Are doctors underpaid?

[Haemulon]

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Agreed. Especially about the time. bear in mind that a six digit salary that doesn't start for a decade or more may be equivalent to a five digit salary in NPV. Meaning someone starting at a much lower salary and working steadily for a decade may make much more than someone starting at a higher salary at a later date. This concept all too often seems to be lost on folks coming right out of college, but it's the concept all of finance is based upon.

You explained this much better than I. Thanks! 👍

 

[Law2Doc]

The insurance companies pay it (and those uninsured are unable to afford to).

Don't be so sure. The number you see on your bill and the number the insurance company actually pays to the doctor are often two very different things. But derms do quite well. Just probably not as well as your bill would suggest. As Haemulon suggested, they may even actually be losing money on you (but making it up on other procedures on other people where insurance companies reimburse for higher amounts). You just won't know from the bill you get whether you are a valuable patient or not, because it's based on reimbursements, not the figures you see or the number of office visits.

 

[atomi]

This entire thread is ridiculous. The consensus is that physicians should make more money because they had to go through a lot of school. That claim has absolutely no merit. The amount of compensation they should receive correlates to the service they offer and the demand for it. Their is no 'fairness-god' out there making sure everybody gets paid according to how long they spent in school. The amount of money you make is correlated to the work/effort you put into your labor. People should think about this before they spend 4 more years in school only to whine about making a measly $150,000 per year.

I have a friend who is 19 and made over $500,000 last year modeling on runways. She barely graduated high school. Is it fair? Who cares, it's no of anyone's business but hers. She has a talent and the market bears what it will for it.

 

[RSAgator]

I think that for someone who right now makes close to 0, 100k is quite a lot. Quite frankly you haven't been through med school or residency, so you can't really call that 100k a lot because you haven't experienced the path it takes to get there. 100k would be a lot to most professions but most professions don't require the same degree of training or take on the same level of responsibility that doctors do. That is why most doctors would consider 100k a very meager salary.

 

[Law2Doc]

The amount of compensation they should receive correlates to the service they offer and the demand for it.

Should, but doesn't. Supply and demand plays no role here. See my posts above. Harping back to supply and demand gets you nowhere in an industry where that model is not applicable.

But even if we were under a supply and demand model, when you create a requirement of a decade or more of school and training for a position, by definition the supply of such trained physicians is going to be very small in comparison to the national healthcare demand. So yes, a long training path merits more money even under a supply and demand notion.
And again $150k a year starting 10 years from now is not equivalent to $150k starting this year. The time value of money is basic finance. Failure to understand this pretty much guarantees you will be robbed blind numerous times in your life.

 

[Bacchus]

I think that for someone who right now makes close to 0, 100k is quite a lot. Quite frankly you haven't been through med school or residency, so you can't really call that 100k a lot because you haven't experienced the path it takes to get there. 100k would be a lot to most professions but most professions don't require the same degree of training or take on the same level of responsibility that doctors do. That is why most doctors would consider 100k a very meager salary.

Oh wise sensei. 🙂

 

[jult24er]

Not the same thing at all. The economic concept of "supply and demand" is premised on the notion that prices are under somebodies control and will be raised to an equilibrium based on supply vs demand. This doesn't work when the bulk of pricing is set by another industry whose goal is to keep the prices lower than the market will bear. Meaning if doctors can't raise their prices and yet insurance companies are lowering them even as demand is exceeding supply, the economic model cannot work. This is what is going on in the world of medicine. At the same time the media is touting a physician shortage, insurance companies are cutting reimbursements. So demand is high, supply is low, and prices doctors can charge are going down. As a consequence, physicians have lost ground against inflation in each of the last ten or so years. So no, this isn't an applicable economic model to point to. This is hardly the "simple economics" model the prior poster suggests. this is a convoluted model where simple economics cannot be applied. Perhaps some extremely complex multivariable economics model can be created to play a role, but I wouldn't bet on it.

Its not a matter of whether the medical world fits some textbook definition of perfect competition. I agree, medicine is not an unregulated market where supply = demand at market price, end of story. Its a matter of weather economic analyses sheds any light on how resources are distributed in the medical world. As a field that is supposed to describe human behavior, it should.

One factor is that the number of physicians the government, lobbied by AMA, will liscence, is restricted. This must put upward pressure on doctors salaries. Another is that, like you say, insurance companies set the price of care, and they pay mostly for procedures. That means there are high incentives to, say, become a GI specialist, and low incentives to spend an hour diagnosing a patient. So maybe we do too many procedures in this country and maybe we have a 'shortage' of PC docs. Just because medicine isnt the widget industry doesnt mean you cant apply economic principles to understanding the field.

 

[Wylde]

I'm considering medicine, but I'm a little reluctant because I have a lot of family financial obligations. On the one hand, I enjoy science, helping people and I've shadowed some doctors... and I could see myself enjoying what doctors do. This summer, I worked in management consulting, and I could see myself also enjoying that.

