Differing Levels of Compensation for different specialties

[rs2006]

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Hi all,

I hope everthing is well for everyone in the forum. As a fourth year medical student preparing to start the residency application process, I wanted to know if anyone knows how the compensation system works in our healthcare system for different specialties since I have noticed that for example anesthesiologists make a large amount of money for seeing fewer patients despite their issues with CRNAs vs many subspecialties of internal medicine (with the exception of GI/Cards) who see many more patients per hour/day vs general surgeons (who are not well compensated despite the fact that they do procedures)-- is there something that is driving this? Also, where do you guys feel the compensation scheme is going to go in the future?
Any thoughts would be appreciated. Thanks

 

[(nicedream)]

Hi all,

I hope everthing is well for everyone in the forum. As a fourth year medical student preparing to start the residency application process, I wanted to know if anyone knows how the compensation system works in our healthcare system for different specialties since I have noticed that for example anesthesiologists make a large amount of money for seeing fewer patients despite their issues with CRNAs vs many subspecialties of internal medicine (with the exception of GI/Cards) who see many more patients per hour/day vs general surgeons (who are not well compensated despite the fact that they do procedures)-- is there something that is driving this? Also, where do you guys feel the compensation scheme is going to go in the future?
Any thoughts would be appreciated. Thanks

There is a matrix - Medicare assigned a "value" to every procedure done by every specialty, and compensation for each procedure/office visit is dictated by this value. Compensation changes each year - there has been a scheduled decrease in compensation every year that has been thrown out by congress at the last minute each time. There's supposed to be a big one coming this year that physicians are concerned about.

 

[fantasty]

I'd add that the value depends on several factors, as well. But, having more billable procedures seems to increase compensation. We also get paid for the number of documented systems covered (at least, we were told that doctors should document at least 3 systems in the ROS to receive full compensation for a visit). And, I think malpractice insurance is a factor in the wages one earns (specialties with more malpractice are generally receive higher wages to account for the money they have to pay out).

 

[Lonestar]

Dr. rs2006,

good question. Answer is --- there is no method to the madness. There is one certainty. With this sham of a system, the gov can and will control all reimbursements in all medical specialties. BTW, reimbursements in all fields have been steadily declining. BUT the cost to the patient is going up? Who's running away with the money? My answer (too many middle people who have nothing to contribute to the patients well being) Physicians are having their hard earned money stolen from them right underneath their noses. AND THEY CAN'T DO ANYTHING ABOUT IT. Welcome to the mess that is healthcare of today.

Anesthesia, in general, does a lot of procedures. That is the nature of the specialty. Hence, the higher pay. Add to that the low supply of anesthesia personnel and high demand for outpatient procedures; and you now have a high income specialty, regardless of midlevel providers.

 

[rs2006]

Hi all,
Thanks for the input and I welcome anymore. In light of the above comments from you all, I was would be grateful if anyone could give some input as to how they see the future for physicians given the reality that the baby boomers will reach retirement age (65-- and thus will receive medicare and require social security and the reality of the rising cost of healthcare/health insurance)? Also, does anyone have any ideas as to which specialties they think will "be immune" to these realities (excluding derm, of course)-- As I wrote in my previous post, I have been between anesthesia and internal medicine (I like both equally), but have come to accept the fact that anesthesiology is one of the few specialties in all of medicine that makes a ton of $$ and that I will likely have to struggle financially to keep afloat as an internal medicine doc even though the anesthesiologists have CRNAs who do exactly the same job at a fraction of the cost (please, sorry anesthesiologists, I do not mean to start a war), but given all of this how do you guys see compensation changing in the future?

Sorry for the rambling, but any thoughts from you experts would be much appreciated as I am a confused med student!!
Thanks.

Dr. rs2006,

good question. Answer is --- there is no method to the madness. There is one certainty. With this sham of a system, the gov can and will control all reimbursements in all medical specialties. BTW, reimbursements in all fields have been steadily declining. BUT the cost to the patient is going up? Who's running away with the money? My answer (too many middle people who have nothing to contribute to the patients well being) Physicians are having their hard earned money stolen from them right underneath their noses. AND THEY CAN'T DO ANYTHING ABOUT IT. Welcome to the mess that is healthcare of today.

Anesthesia, in general, does a lot of procedures. That is the nature of the specialty. Hence, the higher pay. Add to that the low supply of anesthesia personnel and high demand for outpatient procedures; and you now have a high income specialty, regardless of midlevel providers.

