Do Economic Recessions Affect Availability of Residency Spots?

[Undes1]

Curious if anyone that went through the match process back in the Global Financial Crisis 2007-2009 remembers if there were suddenly a lack of available spots? Or If Residency programs in general got shutdown due to the financial situation?

The network new reporting on the state of the economy has worn me down and started getting me worried about a possible recession or otherwise economic downturn next year...

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[NotAProgDirector]

In general, no. Residency spots are funded by CMS and the funding is "hard coded" in legislation, so it's not subject to the federal budget or partisan bickering. In general, hospitals do OK in recessions. Might downsize admin staff or others, but residents are essentially paid for. Is it possible that a severe economic downturn would force an entire hospital into bankruptcy? Sure, but unlikely.

 

[aldol16]

The number of spots is determined by the number of positions that CMS will fund. It's hard to take away spots, although it's entirely possible that an entire hospital will shut down if it runs into solvency issues, in which case the residency program is liquidated. That's a very rare occurrence (though it has happened in recent memory). I wouldn't worry about that though.

 

[Darrow O'Lykos]

As others have mentioned, recessions typically don't impact hospitals/GME programs.

However, here's the AAMC's article regarding when Drexel lost its primary teaching hospital affiliate due to solvency issues in 2019. This was when the economy was doing well, but the hospital still had to close (very unique situation and against the norm for sure).

In short, there's nothing to worry about. But if you're curious what it looks like when a GME program dissolves, read above.

 

[Angus Avagadro]

With rising interest rates, it certainly affects your student loan payments and lifestyle on a residents stipend

 

[voxveritatisetlucis]

One would have to assume a base case of a fair number of graduating medical students going into industry (ie..consulting, pe, vc etc.) instead of gme for this to be true. I don’t know exact statistics, but I believe that this population is fairly small. Thus, there is probably no correlation.

 

[Dral]

While total number shouldn't be affected, it could affect the specialties people go into, thus making it harder to get a spot in one of the specialties that tends to pay higher since they may have a higher number of applicants.

So as an example, there may be a few people who are between peds and radiology for whatever reasons. They may be more likely to go for radiology due to higher pay in that field.

 

[voxveritatisetlucis]

While total number shouldn't be affected, it could affect the specialties people go into, thus making it harder to get a spot in one of the specialties that tends to pay higher since they may have a higher number of applicants.

So as an example, there may be a few people who are between peds and radiology for whatever reasons. They may be more likely to go for radiology due to higher pay in that field.

Or potentially the reverse. Say somebody was going for ent or neurosurgery because his/her spouse had a good enough paying job such that they could afford nice house car etc during med/residency. Suddenly the spouse gets laid off. Suddenly IM EM begin looking more attractive

 

[GoSpursGo]

One would have to assume a base case of a fair number of graduating medical students going into industry (ie..consulting, pe, vc etc.) instead of gme for this to be true. I don’t know exact statistics, but I believe that this population is fairly small. Thus, there is probably no correlation.

In practice, the number of jobs in industry for physicians who are not board-certified in anything and have no clinical expertise to offer from years of at least residency, if not fellowship training, is small. There are probably a handful of med students who independently had expertise in something like engineering prior to med school or who do something cutting edge in an MSTP who could land something right out of med school, but unless you have some amazing connections your run of the mill students probably are not qualified for those gigs.

You might see some established physicians go into industry, however depending on the specialty it might actually be a pay cut.

 

[Chelseadagger]

The number of spots is determined by the number of positions that CMS will fund. It's hard to take away spots, although it's entirely possible that an entire hospital will shut down if it runs into solvency issues, in which case the residency program is liquidated. That's a very rare occurrence (though it has happened in recent memory). I wouldn't worry about that though.

I get that is super rare, but out of curiosity what would happen to current trainees in the program associated with a hospital which shuts down/goes bankrupt?

 

[GoSpursGo]

I get that is super rare, but out of curiosity what would happen to current trainees in the program associated with a hospital which shuts down/goes bankrupt?

They become orphan residents, but usually CMS allows them to take their funding to other programs. So usually they manage to finish their training, as other programs will happily take the extra free/subsidized resident

 

[Undes1]

Thanks for the replies everyone, That all makes me feel a bit better.

 

[FootballAndSkiing]

Or potentially the reverse. Say somebody was going for ent or neurosurgery because his/her spouse had a good enough paying job such that they could afford nice house car etc during med/residency. Suddenly the spouse gets laid off. Suddenly IM EM begin looking more attractive

I think this is the correct thinking, except in my opinion the the timeline is a little long to effect someones decision. The average recession is 2 years, so if the recession hits just as applications start, thus affecting someone's specialty decision, the recession would hopefully be over by the beginning of pgy 2. So this wouldn't make sense. I think this could make fellowships less competitive, people may be deciding to take the attending money rather doing an extra year or two. However I have no idea how the physician job market is effected by recessions. In other fields recessions increase people in school because the job market sucks.

 

[CyrilFiggis]

With rising interest rates, it certainly affects your student loan payments and lifestyle on a residents stipend

It only affects your student loan payments if you are a medical student.

 

[Angus Avagadro]

It affected our payments on our HEAL loan, with variable interest payments. Has something changed? The govt already charges outrageous interest, 6 to 8 %. Are there no more private loans with variable interest?

 

[CyrilFiggis]

It affected our payments on our HEAL loan, with variable interest payments. Has something changed? The govt already charges outrageous interest, 6 to 8 %. Are there no more private loans with variable interest?

HEAL loans ended in 98 so no current residents would have these.

 

[Angus Avagadro]

So all student loans now have fixed rates? If so, I was unaware.

 

[CyrilFiggis]

So all student loans now have fixed rates? If so, I was unaware.

Any federal student loan is fixed.

 

[Angus Avagadro]

And many private medical school loans are variable rate.