Somehow the prospect of taking out student loans and going through residency sounds a little daunting? Is this a concern for other people?

I think that doctors, once they reach attending, are fairly compensated (at least specialists, not so much the PCPs). The hours are long, but hours are long in a lot of "successful" careers. A lot of other professions also require at least 4 years after undergrad (research/professor, pharmacist, vet, etc) and it takes a long time for people to work up corporate ladders.

The problem that I see is residency. You basically postpone the pay-check for another 5 years, in which time you could similarly be working up a business ladder or bringing in a steady income in a different field.

If you have serious financial responsibilities for your family, I don't think going directly into medicine would fulfill them. You will be in your very late 20s before you bring in a substantial pay-check. A career in law, engineering (maybe with a masters), business, nursing, pharmacy, dentistry, etc. will probably help your family sooner than one in medicine.

 

[m015094]

This might be a little off topic but I really get pissed off when people say that doctors are overpaid. Health care is a privledge, not a right. People are paying for a service, much like they do when they take their car to be fixed, only Doctors have gone through 12 years of training while a mechanic might have a couple. So in reality doctors cannot be OVERPAID because there is not another job which requires as much training.

Privilege vs right. Yeah, but it's a little bit different than, say, buying a really expensive car. You can always choose to buy a cheaper car, but with medicine you are basically holding the person's continuation at life over their head. So, it's different.

Also, I hear many younger docs complain about pay and they are validated in that opinion because be a doctor offers a much different gross-income vs. age graph, than say and engineer or MBA. Engineers usually can get a well paying job with 4 (or 6 to 8 with PhD) years of education after High School. The salary steadily increases over time. Doctors don't start making the same pay for and addition 4 years AND have about $200K in loans to pay back. BUT, doctors generally make significantly more when they are 40 years old that the engineer or MBA. So, at the end of their lives they will have accumulated more gross-wealth than other professions.

I guess the question is do you want money now, or when you retire.

 

[RSAgator]

Its not a matter of whether the medical world fits some textbook definition of perfect competition. I agree, medicine is not an unregulated market where supply = demand at market price, end of story. Its a matter of weather economic analyses sheds any light on how resources are distributed in the medical world. As a field that is supposed to describe human behavior, it should.

One factor is that the number of physicians the government, lobbied by AMA, will liscence, is restricted. This must put upward pressure on doctors salaries. Another is that, like you say, insurance companies set the price of care, and they pay mostly for procedures. That means there are high incentives to, say, become a GI specialist, and low incentives to spend an hour diagnosing a patient. So maybe we do too many procedures in this country and maybe we have a 'shortage' of PC docs. Just because medicine isnt the widget industry doesnt mean you cant apply economic principles to understanding the field.

The fact that prices are controlled means that a typical supply and demand model doesn't work. How could there be an upward trend in doctors salary? Doctors can only make a certain amount of money for procedures, and they can work a certain amount of hours per day. The price for procedures never rises but it does decrease, and there is a limit to how many hours doctors can work in a day. With THAT in mind tell me where the upward trend in salary is? If the model that you propose is a sensible one, then why have doctors' salaries declined over the past decade when your model says they should rise? Either history is wrong or your model is...

 

[Hurricane95]

I chuckle when I see people who say that there are tons of super easy, simple ways of becoming filthy rich that are "much easier than medicine." If getting rich is so easy...why then isn't everyone loaded? And why are SO many business grads who could easily "get rich" stuck making $30-40k in some ****-hole office, bored out of their minds (not taking into account the unemployed ones). I have a few friends who went the business route to get rich supposedly (are fairly smart guys) and have yet to hold a job longer than 3 months in the time we've been out of undergrad (2 years)...at a maximum salary of $38k.

Granted there are people here and there who, by luck or whatever other means (some of them are actually smart) barely graduate high school and then strike it big and become rich. Sure, medicine is a long tough road, but it's a guaranteed one to at the very least live a VERY comfortable life. The poorest housestaff employed pediatrician makes around at least $100k in most urban areas. Even the poorest of the poor in medicine live well. While most docs yearn to earn more than that, it's a tough argument to sell that you are poor if you are bringing in 6 figures. The ceiling in medicine is not nearly as high as that of other fields (like the select few i-bankers everyone drools over) but the floor in medicine is MUCH higher than in just about everything. Your odds of making a nice living as a doc are more easily within reach as well.

 

[jult24er]

The fact that prices are controlled means that a typical supply and demand model doesn't work. How could there be an upward trend in doctors salary? Doctors can only make a certain amount of money for procedures, and they can work a certain amount of hours per day. The price for procedures never rises but it does decrease, and there is a limit to how many hours doctors can work in a day. With THAT in mind tell me where the upward trend in salary is? If the model that you propose is a sensible one, then why have doctors' salaries declined over the past decade when your model says they should rise? Either history is wrong or your model is...