 

[skypilot]

Well if you are struggling to keep afloat as an internal medicine doc making $160k per year you need to take some finance courses. 🙂 The big money in your life will not be made in salary it will be made in wise investments in businesses and in real estate.

 

[(nicedream)]

Well if you are struggling to keep afloat as an internal medicine doc making $160k per year you need to take some finance courses. 🙂 The big money in your life will not be made in salary it will be made in wise investments in businesses and in real estate.

Well, it depends on your debt. The scary thing is according to financial aid calculators, with $200k in debt you would need to make $200k/year to pay it off. It says you could make $175k and pay it off but you may struggle!

 

[Dave2K]

Well, it depends on your debt. The scary thing is according to financial aid calculators, with $200k in debt you would need to make $200k/year to pay it off. It says you could make $175k and pay it off but you may struggle!

No offense, but this is not true at all. Go to any reputable loan repayment calculator, and you'll find that 200k at 5% (What do you mean you haven't consolidated your loans yet!?!) repaid over 30 years (the Extended repayment plan) comes to $1074 per month. That's roughly 13k per year in loan payments, not counting any tax savings you may see from your loan payments.

So, a better way to look at your loan repayment is to simply subtract 13k from your gross salary. A highly paid specialist drops from 300k/yr to 287k/yr. An average-earning doc drops from 150k/yr to 137k/yr. The lowest full-time physician salaries I've seen reported are around 75-80k. That essentially becomes 60k/yr. Yes, 60 thousand per year doesn't seem like a lot considering the long road you put in to be a doctor, but this is about the worst-case scenario for finances, and you need to realize that most people in this country still live on far less.

If you wanted to drive a Maserati and live in a huge mansion on the beach, it's not too late to go into investment banking. If you want a comfortable income, medicine is still a great choice.

 

[Solideliquid]

I really have to agree with you Dave.

I am going into psych (last MS IV elective, yay) next year. Even with $300K + 5% over 4 years of residency... divide by 10 years of repayment = approx $45000/yr of repayment. Lets say I make $150,000/yr (doubtfully I will be making this much after 3 years of practice more like around $200k, but lets keep things simple), add my wife's salary of $50000. Take away the $45000 and you get $155,000. Not too bad, and don't forget to consolidate your loans, decreasing your monthly payment over-all.

So things are not too bad, even with a max amount borrowed.

 

[skypilot]

No offense, but this is not true at all. Go to any reputable loan repayment calculator, and you'll find that 200k at 5% (What do you mean you haven't consolidated your loans yet!?!) repaid over 30 years (the Extended repayment plan) comes to $1074 per month. That's roughly 13k per year in loan payments, not counting any tax savings you may see from your loan payments.

So, a better way to look at your loan repayment is to simply subtract 13k from your gross salary. A highly paid specialist drops from 300k/yr to 287k/yr. An average-earning doc drops from 150k/yr to 137k/yr. The lowest full-time physician salaries I've seen reported are around 75-80k. That essentially becomes 60k/yr. Yes, 60 thousand per year doesn't seem like a lot considering the long road you put in to be a doctor, but this is about the worst-case scenario for finances, and you need to realize that most people in this country still live on far less.

If you wanted to drive a Maserati and live in a huge mansion on the beach, it's not too late to go into investment banking. If you want a comfortable income, medicine is still a great choice.

Not to mention that student loan interest may be tax deductible and also you will have the opportunity for loan payback in a lot of places if you are in primary care.

You will be able to pay off your loans no problem as long as you don't go out and buy a Mercedes your first year out of residency. Just hunker down and pay them off.

 

[(nicedream)]

No offense, but this is not true at all. Go to any reputable loan repayment calculator, and you'll find that 200k at 5% (What do you mean you haven't consolidated your loans yet!?!) repaid over 30 years (the Extended repayment plan) comes to $1074 per month. That's roughly 13k per year in loan payments, not counting any tax savings you may see from your loan payments.

So, a better way to look at your loan repayment is to simply subtract 13k from your gross salary. A highly paid specialist drops from 300k/yr to 287k/yr. An average-earning doc drops from 150k/yr to 137k/yr. The lowest full-time physician salaries I've seen reported are around 75-80k. That essentially becomes 60k/yr. Yes, 60 thousand per year doesn't seem like a lot considering the long road you put in to be a doctor, but this is about the worst-case scenario for finances, and you need to realize that most people in this country still live on far less.

