- Email: [email protected]
Economic Impact of Training and Career Decisions on Urological Surgery
Outcomes/Epidemiology/Socioeconomics
Economic Impact of Training and Career Decisions on Urological Surgery Joshua P. Langston, E. Will Kirby, Matthew E. Nielsen, Angela B. Smith, Michael E. Woods,* Eric M. Wallen and Raj S. Pruthi†,‡ From the Department of Urology, University of North Carolina at Chapel Hill, Chapel Hill, North Carolina
Purpose: Medical students and residents make career decisions at a relatively young age that have significant implications for their future income. While most of them attempt to estimate the impact of these decisions, there has been little effort to use economic principles to illustrate the impact of certain variables. Materials and Methods: The economic concept of net present value was paired with available Medical Group Management Association and Association of American Medical Colleges income data to calculate the value of career earnings based on variations in the choice of specialty, an academic vs a private practice career path and fellowship choices for urology and other medical fields. Results: Across all specialties academic careers were associated with lower career earnings than private practice. However, among surgical specialties the lowest difference in value between these 2 paths was for urologists at only $334,898. Fellowship analysis showed that training in pediatric urology was costly in forgone attending salary and it also showed a lower future income than nonfellowship trained counterparts. An additional year of residency training (6 vs 5 years) caused a $201,500 decrease in the value of career earnings. Conclusions: Choice of specialty has a dramatic impact on future earnings, as does the decision to pursue a fellowship or choose private vs academic practice. Additional years of training and forgone wages have a tremendous impact on monetary outcomes. There is also no guarantee that fellowship training will translate into a more financially valuable career. The differential in income between private practice and academics was lowest for urologists.
Abbreviations and Acronyms AAMC ¼ Association of American Medical Colleges MGMA ¼ Medical Group Management Association NPV ¼ net present value VCE ¼ value of career earnings Accepted for publication September 4, 2013. Supported by the National Center for Research Resources and National Center for Advancing Translational Sciences, National Institutes of Health Grant KL2TR000084 (ABS). * Financial interest and/or other relationship with LBS Labcorp. † Correspondence: Department of Urology, University of North Carolina at Chapel Hill, 2113 Physicians Office Building, CB 7235, Chapel Hill, North Carolina 27599 (e-mail: raj_pruthi@med. unc.edu). ‡ Financial interest and/or other relationship with American Urological Association and The Journal of Urology Editorial Board.
Key Words: urology, health care reform, internship and residency, salaries and fringe benefits, career choice
MEDICAL students and residents make career decisions at a relatively young age that have significant implications for the future. Income variability among different specialties is striking, as is the amount of time required to achieve the specialty. While a snapshot of relative income is easily accessible, the impact of lengthy training programs, including fellowship training, on the value of those
earnings is less clear. Because of the significant initial investment of time and accumulated debt, the return on the investment in medical education can be surprisingly modest, especially for nonprocedural fields.1 Recent studies show that the current generation of graduating medical students and, thus, residents are more concerned with lifestyle and income considerations than the
0022-5347/14/1913-0755/0 THE JOURNAL OF UROLOGY® © 2014 by AMERICAN UROLOGICAL ASSOCIATION EDUCATION AND RESEARCH, INC.
http://dx.doi.org/10.1016/j.juro.2013.09.060 Vol. 191, 755-760, March 2014 Printed in U.S.A.
www.jurology.com
j
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ECONOMIC IMPACT OF TRAINING AND CAREER DECISIONS ON UROLOGICAL SURGERY
generations that preceded them.2 These concerns may partially be due to the increasing cost of educational debt.3 Furthermore, the substantial changes to the health care market due to the Patient Protection and Affordable Care Act make the financial implications of a career in medicine increasingly relevant.4 Finally, with projected work force shortages we must ensure that our compensation remains competitive as we seek to attract the best and brightest to our field. During training residents must consider whether to complete a fellowship and whether to pursue a career in academia or private practice. While most residents crudely estimate the impact of these variables, there has been little effort to use economic principles to understand how these factors impact career earnings. Using standard economic techniques we assessed the impact of fellowship training and career choice on earnings, and compared urology career earnings to those of other surgical subspecialties.
