Sunday, March 25, 2007

The Economics of Residency Part II: $5-$20/Hour

There is relatively minor variation in pay between US residency programs and virtually no variation between specialties within the same program. This creates a rather odd pay scenario. After completing four years of medical school, all graduates who enter residency will be paid between $38k and $55k. This varies a little with regards to the military, which pays its residents more (You get to pay it back later, trust me). Most programs are close to $40k. This leaves a pathology resident who is assigned a 40 hour work week with a pay rate of about $20/hour. For our surgeon in a program that is adherent to the 88 hour work week maximum, the rate is closer to $7/hour if overtime were calculated. In a non-adherent program, this can be worse. Thus, a surgery intern may actually make less than the service worker in the cafeteria of the same hospital in which he works. This may actually put some residents below the minimum wage in the state in which they work. Most programs and specialties are in-between, with pay hovering in the $10/hour range. One might ask why this happens and how it is justified. Why do physicians put up with it?

Medical students owe a lot of money. Official numbers are about a $130,000 average per student, but anyone in medical school will tell you that this is misleading. For the most part, students who have to borrow money owe closer to $200,000, with some owing $300,000 plus. Some students are supported, at least in part, by their families, and this skews the numbers down to a less frightening statistic. Upon completion of school, with this crushing debt burden, the only way in which a student can turn this hideously expensive degree into earning potential is with a medical license. The only way to attain a medical license is to enter residency. Thus, most students have no other viable economic option. Most students will then trudge through residency with these debts accruing interest in some form of deferment or forebearance.

Residencies are mostly accredited by the ACGME (American College of Graduate Medical Education), with a few that exist for DO graduates accredited by the AOA. The only way that a residency is considered adequate for licensing purposes is for it to receive accreditation from one of these two entities. This stifles a competative market in post-graduate medical training. As a new physician, I cannot go apprentice with an internist until I am comfortable with internal medicine, as the internist isn't accredited by the ACGME as a residency program. Oddly enough, nurse practicioners(NPs) and physician's assistants(PAs) are allowed to do this. Independent NPs often do go the route of working for a few years under a physician and striking out on their own. This is illegal for a physician to do. A newly minted NP can find a job, usually in the $60-$80k range, work far fewer hours than the resident, and now in many states strike out on his own.

Now, one might think that it is strange for so many highly educated people to allow themselves to be pushed into such low paying jobs for such a long period of time. The fact is, that until recently, residency was almost universally considered to be training, an extension of schooling. The slow evolution of residency requirements meant that most physicians began to view it as a natural extension of the medical school training process. The idea of doing it a different way (which is now done by NPs as well as being done by the MDs of old) was just not on the radar screen at that time. NPs and PAs are a relatively new invention, and MDs were all being forced into residency. Most people viewed residents as highly autonomous students. Today however, the scenario looks a little bit more like this:
If it is in the best interest of the program to call the resident a student, he is a student. If it is in the best interest of the program to call him an employee, he is an employee. Similarly, residents are often, at least perceived, to be exempted from most federal labor protections, because they are considered students. The IRS however, will happily collect FICA from the resident as an employee, without the exemption given to students. Similarly, the legal system will view the resident as a liable practicioner in the realm of malpractice. The program however, will usually not allow the resident final judgement over actions for which he is liable. This is of course, because the legal system, which sees the resident as liable, also sees that attending physician as liable. Basically, whichever term is worse for the resident will be the one applied in any given situation. Oddly, the resident now has far less autonomy than he did when everyone thought he was a student.

To add insult to injury, government payment programs, which have now taken over nearly 50% of medical payments and set all sorts of arbitrary standards that have been adopted by almost all private third party payers, will not usuall reimburse physicians who have not completed a residency. Furthermore, the ususally have to become boarded in a specialty that is considered to be related to any particular medical activity for which they hope to receive compensation. Thus, the option of completing only the internship (or first year of residency) becomes a practical impossibility for most students, forcing them to complete the training. Furthermore, current malpractice law holds most physicians to the "standards of the community," which is a doctrine that often demands the same competence from non-specialists that can be seen with specialists. This essentially prevents a non-boarded physician from trying to sell his somewhat lower level of training for a lower price, because his risk is too high, and malpractice insurers will often not cover his performance of most medical activites for which a specialty exists in the area.

So you might be asking, "do you think that residency should exist at all?" You'd be surprised to hear that my answer is yes. This is an issue of force and supply and demand. My problem is with the former interfering with the later. I'll address the impact of government payers and board certification on the supply and demand associated with post-graduate medical training in my next post.


Blogger Kellie said...

I dropped by from I used to want to be a doctor but I have changed my mind. I think I will go into debt by buying designer clothes and drugs instead. Just kidding. I had no idea before seeing these sites what all this entailed. One of my profs warned me, "Lack of sleep makes you mean. Med school isn't for you." My mentor suggested I do some kind of bio-feedback instead so that I am working with patients and doctors and selling the patients on good health and supporting the doctors-- he said that genuine understanding between both will be a bigger help than me becoming a doctor and counseling as I'd probably wind up doing. I have given birth nine times, loved my OBs (except the midwife-- she was weird and as I have found out, an exception) and I feel really bad for my pregnant moods and making my doctors deal with my indecisiveness and hissy nature when in that state. Thanks for the blog-- I wish more people were informed. People complain about doctors having God-complexes and I think about how we much we demand and want them to play God, yet expect them to be saints, then it takes forever to pay off our bills and speak ill of you when, of our 100 demands, one thing doesn't go as we'd wanted. I'll never speak badly of a doctor again. You deserve way better than you get!

2:37 AM  
Blogger MiamiMed said...

Thank you for your reply.

I think that one of the big problems is that doctors often seem to get stuck in the same conundrum that you mentioned, with a desire mixed between wanting to be almost godlike and consistently succumbing to human frailty. We would be much better off if we simply accepted and expected respect for the virtues and skills we really do have. I think that somewhere within this giant mess, we really do learn quite a bit.

7:53 PM  

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