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Physician's Income: is it a good investment in return?
- Thread starter RetinaTazer
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I really don't feel that article; I've read it in the past and his arguments don't pass water. I highly doubt that most med students are spending 80 hours/week working or studying. Most people take a lot of breaks or waste time. Thus, a 10 ...hour stay at the library is really usually only about 5 or 6 hours spent studying/working. That will change in our third years and residency.
Also, a lot of other careers require or strongly recommend having a masters or doctorate degree. They have debt as well.
A third point is that we will have had to pay for living expenses regardless of attending medical school. If we had made 50,000/year coming out of undergrad (or whatever amount), our net worth will have been reduced by our expenses. When we look at the financial situation of other professions, they have living expenses to contend with also.
Finally, the best way to look at medicine from a financial perspective is to consider the opportunity cost of attending medical school and residency (we could have made a living doing something else during these 7+ years), the debt, and the number of hours spent training. The net present value (NPV), which is just the value of future earnings in today's dollars is still solid for the vast majority of doctors.
A 2004 AAMC article crunched the numbers and having a medical degree is equivalent to having ~1.1 million dollars right now accruing at 6% (they assumed a 6% discount rate, the assumed reduction in value of future earnings. I would have assumed a discount rate of 10% since that is what the S and P 500 has yielded in its long history, but they are more conservative.). This 1.1 million dollars RIGHT now is in addition to the wealth generated by having a bachelor's degree.
Practicing medicine is not something that will yield millions of dollars of pre-tax income a year, but it is a solid, stable, and worthwhile career that will have you in the upper middle class/upper class. It is a good financial investment with great sacrifices; hopefully the help that we offer patients will render the financial analysis moot! 🙂
"When this calculation is made for medicine using a 6% discount rate, the net present value of the investment is $1.1 million for a private medical school education and $1.2 million for a public medical school education. If, instead of going to medical school, one were given a million dollars to invest at 6% interest and pursued a career as a college graduate instead, the financial returns would be roughly the same as going to medical school."
Once you calculate the loss of the best years of your life (your 20's, or at least 7+ years of intense study) the compensation may not be that great, but that is something that is really hard to measure. Was it worth it? A lot of attending's that I've talked to have said, "I'm happy I did it, but I wouldn't do it again."
Also, a lot of other careers require or strongly recommend having a masters or doctorate degree. They have debt as well.
A third point is that we will have had to pay for living expenses regardless of attending medical school. If we had made 50,000/year coming out of undergrad (or whatever amount), our net worth will have been reduced by our expenses. When we look at the financial situation of other professions, they have living expenses to contend with also.
Finally, the best way to look at medicine from a financial perspective is to consider the opportunity cost of attending medical school and residency (we could have made a living doing something else during these 7+ years), the debt, and the number of hours spent training. The net present value (NPV), which is just the value of future earnings in today's dollars is still solid for the vast majority of doctors.
A 2004 AAMC article crunched the numbers and having a medical degree is equivalent to having ~1.1 million dollars right now accruing at 6% (they assumed a 6% discount rate, the assumed reduction in value of future earnings. I would have assumed a discount rate of 10% since that is what the S and P 500 has yielded in its long history, but they are more conservative.). This 1.1 million dollars RIGHT now is in addition to the wealth generated by having a bachelor's degree.
Practicing medicine is not something that will yield millions of dollars of pre-tax income a year, but it is a solid, stable, and worthwhile career that will have you in the upper middle class/upper class. It is a good financial investment with great sacrifices; hopefully the help that we offer patients will render the financial analysis moot! 🙂
"When this calculation is made for medicine using a 6% discount rate, the net present value of the investment is $1.1 million for a private medical school education and $1.2 million for a public medical school education. If, instead of going to medical school, one were given a million dollars to invest at 6% interest and pursued a career as a college graduate instead, the financial returns would be roughly the same as going to medical school."
Once you calculate the loss of the best years of your life (your 20's, or at least 7+ years of intense study) the compensation may not be that great, but that is something that is really hard to measure. Was it worth it? A lot of attending's that I've talked to have said, "I'm happy I did it, but I wouldn't do it again."
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I do think doctors should be paid what the market will bear, which is more than what physicians are compensated currently, I believe.
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What a bad article and calculation. He says stuff like
He also doesn't factor in the time teachers have to spend with making their lesson plans, staying after school for tutoring, parent teacher conferences and grading assignments.
Also many physicians get benefits such as health care and pensions. Also they can work in an underserved area for a few years to eliminate their debt.
He also doesn't factor in the time teachers have to spend with making their lesson plans, staying after school for tutoring, parent teacher conferences and grading assignments.
Also many physicians get benefits such as health care and pensions. Also they can work in an underserved area for a few years to eliminate their debt.
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The reason that the market could bear greater salaries is because government backed licensing artificially limits the supply of physicians. If anyone could practice medicine (and perscribe medication) then thousands of 'doctors' who would be infinitely less competent that NPs would crash the market and our salaries. You can't hide behind government regulation and intervention when its convenient (no one can do your job without your credentials) and then act shocked when the government also wants some say in your salary.
I only partly agree with you Perrotfish.
The restrictions on the possibility to perform as an accredited physician is in fact not in favor of the scientifically educated med school graduates but in favor of the possible "customers". Government restricts the access to this market in order to save "customers" from the painstaking (and for some surely lethal) process of becoming convinced only to entrust their health issues to scientifically trained performers. In the longterm there would be only marginal competition by some bogus practitioners without a formal education.
Such a situation does in fact exist in Germany where besides science based medicine there are so called "Heilpraktiker" (that means "healing practitioners"), who do not have a regular and evidence based education. Nonetheless the primacy at least in economical terms of school medicine is not endangered.
On the other hand I have encountered personally two cases, in which the trust in such bogus demanded the life of two clinically treatable cancer patients. So any reasonable Government better puts a ban on such fraud.
The restrictions on the possibility to perform as an accredited physician is in fact not in favor of the scientifically educated med school graduates but in favor of the possible "customers". Government restricts the access to this market in order to save "customers" from the painstaking (and for some surely lethal) process of becoming convinced only to entrust their health issues to scientifically trained performers. In the longterm there would be only marginal competition by some bogus practitioners without a formal education.
Such a situation does in fact exist in Germany where besides science based medicine there are so called "Heilpraktiker" (that means "healing practitioners"), who do not have a regular and evidence based education. Nonetheless the primacy at least in economical terms of school medicine is not endangered.
On the other hand I have encountered personally two cases, in which the trust in such bogus demanded the life of two clinically treatable cancer patients. So any reasonable Government better puts a ban on such fraud.
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Uggh....again. This has been posted multiple times.
That article is a useless piece of trash that uses absurd numbers without citations to prove a "scientific point" and then talks down to the profession of teaching.
The writer is a Plastic Surgeon who wrote the article to peak interest to sell his new book "Informed Consent." If the book is anything like the article, I have no doubt it sucks.
EDIT: I'm almost tempted to spend the $15 on the book just so I can read it and review it on amazon to save others time and money. I strongly suspect its really really bad.
That article is a useless piece of trash that uses absurd numbers without citations to prove a "scientific point" and then talks down to the profession of teaching.
The writer is a Plastic Surgeon who wrote the article to peak interest to sell his new book "Informed Consent." If the book is anything like the article, I have no doubt it sucks.
EDIT: I'm almost tempted to spend the $15 on the book just so I can read it and review it on amazon to save others time and money. I strongly suspect its really really bad.
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