MATERIALS AND METHODS NPV and Break-Even Analysis Overview To quantify the financial impact of various career choices we used the concept of NPV, a well established economic tool that provides a metric by which to compare career earnings.1,5e8 The underlying concept is that cash received in the future is not as valuable as the same amount received today, given that money received today can be invested to grow into a larger sum with time. A discount rate is required to find the current value of future income. This rate is one of the variables in our analysis that influences how much future income is worth. For this analysis NPV calculations provide a sum in current dollars of the projected total career income, ie the VCE. Because the VCE can be difficult to conceptualize without context, we also calculated the annual salary differential among various career choices and the breakeven salaries needed to make additional years of training financially neutral. In this analysis we compared the impact of certain variables on the VCE, including 1) the choice of specialty, 2) an academic vs a private practice career in urology and other specialties, and 3) the value of a fellowship in pediatric urology and fellowships in other specialties.
Income Data For resident and fellow income values we used data from the AAMC annual survey, which provides yearly national averages of resident and fellow compensation.9 For academic medicine salaries we used the 2011 AAMC report.10 For private practice values we used the MGMA 2011 survey.11 The AAMC provides average salaries for each level of progression through academic tenure. For our analysis we assumed 7 years at the assistant professor level and 7 years at the associate professor level with the remaining career at the professor level. These estimates were based
on a sampling of American medical schools since published data were not available. MGMA data are divided into compensation by years in specialty, including 1 to 2, 3 to 7, 8 to 17 and 18 years or greater. We mirrored these data in our analysis. MGMA data were also used for salary estimates among the other evaluated medical and surgical specialties. While there are data on multiple subspecialties for many medical fields, pediatric urology is the only urological subspecialty reported. Therefore, we used it for fellowship comparison analysis.
General Career Assumptions Several assumptions were made for our analysis. We assumed that each physician worked until age 65 years and started residency at age 26 years. We also assumed a 5-year residency for urologists. Each additional specialty was based on conventional program duration because published data were not available. Educational debt was considered as an average debt of $166,750 based on 2012 AAMC data.12 This would be repaid during 30 years with a fixed repayment schedule at 6.8%, the current rate for a Stafford Loan,13 and deducted from the yearly gross income. For our standard discount rate we used 6.8%. There is little consensus on the appropriate rate for discounting future payment streams. While many similar studies used 5%,1,5e8 we believe that 6.8% is more appropriate because this is the cost of educational debt. Thus, it is a better indication of the true opportunity cost of deferring income and ultimately the ability to pay off educational loans at this interest rate.
RESULTS Salary Data and VCE As expected, the calculated VCE for various specialties was significantly lower than gross earnings during the course of a career (see table and fig. 1). Salaries increased with time in academic and in private practice. However, in private practice there was an observed decrease in income during the later years of a career. For almost all careers evaluated Value of career earnings VCE ($) Urology: Academic Pediatric Orthopedics: General General academic Sports Surgery: General General academic Vascular Trauma Colon þ rectal General internal medicine General internal medicine, academic Hematology-oncology Cardiology
3,541,345 3,206,447 2,946,391 4,813,603 4,102,945 5,348,529 3,367,472 2,969,038 3,568,446 3,640,766 3,083,969 2,165,588 2,053,045 3,472,902 3,765,402
ECONOMIC IMPACT OF TRAINING AND CAREER DECISIONS ON UROLOGICAL SURGERY
757
Figure 1. Career NPV in dollars
the 8 to 17-year career stage was associated with the highest salary, which then decreased during years 18 or greater. The same pattern was not seen in academic career data, in which salary peaked at the professor level. As the data illustrate, general orthopedic surgery and orthopedic surgery sports medicine commanded the highest overall salaries and VCE. Urology was in the top quartile among the other specialties evaluated. Internal medicine provided the lowest VCE while the medical subspecialties of cardiology and hematology-oncology were similar to urology. Academic and Private Practice Earnings Across all specialties academic careers were associated with a lower salary and VCE than private practice careers. Although some academic positions commanded higher overall salaries, these higher salaries tended to occur at a later career stage. The overall lower VCE for academics highlighted the fact that even a higher median salary late in a career cannot overcome the comparatively lower salary during the early career, given the time value of money. The difference in the VCE between private and academic practice varied a great deal among specialties. The lowest difference was noted for those pursuing a career in internal medicine, equal to $112,543. Among surgical specialties the lowest difference in value between these 2 career paths was among urologists at $334,898. For general and orthopedic surgery the difference was greater at $398,434 and $710,658, respectively.