If you wanted to drive a Maserati and live in a huge mansion on the beach, it's not too late to go into investment banking. If you want a comfortable income, medicine is still a great choice.

I was using this calculator: http://finaid.org/calculators/loanpayments.phtml

 

[Hockeyguy]

Hi all,
Thanks for the input and I welcome anymore. In light of the above comments from you all, I was would be grateful if anyone could give some input as to how they see the future for physicians given the reality that the baby boomers will reach retirement age (65-- and thus will receive medicare and require social security and the reality of the rising cost of healthcare/health insurance)? Also, does anyone have any ideas as to which specialties they think will "be immune" to these realities (excluding derm, of course)-- As I wrote in my previous post, I have been between anesthesia and internal medicine (I like both equally), but have come to accept the fact that anesthesiology is one of the few specialties in all of medicine that makes a ton of $$ and that I will likely have to struggle financially to keep afloat as an internal medicine doc even though the anesthesiologists have CRNAs who do exactly the same job at a fraction of the cost (please, sorry anesthesiologists, I do not mean to start a war), but given all of this how do you guys see compensation changing in the future?

Sorry for the rambling, but any thoughts from you experts would be much appreciated as I am a confused med student!!
Thanks.

just my .02 cents as a fellow fourth year med student. in 98 when i told a college advisor that i wanted to go to med school he tried for six months to talk me out of it. what stands out most was when he gave me an article, from newsweek, that stated medicine was not sustainable and that by no later than 2000 - 2001 the whole system would totally implode. well i went to med school anyway and here we are coming up on 2006 and people are still making a decent living. medicine salaries really skew peoples perceptions - a salary of greater than 200K is more than most others will make. just look at department of labor stats.

taking it a step further i am trying to match anesthesiology. all i hear about from people when i tell them i am going into it is watch out for these CNRAs! i was in case with a peds anesth fellow who already locked a job next year in nevada starting her at 400K w/ 1 month vacation. huh sounds terrible i hope she can pay back her 100K in debt sometime in the next ten years. poor thing maybe she can live with her sister the teacher who makes 42k/ a year.

 

[Dave2K]

I was using this calculator: http://finaid.org/calculators/loanpayments.phtml

I checked this site, and you are right, they do state "You may have financial difficulty...blah blah blah" making $175k/yr. But that is assuming an 8.25% rate (again strongly arguing for consolidation!), and a 10-year repayment plan. Try filling it out with 5% and 30 years like I mentioned and the results should seem less terrifying.

I think this calculator does a huge disservice for people who just take that result on face value without considering what it means. True, if your revolving, or credit card debt is greater than 15% of your gross income it means you could be in financial trouble. But for educational debt, this totally ignores the fact that you are (OK, you SHOULD BE) making a much higher salary.

Imagine this scenario: Would you rather pay 1% of your gross annual salary to pay off your loans, or 10% of your gross salary? Whoops, trick question. What if I told you this was 1% of 28,000 or 280/year to pay for your training at McDonald's University to make you a manager versus 10% of 400,000 or 40,000 per year to pay off your loans as a Cardiologist. Now which would you rather pay? Sure, you pay a larger percentage, but also of a much larger pie. Medical school is still a great investment no matter how you look at it.

If you want a nearly-foolproof plan to retire rich as a doctor, here it is: As a resident, you live "poor" earning only 40k/yr, give or take. When you graduate residency, and finally earn the big bucks as an attending, treat yourself to a 50% increase in standard of living. Live on 60k/yr. Do this for 3 years. In those 3 years, invest ever single penny of the difference. Here I can't help you, get a financial advisor. Personally, I recommend stocks and real estate as a quick suggestion. After these 3 years, you will have paid off all your debts and socked away a huge amount of money. Now, live on the full amount of your salary, saving and investing a "normal" amount.

If you cannot stick to this plan because you just can't bring yourself to keep driving your old car and not have the big house on a golf course like all of your partners, then your lifestyle is getting in the way of your retirement, and don't come crying to me when you're still working your butt off at 70. Besides, you'll have a hard time finding me. I'll be on my boat in the middle of the Caribbean! 😀

 

[NinerNiner999]

Well stated Dave. Pay it forward and your life will become easier each year...

 

[2006MD]

great posts. Too bad you can't adjust the interest rate on the calculator!!