I don't have a model, and my non-existent model wouldn't say doctors salaries have increased over the past decade if they haven't. All im saying is that supply and demand affect medicine, even if its in a more complicated way then in a perfectly competitve market.

 

[xaelia]

I would recommend graduating college and going out and working, make some money, enjoy your 20s, get married, etc.

Then come back to medical school. A mature perspective will make you a lot more ready to take advantage of the resources at your school - many of my classmates were so burned out from the stress of undergrad, they just partied their way through medical school.

The stressful side of things, then, becomes starting a family during residency...so a lot will depend on having the right spouse. Otherwise, time constraints could do a pretty good number on your marriage.

And, you can't just "make as much money as you want" in medicine. The high-yield specialties are well-known and highly competitive. Most students will end up compromising between something they enjoy, the eventual work hours expected of them, and the financial remuneration. Anyone can open a Botox clinic, though. 😉

 

[Law2Doc]

I chuckle when I see people who say that there are tons of super easy, simple ways of becoming filthy rich that are "much easier than medicine." If getting rich is so easy...why then isn't everyone loaded? And why are SO many business grads who could easily "get rich" stuck making $30-40k in some ****-hole office, bored out of their minds (not taking into account the unemployed ones). I have a few friends who went the business route to get rich supposedly (are fairly smart guys) and have yet to hold a job longer than 3 months in the time we've been out of undergrad (2 years)...at a maximum salary of $38k.

Granted there are people here and there who, by luck or whatever other means (some of them are actually smart) barely graduate high school and then strike it big and become rich. Sure, medicine is a long tough road, but it's a guaranteed one to at the very least live a VERY comfortable life. The poorest housestaff employed pediatrician makes around at least $100k in most urban areas. Even the poorest of the poor in medicine live well. While most docs yearn to earn more than that, it's a tough argument to sell that you are poor if you are bringing in 6 figures. The ceiling in medicine is not nearly as high as that of other fields (like the select few i-bankers everyone drools over) but the floor in medicine is MUCH higher than in just about everything. Your odds of making a nice living as a doc are more easily within reach as well.

A few responses to this: (1) the folks you describe with lower salaries are not those who were competitive for med school. I think the notion is that someone who is smart enough and has the work ethic to succeed in med school ought to be able to make more money elsewhere. Pretty much every physician you meet along the way is going to tell you that medicine is a pretty silly road to take for the money.
(2) most of us know folks who got jobs right out of college that translated to fairly high salaries much sooner than you might make similar money in medicine -- and sooner equals more (the time value of money).
(3) Something with a ceiling in income is by definition not a great way to accumulate wealth. In finance there is a risk reward balance that has to be made. People out for more money tend to be willing to take greater risks, because higher risks and higher rewards go hand in hand. Someone looking for guarantees (no such thing BTW) and safety will never make the big bucks. If Bill Gates wasn't a risk taker, he would have graduated Harvard, gotten some technology job and maxed out in middle management.
(4) People on SDN tend to have blinders on in terms of career path. The knee jerk response is that if they can't go into medicine, then the other high net worth options are only law, I banking. But the truth of the matter is there are literally thousands of jobs out there, and thousands of high net worth individuals in each, even in the most mundane. Some of the richest people are folks who started small businesses and built them up into national entities. McDonalds started as a single small burger shack. Stanley Kaplan started out personally tutoring kids for the SAT. It just takes a good idea and a lot of elbow grease. Few doctors are going to do this well.
So yeah, medicine is a pretty silly path to take if your primary goal is money. There is more elsewhere. In medicine you will spend a decade or more training, only to earn a salary with a fairly fixed ceiling. And this is an industry that has been losing ground against inflation for over a decade, while tuition debt goes up faster than inflation. So you will not do as well in medicine as the prior generation. And a lot of pundits anticipate that it's only going to get worse. So yeah, go into it because it's a job you are going to love. Because you are not going to be keeping up with a lot of the risk takers who forego higher education and get decent jobs or start their own businesses right out of college.

 

[RSAgator]

I don't have a model, and my non-existent model wouldn't say doctors salaries have increased over the past decade if they haven't.

Really? Because I was pretty sure that you said both that because the number of doctors are controlled, salaries can be increased in areas (which they can't because they get paid a set amount for what they do) and that the limited number of physicians "MUST put an upward pressure on doctors salaries." I've already pointed out that this is incorrect because doctors salaries have decreased. What were these claims based on if your model is non-existent?

All im saying is that supply and demand affect medicine, even if its in a more complicated way then in a perfectly competitve market.