Fellowship Training Value The cost of fellowship training was a combination of 1) time spent in fellowship, 2) lost income while in fellowship and 3) incremental income achieved as a result of fellowship training. Each fellowship evaluated was associated with significant cost. Pediatric urology was associated with the highest cost because it is a 2-year program and the lost income was high since the fellow would forgo the opportunity to earn a $318,068 salary for 2 years. The cost of internal medicine fellowships was also high because these fellowships are typically 3 years in duration. However, the salary that such fellows forgo as a general internist was much lower than that of a urologist. For example, hematologyoncology and cardiology residents would forgo 3 years of a $166,100 salary. Despite the high cost of these fellowships the net value was generally positive. The only exceptions to this trend were pediatric urology and colorectal surgery. In these instances the fellowship was costly and the long-term value of the fellowship was negative. These specialists earned less than their nonfellowship trained counterparts despite the additional years of training (see table). Break-even salaries further revealed the financial impact of additional years of training in light of the expected future income (fig. 2, A). Consistent with data on fellowship cost (fig. 2, B), this analysis shows the annual salary required to compensate a physician for the lost time and salary associated with a fellowship program. For example, a pediatric urologist would need to earn an additional $38,379
758
ECONOMIC IMPACT OF TRAINING AND CAREER DECISIONS ON UROLOGICAL SURGERY
Figure 2. A, fellowship cost and value. B, break-even salaries. Values are shown in dollars.
in annual salary relative to a general private practice urologist to break even on the fellowship investment. In practice the pediatric urologist actually earns an average of $28,402 less per year than this counterpart. On the other hand, internal medicine fellowships were associated with incremental salaries that far exceeded the break-even point. A cardiology fellow had to earn an incremental $24,739 in annual salary to break even on the fellowship investment. The actual average incremental salary was greater than $194,000 per year. Cost of Additional Residency Training Years Additional years in residency were also associated with a decrease in the value of career earnings. For the private practice urologist an additional year of residency training (6 vs 5 years) caused a $201,500 decrease in the VCE. In terms of break-even salary this equated to $19,010 of additional annual salary necessary to compensate for the single year of delayed income. The cost of an additional year of residency for an orthopedic surgeon and internist was $292,810 and $109,543, respectively.
DISCUSSION Innumerable factors have a role in how an individual chooses and practices a career in medicine or surgery. While long-term job satisfaction and the pursuit of passions remain priceless variables in the decision making process, it is important that graduates today understand the financial implications of their choices. Our analysis tangibly illustrates the variation in income that results from subtle decisions made during medical training. As expected, there is a great deal of variation among different specialties with respect to overall compensation and the VCE. While the monetary value of career decisions is likely not discussed in medical school curricula, a fourth-year medical student may benefit from understanding that the career of a median private practice urologist would have a monetary value about $1.4 million greater than that of a general internist but $1.8 million less than that of an orthopedic surgeon who completes a sports medicine fellowship. Likewise, it is important to understand that choosing longer residency programs is not without monetary cost. Additional training may have value
ECONOMIC IMPACT OF TRAINING AND CAREER DECISIONS ON UROLOGICAL SURGERY
that offsets this cost but such values are difficult to quantify. As senior residents consider a fellowship or career in academic medicine, financial considerations are also relevant. Across the board our data revealed that the value of career earnings was lower in academic than in private practice careers. However, this difference was relatively small compared to differences in overall income and VCE among various specialties. In other words the choice of specialty has a greater impact on career earnings than the choice to pursue an academic or private practice. The financial sacrifice associated with an academic career was highest among surgical subspecialties and lowest for internal medicine. Among the surgical subspecialties analyzed urology appeared to present the lowest opportunity cost for an academic career. The cost of these fellowship training programs is significant and the return is not necessarily positive. For those pursuing a fellowship in an internal medicine subspecialty the net value of a fellowship is higher than that of a surgical fellowship. From a purely financial standpoint fellowships in pediatric urology and colorectal surgery were among the most expensive and added the least financial value to a career. While salary data were only available on pediatric urology, it is reasonable to extrapolate this principle to other subspecialties in urology. Access to information was the greatest of our study limitations. While the AAMC and MGMA data were from widely used, respected sources with
759
large sample sizes, it is not clear how well these data represent the true financial spectrum of the academic and private practice communities. In future analyses we plan to use more robust, focused data sets, although the availability of specialty specific data on urology lags behind that of other fields.6 Also, our results represent career projections that assume a stable income level for physicians during a time of great uncertainty regarding income. However, the true value of our data is in the comparisons among career choices, which is unlikely to change even if physician salaries change across the board.
