PA vs Med finances

[Yadster101]

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So I'm looking to advise a family that is encouraging their son to go to med school. The son applied to PA and med and has gotten into 1 med school and a few PA schools. I've told them that in the end the final product is very different because docs do a residency. They seem to completely understand that if you want the best training available, then med school is the clear winner.

I also spent ~5 mins running the numbers from a financial perspective. I thought that even a FM doc would come out way ahead of a highly paid PA (EM, surgery, etc.). But I was surprised to find that the doc would not break even until 38. By age 50 the doctor would be about 600k ahead, which really is not that much. When you consider that the PA can invest money at an earlier age, that 600k is much lower.

The numbers I used were:
PA debt: 60k VS Med debt: 200k
Age starting school: 24
PA salary 88k for 4 yrs, then ~125k for rest of career. For Med I did 50k*3yr for residency and then 200k for rest of career.

Did I do something wrong w/ my calculations? I thought for sure that the doc would come out financially ahead by 35-40yrs/old and then just up from there?

 

[Gosondth]

Does your math include difference in tax brackets? Gap may even be smaller.

 

[PL198]

Present value.

 

[tymont12]

You need to account for compound interest from investing. That 600K at 50 years old will grow quite sizably till they hit 60, 65....

However, I find it more important that the student knows whether they want to work for a physician / handle less complex cases, or do they want to be running their own practice, performing their own surgeries, etc.

 

[Mad Jack]

One thing you should look more closely at is the number of PA graduates versus the projected growth of the profession. Barring some unforseen circumstances, PAs are likely going to have supply outstrip demand within the next decade unless demand substantially outstrips the present levels. Another factor is upward mobility- physicians can become medical directors and high level administrators, faculty, etc, paths that are largely closed to PAs. Finally, there's the effects of health care reform. When wages fall, they'll fall for everyone, but a the people in charge tend to cut employee pay before they cut their own. PAs are employees, ultimately, and will often bear the brunt of cuts.

And this neglects side jobs (I know a guy that pulls 200k in extra income and loan reimbursements working two weekends a month in an extremely rural area), partnership opportunities, ability to own your own practice, ability to enter extremely lucrative specialties, etc...

 

[NaOH]

One thing you should look more closely at is the number of PA graduates versus the projected growth of the profession. Barring some unforseen circumstances, PAs are likely going to have supply outstrip demand within the next decade unless demand substantially outstrips the present levels.

I had wondered when we would start to see this, as popular as PA/NP programs are currently. Even with the momentum towards midlevels as the new PCP, we will hit saturation eventually - we saw the same thing in pharmacy in the late 90s-early 2000s. Sadly, we are beyond saturated and new schools are still popping up like toadstools after a rain.

 

[Mad Jack]

I had wondered when we would start to see this, as popular as PA/NP programs are currently. Even with the momentum towards midlevels as the new PCP, we will hit saturation eventually - we saw the same thing in pharmacy in the late 90s-early 2000s. Sadly, we are beyond saturated and new schools are still popping up like toadstools after a rain.

http://www.amednews.com/article/20110927/business/309279997/8/
https://www.nccpa.net/Uploads/docs/...sicianAssistants-AnAnnualReportoftheNCCPA.pdf
http://www.bls.gov/ooh/healthcare/physician-assistants.htm

They doubled in number between 2000 and 2010, from 40,469 to 83,466, and then jumped again to 101,977 in 2014. That's 252% growth of a profession over 14 years, a rate that is pretty damn unsustainable and can't go on forever. Over 75% of them are under the age of 50, which means that you've got a large, young workforce that's going to keep expanding until it gets crowded like pharmacy. The BLS gives the PA profession a growth rate of 30% between 2014 and 2024, so the field should saturate sometime in the next decade.