Well, that's not all you're saying. You're saying that, which may be true, and you're saying what I wrote above, which is false. If all you were saying was this text I've just quoted, then your post would have been ignored by everyone in this thread

 

[atomi]

But even if we were under a supply and demand model, when you create a requirement of a decade or more of school and training for a position, by definition the supply of such trained physicians is going to be very small in comparison to the national healthcare demand. So yes, a long training path merits more money even under a supply and demand notion.
And again $150k a year starting 10 years from now is not equivalent to $150k starting this year. The time value of money is basic finance. Failure to understand this pretty much guarantees you will be robbed blind numerous times in your life.

By that logic I shouldn't have gone to college and should have just started working right out of high school. And no, healthcare isn't all that different from other businesses. And a long training path does not merit more money. Just because the training is long doesn't mean that there will be fewer people who go through it. The number of people who go through it is determined by the number who are allowed to go through it. If the AMA did not restrict the number of MD graduates, then there would be PLENTY of doctors to meet the demand. So much in fact, that physican's salaries would go down due to increased competition. This is the entire reason the AMA tries to limit the number of doctors, to increase their value in the market. That is because it IS about supply and demand just like everything else. Medicine is not some special profession that is immune to economics.

 

[atomi]

Pretty much every physician you meet along the way is going to tell you that medicine is a pretty silly road to take for the money.

And they would be lying out their arse. Physicians and surgeons are the most highly paid group of professionals in America. End of story. The amount of money you can make with an MD is virtually limitless. I can't give any serious credence to the "poor, poor doctor" argument. It's a financially smart thing to do. Everyone knows it, but a lot of people like to deny it to make themselves feel better about doing it.

You could have a job that pays a very large amount of money with virtually guaranteed job security and the ability to work anywhere you want. But don't do it, it's a stupid decision. Stick to your $70k/year desk job writing financial spreadsheets. You'll be better off in the end. 🙄

 

[Law2Doc]

By that logic I shouldn't have gone to college and should have just started working right out of high school.

Um, yeah, if the income was high enough and your primary goal is money, then yes, you would be better off earning money earlier. This is the basic premise upon which finance is based. $1 today is worth more than $1 a decade from now. This is why lotteries are willing to give you $100000 paid over ten years or something like $300k today -- it's the same amount of money when you factor in net present value.

Just because the training is long doesn't mean that there will be fewer people who go through it. The number of people who go through it is determined by the number who are allowed to go through it. If the AMA did not restrict the number of MD graduates, then there would be PLENTY of doctors to meet the demand. So much in fact, that physican's salaries would go down due to increased competition. This is the entire reason the AMA tries to limit the number of doctors, to increase their value in the market. That is because it IS about supply and demand just like everything else. Medicine is not some special profession that is immune to economics.

Not quite. The long training does in fact serve to limit the number of people going into medicine. As do the various prereqs and other hoops you have to jump through to get into med school. As do the licensing exams. And on top of that, as you mention, the limited number of residency slots (not dictated by the AMA by the way) also inhibits the numbers. And yet with this major constriction of supply and demand rising rapidly, you'd think salaries would go up. But again physician salaries have been the only professional salaries to lose ground against inflation over the past decade. So much for your supply and demand argument. It doesn't hold water. It's not that medicine is immune from economics. It's that the principles you are focused on, supply and demand, are premised on the ability of an industry to set prices. Once this is not there, that particular economic theory cannot be applied.

 

[RSAgator]

And a long training path does not merit more money.

A long training path is not what merits more money, it's the specialization that comes with a long training path that does. PhD's earn more than masters earn more than bachelors because they do jobs that people with less training can't do.

 

[deleted106503]

Alright, this is getting out of hand. I think it's time to wrap this thread up.

As a physician, will you be able to pay back your loans? Yes. Period.
As a physician, will you be able to buy a house? Yes. Period.
As a physician, will you be sued during your career? Most likely. Period.
As a physician, will you be swimming through gold like McDuck? No. Period.

Getting into the economics of healthcare is apparently failing here (as in real life). You don't need to worry about finances as much in this path, but don't think you will be making NBA-player money. Period. Exclamation point. Ampersand. Pound sign. /close thread

 

[RSAgator]

Alright, this is getting out of hand. I think it's time to wrap this thread up.

As a physician, will you be able to pay back your loans? Yes. Period.
As a physician, will you be able to buy a house? Yes. Period.
As a physician, will you be sued during your career? Most likely. Period.
As a physician, will you be swimming through gold like McDuck? No. Period.

Getting into the economics of healthcare is apparently failing here (as in real life). You don't need to worry about finances as much in this path, but don't think you will be making NBA-player money. Period. Exclamation point. Ampersand. Pound sign. /close thread

Right...but are doctors underpaid?


😀

 

[Law2Doc]

A long training path is not what merits more money, it's the specialization that comes with a long training path that does. PhD's earn more than masters earn more than bachelors because they do jobs that people with less training can't do.