CONCLUSIONS The choice of specialty has a dramatic impact on future earnings, as does the decision to pursue a fellowship or choose a private vs an academic practice. Additional years of training and forgone wages have a tremendous impact on monetary outcomes. These principles are important for individuals and organizations to understand. Appropriate compensation is needed to recruit and retain talented individuals and these data show wide variability among specialties and subspecialties. While financial compensation is only a single piece of the puzzle, we must remain diligent in understanding the current state of physician compensation to fully understand trends in physician career choices.
REFERENCES 1. Weeks WE, Wallace AE and Wallace MW: A comparison of the educational costs and income of physicians and other professionals. New Engl J Med 1994; 330: 1280. 2. Jurkiewicz CL: Generation X and the public employee. Public Personnel Management 2000; 29: 55. 3. Jolly P: Medical school tuition and young physicians’ indebtedness. Health Aff 2005; 24: 527. 4. The 2011 National Physicians Survey: Frustration and Dismay in a Time of Change. Ann Arbor: Thomson Reuters 2011.
5. Weeks WB and Wallace AE: Financial returns on specialty training for surgeons. Surgery 2002; 132: 795.
10. Report on Medical School Faculty Salaries: 20102011. Washington, D.C.: Association of American Medical Colleges 2012.
6. Gaskill T, Cook C and Nunley J: The financial impact of orthopedic fellowship training. J Bone Joint Surg Am 2009; 91: 1817.
11. Physician Compensation and Production Survey. 2011 Report Based on 2010 Data. Englewood, Colorado: Medical Group Management Association 2012.
7. Prashker MJ and Meenam RF: Subspecialty training: is it worthwhile? Ann Intern Med 1991; 115: 715. 8. Weeks WB and Wallace AE: Return on educational investment in geriatric training. J Am Geriatr Soc 2004; 52: 1940.
12. Association of American Medical Colleges: Medical School Education: Debt, costs, and Loan Repayment. Available at: https://www. aamc.org/download/152968/data/debtfactcard. pdf. Accessed October 2012.
9. AAMC Survey of Resident/Fellow Stipends and Benefits. Washington, D.C.: Association of American Medical Colleges 2011.
13. Federal Student Aid. Available at http://studentaid. ed.gov/types/loans/subsidized-unsubsidized. Accessed August 1, 2013.