 

[PL198]

I had wondered when we would start to see this, as popular as PA/NP programs are currently. Even with the momentum towards midlevels as the new PCP, we will hit saturation eventually - we saw the same thing in pharmacy in the late 90s-early 2000s. Sadly, we are beyond saturated and new schools are still popping up like toadstools after a rain.

why? why is it that these regulatory bodies fail so hard at a simple measure of their constituency?

 

[Rekt]

http://www.amednews.com/article/20110927/business/309279997/8/
https://www.nccpa.net/Uploads/docs/...sicianAssistants-AnAnnualReportoftheNCCPA.pdf
http://www.bls.gov/ooh/healthcare/physician-assistants.htm

They doubled in number between 2000 and 2010, from 40,469 to 83,466, and then jumped again to 101,977 in 2014. That's 252% growth of a profession over 14 years, a rate that is pretty damn unsustainable and can't go on forever. Over 75% of them are under the age of 50, which means that you've got a large, young workforce that's going to keep expanding until it gets crowded like pharmacy. The BLS gives the PA profession a growth rate of 30% between 2014 and 2024, so the field should saturate sometime in the next decade.

Damn. I had no idea the growth was that explosive. I'd be surprised if saturation didn't occur within five years at that rate.

 

[deleted746658]

So I'm looking to advise a family that is encouraging their son to go to med school. The son applied to PA and med and has gotten into 1 med school and a few PA schools. I've told them that in the end the final product is very different because docs do a residency. They seem to completely understand that if you want the best training available, then med school is the clear winner.

I also spent ~5 mins running the numbers from a financial perspective. I thought that even a FM doc would come out way ahead of a highly paid PA (EM, surgery, etc.). But I was surprised to find that the doc would not break even until 38. By age 50 the doctor would be about 600k ahead, which really is not that much. When you consider that the PA can invest money at an earlier age, that 600k is much lower.

The numbers I used were:
PA debt: 60k VS Med debt: 200k
Age starting school: 24
PA salary 88k for 4 yrs, then ~125k for rest of career. For Med I did 50k*3yr for residency and then 200k for rest of career.

Did I do something wrong w/ my calculations? I thought for sure that the doc would come out financially ahead by 35-40yrs/old and then just up from there?

well, you stopped at age 50. i imagine both providers would work an additional ~15 years. that extra 15 years at salary 200K would certainly further differentiate the two

 

[Mad Jack]

why? why is it that these regulatory bodies fail so hard at a simple measure of their constituency?

Because legally all they can do is create standards for their profession. Any school that meets them is required to be given accreditation, per antitrust law. So their only option is to increase standards, risking pushing some more established schools out of business due to unnecessary regulation, or leave them as they are, and risk oversaturation. The best way to get around this whole thing is by requiring some form of GME, as physicians have done, since this limits the job market to a certain size. This still has some flaws, however, as they still will be forced to accredit schools that meet their standards, and thus students will end up graduating with no jobs.

And then there's the whole "accrediting bodies make money on a per-school basis, so why wouldn't they want there to be more schools" side of things.

 

[Dr. Death]

Also the residency may or may not be three years and the medical school debt may be more or less than 200k after figuring in COL. And physician salary could be significantly more than 200k if the person goes into anything remotely competitive or works rural.

 

[Stagg737]

So I'm looking to advise a family that is encouraging their son to go to med school. The son applied to PA and med and has gotten into 1 med school and a few PA schools. I've told them that in the end the final product is very different because docs do a residency. They seem to completely understand that if you want the best training available, then med school is the clear winner.

I also spent ~5 mins running the numbers from a financial perspective. I thought that even a FM doc would come out way ahead of a highly paid PA (EM, surgery, etc.). But I was surprised to find that the doc would not break even until 38. By age 50 the doctor would be about 600k ahead, which really is not that much. When you consider that the PA can invest money at an earlier age, that 600k is much lower.

The numbers I used were:
PA debt: 60k VS Med debt: 200k
Age starting school: 24
PA salary 88k for 4 yrs, then ~125k for rest of career. For Med I did 50k*3yr for residency and then 200k for rest of career.