It's part and parcel of the same thing. The dude who sticks it out through residency and then fellowship is more specialized in large part by virtue of the fact that he devoted more time to a particular area.

 

[atomi]

Um, yeah, if the income was high enough and your primary goal is money, then yes, you would be better off earning money earlier. This is the basic premise upon which finance is based. $1 today is worth more than $1 a decade from now. This is why lotteries are willing to give you $100000 paid over ten years or something like $300k today -- it's the same amount of money when you factor in net present value.



Not quite. The long training does in fact serve to limit the number of people going into medicine. As do the various prereqs and other hoops you have to jump through to get into med school. As do the licensing exams. And on top of that, as you mention, the limited number of residency slots (not dictated by the AMA by the way) also inhibits the numbers. And yet with this major constriction of supply and demand rising rapidly, you'd think salaries would go up. But again physician salaries have been the only professional salaries to lose ground against inflation over the past decade. So much for your supply and demand argument. It doesn't hold water. It's not that medicine is immune from economics. It's that the principles you are focused on, supply and demand, are premised on the ability of an industry to set prices. Once this is not there, that particular economic theory cannot be applied.

First I understand NPV. Everybody here does. We all went to college. It has absolutely no bearing on a person's life. We're not investments, we're people. The lifestyle you live is directly correlated to your income, not your savings. That's what you're not getting. You're going to lead a miserable existence if you insist on thinking about these kind of things in such a non-human and parsimonious type of way.

Second, I was referring to the number of medical school admittances, not residencies. Just because physician salaries lost ground against inflation does not mean that they have nothing to do with supply and demand. There can always be other factors causing anomalies, but in the end, at the core of any business in this country is supply and demand. I am talking about private practice and not socialized medicine in the form of Medicare reimbursements.

 

[Hurricane95]

A few responses to this: (1) the folks you describe with lower salaries are not those who were competitive for med school. I think the notion is that someone who is smart enough and has the work ethic to succeed in med school ought to be able to make more money elsewhere. Pretty much every physician you meet along the way is going to tell you that medicine is a pretty silly road to take for the money.
(2) most of us know folks who got jobs right out of college that translated to fairly high salaries much sooner than you might make similar money in medicine -- and sooner equals more (the time value of money).
(3) Something with a ceiling in income is by definition not a great way to accumulate wealth. In finance there is a risk reward balance that has to be made. People out for more money tend to be willing to take greater risks, because higher risks and higher rewards go hand in hand. Someone looking for guarantees (no such thing BTW) and safety will never make the big bucks. If Bill Gates wasn't a risk taker, he would have graduated Harvard, gotten some technology job and maxed out in middle management.
(4) People on SDN tend to have blinders on in terms of career path. The knee jerk response is that if they can't go into medicine, then the other high net worth options are only law, I banking. But the truth of the matter is there are literally thousands of jobs out there, and thousands of high net worth individuals in each, even in the most mundane. Some of the richest people are folks who started small businesses and built them up into national entities. McDonalds started as a single small burger shack. Stanley Kaplan started out personally tutoring kids for the SAT. It just takes a good idea and a lot of elbow grease. Few doctors are going to do this well.
So yeah, medicine is a pretty silly path to take if your primary goal is money. There is more elsewhere. In medicine you will spend a decade or more training, only to earn a salary with a fairly fixed ceiling. And this is an industry that has been losing ground against inflation for over a decade, while tuition debt goes up faster than inflation. So you will not do as well in medicine as the prior generation. And a lot of pundits anticipate that it's only going to get worse. So yeah, go into it because it's a job you are going to love. Because you are not going to be keeping up with a lot of the risk takers who forego higher education and get decent jobs or start their own businesses right out of college.

I agree with several of your points, but I guess in reality the only purpose of my post was to point out that there are more (in sheer numbers) docs out there making $200-300k than there are ingenious entrepreneurs rolling in the millions. Few people can argue that making 200-300 grand a year is chump change. Seriously, with a little business savvy and investment a salary like that can provide quite a nice life. And going into medicine is almost guaranteed to get you that kind of salary, whereas graduating high school or college and trying to be that one guy with the breakthrough innovation that will get you rich quick is NOT guaranteed. Your pure chances of making money by going into medicine (good money, not filthy rich, which makes me perfectly happy) are much higher statistically than winging it (banking on some luck mostly) and trying to go the other route to be ridiculously rich. It's just more likely. I never argued that being a doc is a great way to be super rich. Of course it's not. A fixed income of a couple of hundred thousand will take many years to match out what some dude who struck it big makes in one year or less. Becoming a doc to get filthy rich is silly; becoming one and expecting a comfortable life with good money is very reasonable.

 

[RSAgator]

nevermind...I'm gonna go grab a beer.