EDITORIAL COMMENT While the economic concepts presented are not new, their application to career decisions in urology and choice of fellowship training are novel and thought
provoking. Several findings of this analysis are expected, eg less income in academic vs private practice, while others are relatively surprising, eg
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ECONOMIC IMPACT OF TRAINING AND CAREER DECISIONS ON UROLOGICAL SURGERY
compared to other specialties urology has the least difference in net value when comparing academic and private practice urologists. One of the most interesting findings is the low net value of urology fellowship training. One can only speculate as to why fellowship training in urology has less economic value than fellowships in other surgical specialties but it seems clear that fellowship training is pursued for reasons other than improving salary potential. While it is valuable to understand the impact of specialty choice and fellowship training on lost or future earnings, it is likely that job satisfaction is
a more important factor influencing career decisions. The cost of training and earning potential is important to consider but in this era when career choices are guided more often by work-life balance and time off questions, work gratification may be a more important consideration than dollars and cents. Christopher L. Amling Department of Urology Oregon Health and Science University Portland, Oregon
Economic Impact of Training and Career Decisions on Urological Surgery Joshua P. Langston, E. Will Kirby, Matthew E. Nielsen, Angela B. Smith, Michael E. Woods,* Eric M. Wallen and Raj S. Pruthi†,‡ From the Department of Urology, University of North Carolina at Chapel Hill, Chapel Hill, North Carolina
Purpose: Medical students and residents make career decisions at a relatively young age that have significant implications for their future income. While most of them attempt to estimate the impact of these decisions, there has been little effort to use economic principles to illustrate the impact of certain variables. Materials and Methods: The economic concept of net present value was paired with available Medical Group Management Association and Association of American Medical Colleges income data to calculate the value of career earnings based on variations in the choice of specialty, an academic vs a private practice career path and fellowship choices for urology and other medical fields. Results: Across all specialties academic careers were associated with lower career earnings than private practice. However, among surgical specialties the lowest difference in value between these 2 paths was for urologists at only $334,898. Fellowship analysis showed that training in pediatric urology was costly in forgone attending salary and it also showed a lower future income than nonfellowship trained counterparts. An additional year of residency training (6 vs 5 years) caused a $201,500 decrease in the value of career earnings. Conclusions: Choice of specialty has a dramatic impact on future earnings, as does the decision to pursue a fellowship or choose private vs academic practice. Additional years of training and forgone wages have a tremendous impact on monetary outcomes. There is also no guarantee that fellowship training will translate into a more financially valuable career. The differential in income between private practice and academics was lowest for urologists.
Abbreviations and Acronyms AAMC ¼ Association of American Medical Colleges MGMA ¼ Medical Group Management Association NPV ¼ net present value VCE ¼ value of career earnings Accepted for publication September 4, 2013. Supported by the National Center for Research Resources and National Center for Advancing Translational Sciences, National Institutes of Health Grant KL2TR000084 (ABS). * Financial interest and/or other relationship with LBS Labcorp. † Correspondence: Department of Urology, University of North Carolina at Chapel Hill, 2113 Physicians Office Building, CB 7235, Chapel Hill, North Carolina 27599 (e-mail: raj_pruthi@med. unc.edu). ‡ Financial interest and/or other relationship with American Urological Association and The Journal of Urology Editorial Board.
Key Words: urology, health care reform, internship and residency, salaries and fringe benefits, career choice
MEDICAL students and residents make career decisions at a relatively young age that have significant implications for the future. Income variability among different specialties is striking, as is the amount of time required to achieve the specialty. While a snapshot of relative income is easily accessible, the impact of lengthy training programs, including fellowship training, on the value of those
earnings is less clear. Because of the significant initial investment of time and accumulated debt, the return on the investment in medical education can be surprisingly modest, especially for nonprocedural fields.1 Recent studies show that the current generation of graduating medical students and, thus, residents are more concerned with lifestyle and income considerations than the
0022-5347/14/1913-0755/0 THE JOURNAL OF UROLOGY® © 2014 by AMERICAN UROLOGICAL ASSOCIATION EDUCATION AND RESEARCH, INC.
http://dx.doi.org/10.1016/j.juro.2013.09.060 Vol. 191, 755-760, March 2014 Printed in U.S.A.
www.jurology.com
j
755
756
ECONOMIC IMPACT OF TRAINING AND CAREER DECISIONS ON UROLOGICAL SURGERY
generations that preceded them.2 These concerns may partially be due to the increasing cost of educational debt.3 Furthermore, the substantial changes to the health care market due to the Patient Protection and Affordable Care Act make the financial implications of a career in medicine increasingly relevant.4 Finally, with projected work force shortages we must ensure that our compensation remains competitive as we seek to attract the best and brightest to our field. During training residents must consider whether to complete a fellowship and whether to pursue a career in academia or private practice. While most residents crudely estimate the impact of these variables, there has been little effort to use economic principles to understand how these factors impact career earnings. Using standard economic techniques we assessed the impact of fellowship training and career choice on earnings, and compared urology career earnings to those of other surgical subspecialties.
