This post concludes the MEconomics series. At first I considered running a few more posts within the series, covering some esoteric topics and case studies of other physicians I know, but I think I'll save these subjects for the future. I would rather stay close to my original intention of having the series focus upon my own financial profile than let it stray into a number of tangential issues.
First, let's have a summary of the Series:
- Part One discussed the commonly-held image of physicians as highly-paid luxury-hounds who have nothing better to do that complain about how little they are paid, when in fact the average physician earns 3.5 to 4x the median U.S. salary.
- Part Two examined the origin and consequences of my medical school debt, and the opportunity cost of attending medical school.
- Part Three spelled out my entry-level and evolving income scenarios, including loan repayment programs, multiple streams of income (i.e. moonlighting), and benefit packages.
- Part Four delved deeply into my first-year and current spending patterns, and revealed how buying a house and investing in my chosen luxuries (alternative energy and local food among them) doubled my monthly expenses. I also discuss the alarming increase in my insurance needs as I have progressed in my career.
- Part Five analyzed the mistaken notion that a person can work until they drop, and provided a starting point for retirement planning. It also revealed that I'm not saving enough for retirement, so I'll have to fix that problem and report back to you about what a good little girl I am.
Second, a few things I've learned by writing MEconomics:
- My own expectations for my professional income were almost as unrealistic as those people who believe doctors live in multi-million dollar homes and drive BMWs. Although I never thought I would live in the lap of luxury, neither did I anticipate how much work I'd have to do just to meet ordinary homeowner's expenses.
- I have a new appreciation for how good my life really is. Writing Part Four reminded me that I've set certain goals for my life and actually met them because I make a good living. This include my solar roof:
- Considering the opportunity cost of medical school, and the less-than-stellar income I earned initially as a primary care doctor, I am convinced that the primary care crisis is indeed well-founded and likely to get worse.
I have a number of FANTASY solutions to some of the problems I've discussed in the series:
- Require medical schools and residency programs to address basic financial management in their curricula. My residency included a professional development course that touched upon financial topics, but I think this type of program should be expanded so that future doctors create a step-by-step financial plan for themselves during their training. It would be an investment of money and time for the medical schools and residency programs, but would produce more finance-savvy physicians.
- Enroll all graduating residents in primary care specialties into loan forgiveness programs. These programs can be tailored to cancel educational indebtedness over shorter or longer periods of time, depending on the practice setting the resident chooses (FQHC vs. private), full-time or part-time practice, and demographics of practice population (urban/suburban/rural). Creating more loan forgiveness options might funnel more people into primary care and help them preserve their personal goals (family leave, professional development, entrepreneurship), which in turn would help retain primary care physicians. Depending on the setting, these loan programs could be funded by federal and state funds as well as contributions from hospitals and private practices--although Stark laws might require that these contributions go through nonprofit organizations before being given to physicians.
- Encourage community healthcare organizations to partner with local contractors to build subsidized housing for brand-new doctors for the first 2-3 years of their practice, in order to offset the impact of the cost of housing on the new physician's budget. This would permit young doctors to build up a savings cushion so they can buy homes in their new community, which will make it more likely for them to stay on after the subsidy ends. (My hospital actually does have a house, owned by one of the staff physicians, they provide to new doctors if it is available. Of course, they need a whole neighborhood of houses to make this attractive to the number of physicians they actually need to hire.)
- Institution of primary care incentive bonuses, adjusted to local cost of living indexes, for doctors working in underserved areas. For example, if I had received $10,000/year as a bonus for working in Rural after the real estate boom, it might have kept me in primary care. This bonus could be delivered in the form of a mortgage credit, rather than cash.
Sometimes, I go off the wall completely and hope that CMS starts compensating primary care docs for cognitive services, but then I go back to work and reality bites me in the butt again.
All fantasies aside, I believe doctors have to begin with their own expectations if they want to be satisfied with their professional careers. Unfortunately, we don't have total control over CMS reimbursement schedules or the industrialization of health care, although it is great to see doctors beginning to advocate for the profession now that healthcare is reaching yet another crisis point. However, even if doctors regain meaningful input into how healthcare is delivered in this country, it will not guarantee satisfaction with their careers, because such satisfaction derives from one's inner criteria for contentment.
By conducting honest inventories of one's own values, goals, ideal workload, and earning potential, I believe anyone can arrive at a comfortable financial set-point in which the amount of money your earn is enough to achieve a life you enjoy. This is the process I have outlined in the MEconomics series, and I hope it serves as an example of the kind of inventory I mentioned above. If you've read the preceding posts in the series, you'll recognize that this process involves confronting questionable past decisions (such as credit card debt, discussed in Part Two), disappointing entry-level incomes (discussed in Part Three), meteoric increases in personal expenses (homeownership and insurance, discussed in Part Four), and the staggering amount of money you'll need if you're ever going to stop working (discussed, ad nauseum, in Part Five). I can tell you from brutal personal experience, this is not an undertaking for the fainthearted. I have cringed many times while writing these posts, not only because of the mistakes I've made, but also because I've been presenting them publicly for you to read. (Who's dumb idea was that?? Oh yeah.)
And yet this has also been a cathartic process, because now I know where I stand financially, what I'm working to achieve, and how much work I need to put in to meet my goals. These are valuable things to understand, because they give clarity to the process of making a living and getting a life. I encourage you to go out and do the same thing. Maybe not publicly, but if you're a better saver than I am, I want to hear about it. I need a role model.