 

[jult24er]

Really? Because I was pretty sure that you said both that because the number of doctors are controlled, salaries can be increased in areas (which they can't because they get paid a set amount for what they do) and that the limited number of physicians "MUST put an upward pressure on doctors salaries." I've already pointed out that this is incorrect because doctors salaries have decreased. What were these claims based on if your model is non-existent?



Well, that's not all you're saying. You're saying that, which may be true, and you're saying what I wrote above, which is false. If all you were saying was this text I've just quoted, then your post would have been ignored by everyone in this thread

Fine, say a certain procedure pays a certain amount, and you can only do so many in a day, so a physician's salary is capped there. But we double the number of derm residencies and a ton of dermatologists hit the market. Someone keeps their office open on Saturday to attract people who dont want to take a day off from work. Someone else comes up with a better way to do a procedure - less invasive, higher success rate, takes more time. All of a sudden, you have to learn this technique, you do fewer procedures in a day, are working saturdays, and your salary has gone down. There are ways for increased or decreased supply to affect pay even if the price of a certain procedure is fixed. All else being equal, decreased supply equals increased salaries, thats what econ says. Obviously, there are other factors at play that could make salaries go down even as supply decreases. And I'm not sure why you think the supply of doctors has been decreasing. All im saying is that salaries would be lower if more doctors were trained.

 

[lord_jeebus]

I would say that doctors are underpaid, in that they take a relatively small fraction of total healthcare spending, and if they were not restricted by law from collective bargaining, would be able to take more of that.

 

[jult24er]

By that logic I shouldn't have gone to college and should have just started working right out of high school. And no, healthcare isn't all that different from other businesses. And a long training path does not merit more money. Just because the training is long doesn't mean that there will be fewer people who go through it. The number of people who go through it is determined by the number who are allowed to go through it. If the AMA did not restrict the number of MD graduates, then there would be PLENTY of doctors to meet the demand. So much in fact, that physican's salaries would go down due to increased competition. This is the entire reason the AMA tries to limit the number of doctors, to increase their value in the market. That is because it IS about supply and demand just like everything else. Medicine is not some special profession that is immune to economics.

👍

 

[Wylde]

The top engineers, MBAs, lawyers, entrepreneurs, etc. etc. etc. make more than the top physicians.

It still takes 7-11 years post UG to make 6 figures as a doctor. If you spend 11 years in another worthy profession, you will be making good money as well.

A) You can make excellent money as a physician. You'll be richer than most and have almost unparalleled job security, but you'll never be ridiculously rich. It also requires the most time in school to receive this job security, nice pay, and a respectable job.

B) If you are competitive (and smart) enough to become a physician, you can make more money in another field. You will have to work just as many hours and prioritize your job to most other things (just like in medicine), but the ceiling is endless in almost any other field. You basically sacrifice job security in return for less years-in-school and no ceiling.

 

[RSAgator]

Fine, say a certain procedure pays a certain amount, and you can only do so many in a day, so a physician's salary is capped there. But we double the number of derm residencies and a ton of dermatologists hit the market. Someone keeps their office open on Saturday to attract people who dont want to take a day off from work. Someone else comes up with a better way to do a procedure - less invasive, higher success rate, takes more time. All of a sudden, you have to learn this technique, you do fewer procedures in a day, are working saturdays, and your salary has gone down. There are ways for increased or decreased supply to affect pay even if the price of a certain procedure is fixed. All else being equal, decreased supply equals increased salaries, thats what econ says. Obviously, there are other factors at play that could make salaries go down even as supply decreases. And I'm not sure why you think the supply of doctors has been decreasing. All im saying is that salaries would be lower if more doctors were trained.

I wrote a whole long response but I don't want to get dragged into an economics debate so I'll just say this:

Firstly I'm not quite sure why you think that I think supply of doctors has been decreasing because I have never said that.

Secondly, I know how supply and demand works. I don't need an explanation that if you increase supply you decrease salaries and if you decrease supply you increase salaries. I never argued with the former, what I was arguing with is the latter though. If medicine worked like simple supply and demand, then the low number of physicians would allow them to charge far more for procedures than they already do, thus increasing salaries. Since prices are controlled, there is really a limit to how much doctors can make regardless of how high the demand is, thus not following simple supply and demand. Obviously once it gets to the point where all doctors can do to earn more money is work more hours, that probably means that the supply is too low but I wasn't arguing that.

Finally, you can't acknowledge that there are other factors at play but then not take them into account. The concept of supply and demand is a very powerful one, but you're oversimplifying a very complicated situation. Part of that simplification involves using dermatologists as your example (they make much more sense in a supply and demand model than surgeons do). I responded to you in this thread because I thought we were talking about doctors salaries and I disagreed with what you were saying. I have no desire to go back and forth about how supply and demand works because we both know enough about it already and I don't care a lick about economics.