MATERIALS AND METHODS NPV and Break-Even Analysis Overview To quantify the financial impact of various career choices we used the concept of NPV, a well established economic tool that provides a metric by which to compare career earnings.1,5e8 The underlying concept is that cash received in the future is not as valuable as the same amount received today, given that money received today can be invested to grow into a larger sum with time. A discount rate is required to find the current value of future income. This rate is one of the variables in our analysis that influences how much future income is worth. For this analysis NPV calculations provide a sum in current dollars of the projected total career income, ie the VCE. Because the VCE can be difficult to conceptualize without context, we also calculated the annual salary differential among various career choices and the breakeven salaries needed to make additional years of training financially neutral. In this analysis we compared the impact of certain variables on the VCE, including 1) the choice of specialty, 2) an academic vs a private practice career in urology and other specialties, and 3) the value of a fellowship in pediatric urology and fellowships in other specialties.
Income Data For resident and fellow income values we used data from the AAMC annual survey, which provides yearly national averages of resident and fellow compensation.9 For academic medicine salaries we used the 2011 AAMC report.10 For private practice values we used the MGMA 2011 survey.11 The AAMC provides average salaries for each level of progression through academic tenure. For our analysis we assumed 7 years at the assistant professor level and 7 years at the associate professor level with the remaining career at the professor level. These estimates were based
on a sampling of American medical schools since published data were not available. MGMA data are divided into compensation by years in specialty, including 1 to 2, 3 to 7, 8 to 17 and 18 years or greater. We mirrored these data in our analysis. MGMA data were also used for salary estimates among the other evaluated medical and surgical specialties. While there are data on multiple subspecialties for many medical fields, pediatric urology is the only urological subspecialty reported. Therefore, we used it for fellowship comparison analysis.
General Career Assumptions Several assumptions were made for our analysis. We assumed that each physician worked until age 65 years and started residency at age 26 years. We also assumed a 5-year residency for urologists. Each additional specialty was based on conventional program duration because published data were not available. Educational debt was considered as an average debt of $166,750 based on 2012 AAMC data.12 This would be repaid during 30 years with a fixed repayment schedule at 6.8%, the current rate for a Stafford Loan,13 and deducted from the yearly gross income. For our standard discount rate we used 6.8%. There is little consensus on the appropriate rate for discounting future payment streams. While many similar studies used 5%,1,5e8 we believe that 6.8% is more appropriate because this is the cost of educational debt. Thus, it is a better indication of the true opportunity cost of deferring income and ultimately the ability to pay off educational loans at this interest rate.
RESULTS Salary Data and VCE As expected, the calculated VCE for various specialties was significantly lower than gross earnings during the course of a career (see table and fig. 1). Salaries increased with time in academic and in private practice. However, in private practice there was an observed decrease in income during the later years of a career. For almost all careers evaluated Value of career earnings VCE ($) Urology: Academic Pediatric Orthopedics: General General academic Sports Surgery: General General academic Vascular Trauma Colon þ rectal General internal medicine General internal medicine, academic Hematology-oncology Cardiology
3,541,345 3,206,447 2,946,391 4,813,603 4,102,945 5,348,529 3,367,472 2,969,038 3,568,446 3,640,766 3,083,969 2,165,588 2,053,045 3,472,902 3,765,402
ECONOMIC IMPACT OF TRAINING AND CAREER DECISIONS ON UROLOGICAL SURGERY
757
Figure 1. Career NPV in dollars
the 8 to 17-year career stage was associated with the highest salary, which then decreased during years 18 or greater. The same pattern was not seen in academic career data, in which salary peaked at the professor level. As the data illustrate, general orthopedic surgery and orthopedic surgery sports medicine commanded the highest overall salaries and VCE. Urology was in the top quartile among the other specialties evaluated. Internal medicine provided the lowest VCE while the medical subspecialties of cardiology and hematology-oncology were similar to urology. Academic and Private Practice Earnings Across all specialties academic careers were associated with a lower salary and VCE than private practice careers. Although some academic positions commanded higher overall salaries, these higher salaries tended to occur at a later career stage. The overall lower VCE for academics highlighted the fact that even a higher median salary late in a career cannot overcome the comparatively lower salary during the early career, given the time value of money. The difference in the VCE between private and academic practice varied a great deal among specialties. The lowest difference was noted for those pursuing a career in internal medicine, equal to $112,543. Among surgical specialties the lowest difference in value between these 2 career paths was among urologists at $334,898. For general and orthopedic surgery the difference was greater at $398,434 and $710,658, respectively.
