Hospital employed vs physician group employed (& PSLF implications)

[Griggsy19]

Dear SDNers,

I will be an MS1 starting next school year and I am trying to understand the mystical public service loan forgiveness (PSLF) program and my future eligibility for it.

To my understanding, PSLF benefits will only extend to physicians directly employed by non-profit hospitals, but not to physicians who are employed by physician groups, even if they are working within these non-profit hospitals. So, if someone plans to take advantage of PSLF, it appears to be to their advantage to be employed directly by a hospital, and to stay away from physician groups.

I suppose my question is, what is the current landscape for hospital-based physicians concerning direct hospital employment vs physician group employment? Are most employed directly by the hospital? Or are most contracted out via physician groups? Are direct hospital employment opportunities hard to find? Are they lesser compensating?

I figure the situation varies depending on specialty. Are there certain specialties that are almost strictly employed by groups rather than hospitals? What are some specialties that have a large amount of hospital-employed job prospects? How does it vary depending on location?

Ideally, I will decide on a specialty where I have a high likelihood of being directly employed by a non-profit hospital so I am able to take advantage of PSLF

Please note that I am not talking about hospital employed vs private practice, I am talking strictly hospital-employed vs physician group employed.

I know that you guys might not have an answer to all my questions, but any insight is much appreciated.

Thank you very much for your help.

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[Wordead]

Likely irrelevant for you if the budget passes and caps PSLF, as it would definitely apply to you as a new borrower.

 

[Griggsy19]

Likely irrelevant for you if the budget passes and caps PSLF, as it would definitely apply to you as a new borrower.

Thanks for the response, but I thinking (and hoping) that you may be incorrect.

Maybe this is untrue, but it appears that the 2015 budget to cap PSLF was never passed. However, I do believe that a similar clause is included in the 2016 budget proposal. To my understanding, if the 2016 budget is passed with the PSLF cap, it would only apply to new borrowers as of 2016 (July 1st, 2016 I believe is the date they like to use). Since my first year loans will be disbursed in 2015, I think I may be grandfathered in, and thus I am hoping the cap would not apply to me. even if passed for 2016.

Realistically, they may scrap the whole PSLF program before I could take advantage of it anyway, especially since I would not qualify until at least 2029, which seems terribly far away. However, as the law currently stands, it seems it wouldn't hurt to be prepared for the best case scenario. Because if 2029 comes and the program still exists, I would regret not properly planning to ensure my eligibility.

 

[colbgw02]

There is way too much variation based on specialty, as you noted, as well as based on geography to give a specific answer - not to mention any information now will be out-dated by the time it's relevant for you. Personally, I can't imagine letting something like this influence my choice of specialty. My advice is to decide what you want to do first, then worry about what sort of practice opportunities exist in that specialty that would qualify for PSLF.

 

[collegestud2013]

As of right now, physicians in private practice groups generally have the potential to earn a lot more than being employed at a hospital, especially once they become a partner in the practice. If this continues, there's a good chance that the extra extra money you make in those settings over a 4-6 year period can be equivalent or exceed the amount of you would save with PSLF. However, this has been changing in the past few years, especially large cities, where large hospitals and large healthcare systems can operate a lot more efficiently due to economies of scale (many of the new government regulations put a lot of additional work and thus overhead costs that small private practice groups are less able to cover) and have forced small private practice groups out of business (the physicians have sold their practices and become employees). These small private practice groups may only be able to survive in small towns and less populated areas where there are no big hospitals to compete with, and in certain specialties where malpractice premiums are low (this is why there are very few neurosurgery private practice groups and most neurosurgeons are employed) or where there is opportunity to do elective, cash-based procedures (anytime insurance is involved, which is in most cases, the big hospitals are going to have the most bargaining power with insurance companies and thus get the most patients). With this trend continuing, there's a good chance that in the future there will be more employed physicians at big hospitals (most of which will be non-profit) except in certain niche sub-specialties or locations. More employed physicians means more people taking advantage of PSLF so I personally think there will be cap on the amount forgiven (I'm predicting significant public criticism once the first round of loans are forgiven in 2017 and some neurosurgeon gets a $400k forgiveness...).

So bottom line is that I wouldn't choose a specialty or practice setting based on its eligibility for PSLF, even if you expect to have a ridiculous amount of loans especially given how uncertain it is at the moment and no one knows if current borrowers would be grandfathered in

 

[operaman]

If you actually read the text of the PSLF, in addition to non-profits, it also includes others who work in industries for the public good, healthcare among them. They even specifically mention nurses and nurse practitioners; one iteration I read listed specific BLS occupation codes which included physicians.

It'll probably still disappear before you can use it, but there's a lot more in it than people realize. The truth is that nobody REALLY knows how this will all play out until the first people apply for it in 2017. At that point, we'll probably start hearing more about how it really works, and that should be during your M3 year in case it does have any impact on your choices.

 

[pd1112]

This is probably in the top 2-3 worst reasons to pick a specialty.

 

[Griggsy19]

As of right now, physicians in private practice groups generally have the potential to earn a lot more than being employed at a hospital, especially once they become a partner in the practice. If this continues, there's a good chance that the extra extra money you make in those settings over a 4-6 year period can be equivalent or exceed the amount of you would save with PSLF. However, this has been changing in the past few years, especially large cities, where large hospitals and large healthcare systems can operate a lot more efficiently due to economies of scale (many of the new government regulations put a lot of additional work and thus overhead costs that small private practice groups are less able to cover) and have forced small private practice groups out of business (the physicians have sold their practices and become employees). These small private practice groups may only be able to survive in small towns and less populated areas where there are no big hospitals to compete with, and in certain specialties where malpractice premiums are low (this is why there are very few neurosurgery private practice groups and most neurosurgeons are employed) or where there is opportunity to do elective, cash-based procedures (anytime insurance is involved, which is in most cases, the big hospitals are going to have the most bargaining power with insurance companies and thus get the most patients). With this trend continuing, there's a good chance that in the future there will be more employed physicians at big hospitals (most of which will be non-profit) except in certain niche sub-specialties or locations. More employed physicians means more people taking advantage of PSLF so I personally think there will be cap on the amount forgiven (I'm predicting significant public criticism once the first round of loans are forgiven in 2017 and some neurosurgeon gets a $400k forgiveness...).

So bottom line is that I wouldn't choose a specialty or practice setting based on its eligibility for PSLF, even if you expect to have a ridiculous amount of loans especially given how uncertain it is at the moment and no one knows if current borrowers would be grandfathered in

Thank you very much for the thorough response.

To everyone else, I would not let this be a major influence on my choice of specialty, but I think its reasonable to at least consider.

Part of the reason I ask this question is that if I am interested in fields where pslf eligibility would be unlikely, I could plan accordingly by taking out the bare mininum loans, aggressively paying down my debt after graduation, make interest payments while in school, etc.

Perhaps these measures would be prudent regardless, given pslf's uncertain future. But, as I (and many of my peers) will surely be strapped for cash while in school, it is tempting to take out some additional federal loans. But the decision of how to proceed depends in part on the potential benefit of pslf vs. the risk of a cap/not being eligible/cancellation of the program.

All-in-all, I am not overly concerned about the whole situation, because I am confident I will be fine no matter what specialty i choose and no matter if pslf can help me or not. But I think having as much information as possible doesn't hurt.