 

[RxAZ]

--

 

[Law2Doc]

The top engineers, MBAs, lawyers, entrepreneurs, etc. etc. etc. make more than the top physicians.

It still takes 7-11 years post UG to make 6 figures as a doctor. If you spend 11 years in another worthy profession, you will be making good money as well.

I agree with your points, but note that this is the knee jerk limited view of careers I was talking about. The top restaurateurs, retail business owners, service providers etc etc also can make more than physicians. But they, as well as some of the fields you mentioned, do it with less training and less debt than physicians. There are better ways to make money if you are willing to put in the effort toward that goal. I spent my prior career representing such types; many weren't brilliant, but they had a nice solid income going since college (if they even went), and channeled the money smartly and in their 20s were already making more money than most docs will make in their 30s, but without the tuition debt. A smart person focused on money has many paths. One that requires huge debt and requires you to stay out of the workforce for over a decade is simply not going to be the highest yield. Ever. Might be the safest path to six digits eventually, but the folks who most want to be rich aren't looking to play it safe, and take the conservative, slow paths. They understand the risk reward balance and that if you aren't willing to make a smart but risky move now and then, you can never reach the big money.

You are likely going to have high school and college friends who took other paths and are driving around in their brand new BMWs in their mid 20s while you are trying to milk one more year out of an ancient Toyota, trust me. We all know these people. A bunch of my college crowd got what I considered modest salaried jobs at financial services companies, but then had a couple of years in a row where they were given three times their salary as a bonus. Most pumped this excess into other businesses or investments and are now making pretty significant non-salary income on top of their salary. Another dude I know from high school started up a restaurant which is now a national chain. I know a person who is making a killing with a chain of upscale hair salons. Many of my former clients started up fairly mundane internet businesses that are now generating several hundred grand a year in profit. The possible ways to make money are endless. The only solace is that folks in medicine can claim they are on a path to do something we really want to do, and something we consider more important. But you can't really claim that a decade long path that may take a quarter of a mill in student loan debt is the best financial opportunity out there. It isn't. Go find a finance professor at your school and he will explain why. Or any doctor -- most will tell you there are smarter ways to make money. You will hear this theme over and over and over...

 

[jult24er]

I wrote a whole long response but I don't want to get dragged into an economics debate so I'll just say this:

Firstly I'm not quite sure why you think that I think supply of doctors has been decreasing because I have never said that.

Secondly, I know how supply and demand works. I don't need an explanation that if you increase supply you decrease salaries and if you decrease supply you increase salaries. I never argued with the former, what I was arguing with is the latter though. If medicine worked like simple supply and demand, then the low number of physicians would allow them to charge far more for procedures than they already do, thus increasing salaries. Since prices are controlled, there is really a limit to how much doctors can make regardless of how high the demand is, thus not following simple supply and demand. Obviously once it gets to the point where all doctors can do to earn more money is work more hours, that probably means that the supply is too low but I wasn't arguing that.

Finally, you can't acknowledge that there are other factors at play but then not take them into account. The concept of supply and demand is a very powerful one, but you're oversimplifying a very complicated situation. Part of that simplification involves using dermatologists as your example (they make much more sense in a supply and demand model than surgeons do). I responded to you in this thread because I thought we were talking about doctors salaries and I disagreed with what you were saying. I have no desire to go back and forth about how supply and demand works because we both know enough about it already and I don't care a lick about economics.

I think whether doctors are 'underpaid' is a silly question. It depends on who you ask. Obviously, medicine is not an unregulated market, and its hard to say if doctors would be paid more or less in one, if one could even exist, and even so, who cares what a free market would pay a doctor, no one has to think thats what a doctor is 'worth.' Obviously, there is no problem attracting people to fill the number of spots available in medicine at current doctor salaries.

 

[BORNagainSTDENT]

I keep hearing people say that doctors are telling their children not do go into medicine.

I wondering if dentists have the potential to make much more money through owning several practices, but then again I would not be satisfied with teeth.

 

[emc2a]

I would say doctors are overworked.

Agreed. Especially about the time. bear in mind that a six digit salary that doesn't start for a decade or more may be equivalent to a five digit salary in NPV. Meaning someone starting at a much lower salary and working steadily for a decade may make much more than someone starting at a higher salary at a later date. This concept all too often seems to be lost on folks coming right out of college, but it's the concept all of finance is based upon.

This concept is really beat to death around here. Everybody understands the time value of money. Most people are intelligent enough here.

Take the 22 year old engineer with an average salary of $85,000 from 22-28 vs. the pediatric dentist who starts at $220,000 when he is 28. Are you really saying that the $35,000 per year that the engineer could save for those 6 years is enough to put him further ahead than the dentist when they both retire at 65? Impossible.