Fellowship Training Value The cost of fellowship training was a combination of 1) time spent in fellowship, 2) lost income while in fellowship and 3) incremental income achieved as a result of fellowship training. Each fellowship evaluated was associated with significant cost. Pediatric urology was associated with the highest cost because it is a 2-year program and the lost income was high since the fellow would forgo the opportunity to earn a $318,068 salary for 2 years. The cost of internal medicine fellowships was also high because these fellowships are typically 3 years in duration. However, the salary that such fellows forgo as a general internist was much lower than that of a urologist. For example, hematologyoncology and cardiology residents would forgo 3 years of a $166,100 salary. Despite the high cost of these fellowships the net value was generally positive. The only exceptions to this trend were pediatric urology and colorectal surgery. In these instances the fellowship was costly and the long-term value of the fellowship was negative. These specialists earned less than their nonfellowship trained counterparts despite the additional years of training (see table). Break-even salaries further revealed the financial impact of additional years of training in light of the expected future income (fig. 2, A). Consistent with data on fellowship cost (fig. 2, B), this analysis shows the annual salary required to compensate a physician for the lost time and salary associated with a fellowship program. For example, a pediatric urologist would need to earn an additional $38,379
758
ECONOMIC IMPACT OF TRAINING AND CAREER DECISIONS ON UROLOGICAL SURGERY
Figure 2. A, fellowship cost and value. B, break-even salaries. Values are shown in dollars.
in annual salary relative to a general private practice urologist to break even on the fellowship investment. In practice the pediatric urologist actually earns an average of $28,402 less per year than this counterpart. On the other hand, internal medicine fellowships were associated with incremental salaries that far exceeded the break-even point. A cardiology fellow had to earn an incremental $24,739 in annual salary to break even on the fellowship investment. The actual average incremental salary was greater than $194,000 per year. Cost of Additional Residency Training Years Additional years in residency were also associated with a decrease in the value of career earnings. For the private practice urologist an additional year of residency training (6 vs 5 years) caused a $201,500 decrease in the VCE. In terms of break-even salary this equated to $19,010 of additional annual salary necessary to compensate for the single year of delayed income. The cost of an additional year of residency for an orthopedic surgeon and internist was $292,810 and $109,543, respectively.