Did I do something wrong w/ my calculations? I thought for sure that the doc would come out financially ahead by 35-40yrs/old and then just up from there?

Are those debt number specific for the school the person was accepted to or just average estimates? Because there are more than a few PA schools that charge over 60k/year...

 

[MatCauthon]

I think your debt estimates might be a bit low. Most pa programs I saw have a total tuition of at least 90 to 100k. That doesn't count other fees, cost of living, or accrued interest.

200k is a ballpark for medical school tuition without cost of living. Accrued interest can grow quickly especially if not paid down during residency.

 

[Yadster101]

One thing you should look more closely at is the number of PA graduates versus the projected growth of the profession. Barring some unforseen circumstances, PAs are likely going to have supply outstrip demand within the next decade unless demand substantially outstrips the present levels. Another factor is upward mobility- physicians can become medical directors and high level administrators, faculty, etc, paths that are largely closed to PAs. Finally, there's the effects of health care reform. When wages fall, they'll fall for everyone, but a the people in charge tend to cut employee pay before they cut their own. PAs are employees, ultimately, and will often bear the brunt of cuts.

And this neglects side jobs (I know a guy that pulls 200k in extra income and loan reimbursements working two weekends a month in an extremely rural area), partnership opportunities, ability to own your own practice, ability to enter extremely lucrative specialties, etc...

I completely agree that growth of the # of programs is an issue. But isn't this also a problem with med school? According to wiki there are ~18 new med schools since 2010 and many others have increased class size. Aren't docs going to face the same issue? I know the # of residency spots is limited but there are still many unfilled spots. So as more American docs graduate more of these spots will be filled which will lead there to be more physicians on the market...right?

 

[tymont12]

I completely agree that growth of the # of programs is an issue. But isn't this also a problem with med school? According to wiki there are ~18 new med schools since 2010 and many others have increased class size. Aren't docs going to face the same issue? I know the # of residency spots is limited but there are still many unfilled spots. So as more American docs graduate more of these spots will be filled which will lead there to be more physicians on the market...right?

The bottleneck in medical education is not med school, it's residency. Over the years, US MD seniors have had stable match rates but DO vs IMG vs FMG have taken the rest of the open spots depending on the year, specialty, decade, etc. FMG's used to match like crazy back in the 60's, 70s, maybe 80s. Then, DO schools and IMG's became much more common and began to 'supersede' FMGs. I'm simplifying here but the underlying logic holds true.

There's a recent pub in NEJM about how this 'doom and gloom' about med schools / physician training doesn't really pan out.

 

[futuremdforme]

What does the kid actually want to do? The jobs can be similar but they can also be quite different and finances are only one aspect.

 

[jqueb29]

What do your calculations look for the not-insignificant portion of people who graduate debt free?

 

[PhillyMed777]

Your calculation's problem is that the doctor is taking a job at 200k

 

[deleted746658]

Your calculation's problem is that the doctor is taking a job at 200k

?

 

[badasshairday]

PA vs. MD in a nutshell.

From PA perspective.
Earn good money at a much younger age. Much less hoops/BS to jump through. In several popular fields for PA, like ER (which is what derm is to med students), very large scope and autonomy. Less respect, but who cares, since your have less liability and earn good money much sooner with less hoops.

What PA sees doing the MD route.
More hoops to jump through, loads of BS. Many years of training for less money. Ultimately the one responsible when SHTF (poo hits the fan). Much higher income potential. Prestige. Boss. Respect.

 

[White Coat Money]

If the idea is to calculate career worthiness based solely on lifetime net income, then the key is to have the correct numbers for your modeling.

Not sure where you can find the debt and salary info for PAs, but you can get the average MD debt info from AAMC here and an idea of MD salaries by specialty at Doximity's salary map: https://www.doximity.com/careers. If you don't have access to Doximity, you can check out my post on the salary map here.

Does having these numbers change your modeling at all?