I understand your perspective though being an ex-lawyer. Nobody is debating that there are easier ways to make money in business or law. But those ways aren't usually found doing very honorable things. In both professions, it usually necessarily involves deceiving and ripping others off. Which is why you switched to medicine. Because it is the easiest and most rewarding way to honorably make a lot of money. Welcome.

 

[guestdoc]

I think Law2doc has this one. 👍

Anyone ever think about the years that you are sacrificing? for me, it's going to be around 14 years of the prime of my life (ug to some degree, med school, then residency) where I'm going to be.... studying and learning how to be a doctor! I promise you, a lot of my friends (business, engineering, Law) are going to enjoy those prime years of their life a little more (some of them are enjoying it too much already--not conducive to getting into anything post-graduation, let alone medical school). Can that be factored into the cost of becoming a physician, along with the loans, schooling, etc? I think it should be.

 

[emc2a]

(4) People on SDN tend to have blinders on in terms of career path. The knee jerk response is that if they can't go into medicine, then the other high net worth options are only law, I banking. But the truth of the matter is there are literally thousands of jobs out there, and thousands of high net worth individuals in each, even in the most mundane. Some of the richest people are folks who started small businesses and built them up into national entities. McDonalds started as a single small burger shack. Stanley Kaplan started out personally tutoring kids for the SAT. It just takes a good idea and a lot of elbow grease.

😛

Now your arguments are just turning plain silly. Name at least 1,000,000 such examples. And don't try to tell everybody that these people didn't work even harder than most doctors did in medical school. I guarantee you, they did.

 

[cbrons]

You've got to be joking. Physicians are one of the most highly paid professionals. I would consider (and so would most of the public) many of them overpaid. You need to realize that if you become a doctor, many will look at you with resentment simply because of how much money you make. A dermatologist charges $300 to remove a mole in 2 minutes. $300 for 2 minutes of work and maybe another 5 of paperwork. Oral surgeons charge thousands for routine wisdom tooth removal. The ridiculous insurance system has some blame in this, but these specialists are still making insane amounts of money for relatively simple procedures.

Simple procedures huh?

I'm sure the oral surgeon, who spent a quarter of his life in school/training (paying off hundreds of thousands in loan costs) would have something to say about that but then again if you want to be ignorant, there's plenty of that going around this time of year 👍

 

[Narmerguy]

😛

Now your arguments are just turning plain silly. Name at least 1,000,000 such examples. And don't try to tell everybody that these people didn't work even harder than most doctors did in medical school. I guarantee you, they did.

What on Earth are you talking about? 😕

 

[cleothecat]

In Ontario, heartland of socialized medicine in North America, average Physician incomes in most specialties are much higher than their US counterparts.

Patient volumes are higher, but overheads and collection costs are much lower.

If any hardworking Family Docs in the US want to come north and earn $250K plus, feel
welcome to apply!

If the US docs got themselves organized, they and the American public may actually benefit from a blended Private/Public system.

Of course, job losses in Insurance firms, physician office non-medical staff, and hospital administration would generate huge savings for the US system.

Eh!

 

[circulus vitios]

I don't know how accurate the FM/Pediatrics salaries I hear about are (~$140k and ~$120k respectively), but if they are accurate then I think they're underpaid. A bump up to $175-200k sounds reasonable, since they're the backbone of medicine.

 

[goldenwest]

Well, that's not all you're saying. You're saying that, which may be true, and you're saying what I wrote above, which is false. If all you were saying was this text I've just quoted, then your post would have been ignored by everyone in this thread

Wait, let me get this straight... you're saying that what he said was saying that what you said wasn't said very well? Am I saying that right?

 

[bcat85]

OP, to reiterate:

There are easier ways to make money than becoming a doctor. But.

Becoming a doctor is a surefire way to make money. If you finish medical school and residency, you will make at minimum 100k and likely much more.

 

[dhb]

I have a few friends who went the business route to get rich supposedly (are fairly smart guys) and have yet to hold a job longer than 3 months in the time we've been out of undergrad (2 years)...at a maximum salary of $38k.

smart enough to lie to you: nurses make 60K!! or not as smart as you think...

 

[Josey]

.

 

[Dissected]

Alright, this is getting out of hand. I think it's time to wrap this thread up.

As a physician, will you be able to pay back your loans? Yes. Period.
As a physician, will you be able to buy a house? Yes. Period.
As a physician, will you be sued during your career? Most likely. Period.
As a physician, will you be swimming through gold like McDuck? No. Period.

Getting into the economics of healthcare is apparently failing here (as in real life). You don't need to worry about finances as much in this path, but don't think you will be making NBA-player money. Period. Exclamation point. Ampersand. Pound sign. /close thread

wowww childhood memories!

 

[Pedsbro]

Funny, my husband just received this e-mail the other day...

http://www.healthleadersmedia.com/c...COM&l=1686115_HTML&u=147584592&mid=63619&jb=0

Interesting...