DISCUSSION Innumerable factors have a role in how an individual chooses and practices a career in medicine or surgery. While long-term job satisfaction and the pursuit of passions remain priceless variables in the decision making process, it is important that graduates today understand the financial implications of their choices. Our analysis tangibly illustrates the variation in income that results from subtle decisions made during medical training. As expected, there is a great deal of variation among different specialties with respect to overall compensation and the VCE. While the monetary value of career decisions is likely not discussed in medical school curricula, a fourth-year medical student may benefit from understanding that the career of a median private practice urologist would have a monetary value about $1.4 million greater than that of a general internist but $1.8 million less than that of an orthopedic surgeon who completes a sports medicine fellowship. Likewise, it is important to understand that choosing longer residency programs is not without monetary cost. Additional training may have value
ECONOMIC IMPACT OF TRAINING AND CAREER DECISIONS ON UROLOGICAL SURGERY
that offsets this cost but such values are difficult to quantify. As senior residents consider a fellowship or career in academic medicine, financial considerations are also relevant. Across the board our data revealed that the value of career earnings was lower in academic than in private practice careers. However, this difference was relatively small compared to differences in overall income and VCE among various specialties. In other words the choice of specialty has a greater impact on career earnings than the choice to pursue an academic or private practice. The financial sacrifice associated with an academic career was highest among surgical subspecialties and lowest for internal medicine. Among the surgical subspecialties analyzed urology appeared to present the lowest opportunity cost for an academic career. The cost of these fellowship training programs is significant and the return is not necessarily positive. For those pursuing a fellowship in an internal medicine subspecialty the net value of a fellowship is higher than that of a surgical fellowship. From a purely financial standpoint fellowships in pediatric urology and colorectal surgery were among the most expensive and added the least financial value to a career. While salary data were only available on pediatric urology, it is reasonable to extrapolate this principle to other subspecialties in urology. Access to information was the greatest of our study limitations. While the AAMC and MGMA data were from widely used, respected sources with
759
large sample sizes, it is not clear how well these data represent the true financial spectrum of the academic and private practice communities. In future analyses we plan to use more robust, focused data sets, although the availability of specialty specific data on urology lags behind that of other fields.6 Also, our results represent career projections that assume a stable income level for physicians during a time of great uncertainty regarding income. However, the true value of our data is in the comparisons among career choices, which is unlikely to change even if physician salaries change across the board.
CONCLUSIONS The choice of specialty has a dramatic impact on future earnings, as does the decision to pursue a fellowship or choose a private vs an academic practice. Additional years of training and forgone wages have a tremendous impact on monetary outcomes. These principles are important for individuals and organizations to understand. Appropriate compensation is needed to recruit and retain talented individuals and these data show wide variability among specialties and subspecialties. While financial compensation is only a single piece of the puzzle, we must remain diligent in understanding the current state of physician compensation to fully understand trends in physician career choices.
REFERENCES 1. Weeks WE, Wallace AE and Wallace MW: A comparison of the educational costs and income of physicians and other professionals. New Engl J Med 1994; 330: 1280. 2. Jurkiewicz CL: Generation X and the public employee. Public Personnel Management 2000; 29: 55. 3. Jolly P: Medical school tuition and young physicians’ indebtedness. Health Aff 2005; 24: 527. 4. The 2011 National Physicians Survey: Frustration and Dismay in a Time of Change. Ann Arbor: Thomson Reuters 2011.
5. Weeks WB and Wallace AE: Financial returns on specialty training for surgeons. Surgery 2002; 132: 795.
10. Report on Medical School Faculty Salaries: 20102011. Washington, D.C.: Association of American Medical Colleges 2012.
6. Gaskill T, Cook C and Nunley J: The financial impact of orthopedic fellowship training. J Bone Joint Surg Am 2009; 91: 1817.
11. Physician Compensation and Production Survey. 2011 Report Based on 2010 Data. Englewood, Colorado: Medical Group Management Association 2012.
7. Prashker MJ and Meenam RF: Subspecialty training: is it worthwhile? Ann Intern Med 1991; 115: 715. 8. Weeks WB and Wallace AE: Return on educational investment in geriatric training. J Am Geriatr Soc 2004; 52: 1940.
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EDITORIAL COMMENT While the economic concepts presented are not new, their application to career decisions in urology and choice of fellowship training are novel and thought
provoking. Several findings of this analysis are expected, eg less income in academic vs private practice, while others are relatively surprising, eg
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ECONOMIC IMPACT OF TRAINING AND CAREER DECISIONS ON UROLOGICAL SURGERY
compared to other specialties urology has the least difference in net value when comparing academic and private practice urologists. One of the most interesting findings is the low net value of urology fellowship training. One can only speculate as to why fellowship training in urology has less economic value than fellowships in other surgical specialties but it seems clear that fellowship training is pursued for reasons other than improving salary potential. While it is valuable to understand the impact of specialty choice and fellowship training on lost or future earnings, it is likely that job satisfaction is
a more important factor influencing career decisions. The cost of training and earning potential is important to consider but in this era when career choices are guided more often by work-life balance and time off questions, work gratification may be a more important consideration than dollars and cents. Christopher L. Amling Department of Urology Oregon Health and Science University Portland, Oregon