The stress and discord surrounding the COVID-19 response may have some physicians feeling a bit nostalgic. It brings to mind Ronald Regan’s famous campaign question of, “Are you better off today than you were 4 years ago?” Well, what about 50 years ago? Is the medical career and the practice of medicine actually better than it was 50 years ago? It’s a question we’ll be answering over the coming months in a series of posts, due to its enormity and complexity. And we want your opinion on the matter. Did you start practicing in 1970? Please email us your thoughts. How have things changed? Have they changed for better or worse? This week, we’ll be looking at the financial aspects of the question. We’re kind of geeky here at PhysicianSense and we know that doctors tend to want data. So, here’s what we found. Physician salaries We began our investigation by establishing estimations of what physicians made in 1970. Keep in mind, this is not a comprehensive overview of physician salary data from the era. It’s simply the best data we could find. Then, we adjusted these salaries for inflation, and compared them to the most recent Doximity report on physician salaries nationwide. As you’ll see, it looks like physician compensation has largely kept pace with inflation. However, if you’re an internist or a pediatrician, you might have done slightly better in 1970. Surgeons saw the biggest salary gains overall among this group. The decline in pediatrician pay might be an indirect result of the fact that children today (thankfully) are healthier than they were in 1970. UN data put the child mortality rate in 1970 at 2.34% in North America. CDC data show the rate fell to .73% in 2017. Driving the jump in pay for surgeons might be a number of factors, including increasing specialization in surgery as well as an overall increase in the sophistication of procedures — both requiring more training and consequently higher pay. For example, orthopedic surgery has arguably exploded since 1970, offering more and better joint replacements. Furthermore, surgeons continue to remain in private practice (about 73%, according to this report). So, taking the pay picture into perspective, you might be thinking things seem relatively OK. But wait. There’s more. Medical school costs This is where things get ugly. Really ugly. While physician compensation has, for the most part, kept pace with inflation, it appears that pay increases are dwarfed by education costs. We began by looking at US News and World Report’s annual ranking of medical schools (we used the ranking for the primary care specialty). The thinking was, let’s look at the top 5, see what the tuition cost was in 1970, adjust for inflation, and compare to current costs. Easier said than done. Most medical schools cut off their tuition data in the early ‘90s or late ‘80s. After looking at that chart, the conspiratorially minded among you might see why. We made it to #15 (University of Minnesota) before we could come up with 5 schools who published data going back that far. Maybe they don’t want today’s prospective doctors to know just how much more expensive tuition has gotten. Comparing the leap in cost of tuition to the relatively static levels of physician compensation seem to make becoming a doctor a poor dollars-and-cents decision. The medical school tuition increase might be easier to stomach if the trend didn’t also carry over into the price of undergraduate education. In 1970, the average cost of a 4-year public college stood at $405 annually, and private came in at $1,792. In today’s dollars, that’s $2,676.23 and $11,841.47 respectively. Let’s compare that to 2020, shall we? For public colleges, the average in-state tuition is $10,440 and out-of-state is $26,820. For private colleges, the average stands at $36,880. At the risk of turning this post into an OK, Boomer, meme, if you manage to make it out of undergraduate education in 4 years, chances are you’re not going to be able to pay your way through by flipping burgers. Since the ‘90s, interest rates on student loans have bounced roughly between 3.5-7.5%. For comparison, rapid inflation in the ‘70s pushed interest rates near 20%. So, let’s say in 1970, you went to UNC Chapel Hill for a total of (in today’s dollars) $21,568.40. You borrowed the full amount at 20% interest to be repaid over 20 years. The total cost of the loan would be $87,938.23. Let’s compare that to the current cost at prevailing interest rates: $60,140 multiplied by 4 years is a total cost of $240,560. Let’s say you borrowed that at 5% interest to be repaid over 20 years. That loan would cost you $381,021.49. Even when accounting for inflation and high interest rates, it’s still a bitter pill to swallow. Final thoughts If we’re focusing exclusively at compensation and cost of education, it’s a definitive no, medicine is not better than it was in 1970. Sticker shock alone makes it that much more difficult to become a doctor today than it was 50 years ago, even if you’re among the best and brightest. It’s no wonder that we’re experiencing a doctor shortage. It no longer makes financial sense to become one, if it’s the student who has to foot the bill. Perhaps, on the bright side, we know that today’s up-and-coming physicians are motivated not by money, but by a love of medicine and helping others. Source
