks. Instead they are often assigned overnight shifts, poor call schedules (residents are typically assigned skeleton hours on holidays such as Christmas and Thanksgiving), and work weeks in excess of 100 hours. In fact, when the hourly wage is calculated based on clinic hours (which does not include time spent on call or studying at home), residents make approximately $10 per hour.
After residency, a newly hired attending physician is typically paid less than an average physician in the same specialty. However, data on the salaries of new attendings is scant and we are forced instead to look at average salaries. What we can see by examining these numbers is that doctors’ salaries are not quite what the general public believes them to be. In fact, some physicians in traditionally well paid specialities such as general surgery, orthopedics and radiology all saw their incomes dip by greater than 10 percent last year. Many doctors don’t believe that their salaries are adequate. Fifty-four percent of primary care physicians do not believe they are fairly compensated.
What also must be taken into consideration are the additional fees doctors pay for things such as licensure and malpractice, which can reach $20,000 per year in specialties such as OB/GYN — malpractice laws allow lawsuits up to 21 years after birth. And while many proponents of decreased pay-outs to physicians claim doctors rising salaries cause medical expenditures to run wild, they neglect to mention that over the past three years alone there has been a 7 percent increase in cost of living throughout America.
Finally, during the passage of the Affordable Care Act, many politicians spoke on how doctor’s salaries in America are larger than their foreign counterparts. What they conveniently fail to mention is that when we compare other professional salaries, and wage disparities between countries in general, the larger doctor salaries are in line with average wage differences. What this boils down to is that in our free market economy of health care, doctors are paid proportionally equal to their non-doctor counterparts when compared to international standards.
Affordable Care Act: The Change We Wanted?
The full effects of ACA have not yet been felt and it is likely that some parts of the bill will fall by the wayside as few regulators have patience to implement a 2,000-page bill. The ACA promised to reinvigorate the American health care system by providing access and decrease costs. Whether or not it has worked and how that affects doctors is still uncertain. Here are a few bullet points of what the ACA intended to do, and what the actual outcomes have been so far:
- Increase primary care physicians salaries by 10 percent to increase the number of students entering the field and fill vacancies. The number of primary care applicants has risen but a stagnancy in the number of residency positions has limited growth. In addition, salaries have only risen 2 percent over the past two years, far below the intended target.
- Implementing EHR and increasing the number of accountable care organizations to provide cheaper care: The combination of these two factors has caused massive consolidation from private practice to larger care conglomerates. Whether health care costs decline due to this has yet to be seen.
- Value-based payments and the Physician Quality Reporting System (PQRS): Doctors are witnessing an overhaul of their payment system through government-funded programs and it has caused massive expenditures on consulting contracts to keep organizations in line. It has yet to be seen if care improves from these requirements.
While some of these points help to portray the incredibly complex and evolving landscape of physician compensation, it truly becomes overwhelming when we begin to consider what these changes are leading us toward. This future is yet to be determined and it remains largely unseen what will truly happen to physician salaries as we move past 2014.