Sunday, October 28, 2012

Is it worth it?

I've had a number of people as me if going into medicine is "worth it."  

This is a difficult question for me to answer. I generally waft back and forth with both the pros and cons of the profession, but can't seem to ever answer with a simple "yes" or "no".  

I think the only answer that I feel comfortable with is "it depends."

It depends on a number of variables, some of which you don't appreciate until you've finished training and have the benefit of looking back retrospectively at the whole process.

To keep this particular post from going on too long, I'll direct my thoughts as to whether or not I think it is financially worth it.

For those contemplating going to medical school, I think the biggest obstacle that you need to be fully aware of is the cost.  I've done some back-of-the-envelope math to help you grasp the financial commitment that you're getting yourself into.

Tuition these days generally runs from 30k-60k a year x 4 years = 120-240K.  Tack on modest living expenses for a single adult (add liberally for those of you with families) of about 25K a year x 4 years = 100k.  

Four years of medical school/living expenses will cost you roughly 200-300k.  There will be some outliers both above and below this number, but for the vast majority of people this will be in this range.  Heaven forbid you have a large amount of undergraduate loans in addition to this amount.

Let's assume for simplicity that your 250K in student loans is all federal loans (which is not possible - you're limited to about 30K a year in federal loans, the rest are private loans at a higher rate).  Currently the interest rate is 3.4% and set to increase to 6.8% at the end of this year (you can all thank George Bush for signing the 6.8% into law - and Obama for temporarily lowering it to 3.4% since 2007).  

By the time you finish 4 years of medical school and  3 years of residency, your 250K in loans, with 6.8% interest and assuming no payments have been made during school or residency, will have ballooned to 361K.

So you finish residency and get your first job making $160,000 year (avg starting salary for primary care these days).   Uncle Sam will come by and swipe 30% off the top, and your state tax will be about 5%, leaving you with about $100,000 left.  

That gives you about $8300/month to live off, which seems pretty good.  And that would be good if you didn't have that huge ass debt strapped to your back.

At 361K in debt at 6.8% over 10 years, your monthly loan payment will be $4150.  

That leaves you with $4250/month to live off...for the next 10 years.  That's the equivalent of a $50,000 salary.  

If you stretch that out to a 20 year repayment, you're looking at monthly payment of  $2750/month - FOR 20 FREAKING YEARS.

So back to the question - is it worth it?  It depends.  If you don't mind being a primary care doctor in your early 40's, still living off the equivalent of a $50,000/yr salary, then yes, it's probably worth it.  Your net worth will eventually improve to ZERO during your 40's (ie out of negative territory), after which your significant investment will pay off once you have finally slayed the debt beast and payed off all your loans.  If you continue to work into your 60's, you'll be fine.  

Now, lest you forget, we live in a time of declining reimbursement to physicians while the cost of medical school rises every year.  The time will soon come that unless you have a way other than student loans to finance your debt (scholarships, loan repayment plans, etc), you will be working your entire career to pay off your loans - all the while living off of a very average salary.

Again, if you don't mind living like this, then by all means, follow your dreams.  But if you have any financial sense, you'll quickly realize that this may be financial suicide.

Now hopefully it's obvious why some people out there have such a hard time finding a primary care physician these days.  It's daunting to choose this path when you will be living in indentured servitude for the next 1-2 decades of your life.

But doctor, I love primary care and I don't care what it costs - I want to follow my dream and be a PCP!  By all means, go right ahead.  But realize that this amazing amount of debt with crush your altruism within months, at which time you'll remember my words of wisdom and weep with regret!

If you have your heart set on primary care (which, as an internist, I applaud), I strongly implore you to look into loan repayment options.  This is really the only way that you can temper the crushing debt that will try to ruin your life and still do what you love to do.  There are plenty of programs out there, and while temporarily inconvenient, they may save your financial life.

For those of you going into sub specialties, you'll be much better off financially for the time being, but beware lest you think the current level of reimbursement won't decline in the next few decades.  You have a financial target on your head, and Medicare is dialing in the sights.

So the moral of this post is simple - think long and hard about the financial implications of your decision.  Don't fall into the trap of telling yourself that the level of debt doesn't matter, that you'll be a doctor and somehow things will work out financially.  That's like running out into the street and then looking both ways.  Odds are you'll get creamed.

Take it for what it's worth.  I wish there was an easier way, but it is what it is and it isn't going to change anytime soon.  

Stay tuned - next time I'll look at the other aspects of medicine and tell you if I think it is worth it.


  1. great insight doc! how unfortunate our educational/financial/political system quietly creates huge financial disincentives for our best and brightest to serve in health care. hopefully, there will still be enough good docs like yourself around a few generations from now!

  2. Not if the Democrats have their way.

  3. Radiologist all the way... 650K starting and 10 wks vacation....