Physician Compensation Economics - Page 2

bluedevilmike · 01-20-2007, 01:08 PM

Objection from another thread:

Quote:

Your physician compensation thread makes the assumption that the money is all put into the bank and earning interest. Obviously that is not the case in real life

Response:

Quote:

No, it makes the assumption that money has a time-value, which is the case in real life. This time-value is why money earns interest when you put it into the bank, not vice versa. It also explains why loans charge interest. It helps explain why people invest in venture capital. And it's one of a few reasons why real estate values rise over time.

The point is that money that is acquired earlier in life can be used to accomplish various investments, but these decisions often take time to manifest themselves - so the combination of money and time is more valuable than money by itself.

This isn't about banks and interest rates. This is about the real fact that money matters more if you earn it earlier and less if you earn it later. That's undeniable, basic economics.

jksbond007 · 01-21-2007, 03:22 PM

u got some bad data there..America's top 50 salaries:

http://msn.careerbuilder.com/custom/...222707973-TM-4

Quote:

And, of course, there's proof positive that it pays to have an MD: surgeons and physicians dominate the list.

CEO's are actually 10th.

bluedevilmike · 01-21-2007, 04:47 PM

You're ignoring the time-cost. Salaries are not a good approximation of lifetime net income. And, besides, I don't use CEOs as a contrast. Specifically the example I contrasted with was corporate finance.

I stand by my calculations.

Pharmagal · 03-02-2007, 08:42 PM

I agree with jksbond007. The salaries quoted on page 1 of this thread are incorrect for most of US.

Below are salaries within mid 50% range of the bell distribution for the NY/NJ area

surgeon - 260k -390k
psychiatrist- 170k - 220k
anaesthesiologist - 280k-395k
radiologist- 260k-430k
family practice 155 k to 204k
pediatrician - 150k -200k
dermatology - 220k-300k
chiropractice- 75k-115k

electrical/civil/or mechanical engineer III - 70k - 100 k

bluedevilmike · 03-02-2007, 10:11 PM

That's because they're not incomes. They're lifetime total earnings, adjusted for the time value of money.

jcr182 · 03-09-2007, 12:35 PM

i would actually have to disagree with the time value argument. Doctors have much greater control over the hours they work than corporate workers and attorneys. IBankers, attorneys, and other members of the financial sector are forced by their companies/firms to work a ridiculous number of hours. Doctors, on the other hand, can work more to make more money, but also can work less if they choose to. Furthermore, the job security of a doctor is far greater than that of any job in the corporate sector.

The lifestyle of a doctor, although not glamorous, is certainly very comfortable compared to many corporate workers. The reason is not based on money, but based on a doctor's control over his own schedule, which can be very important, as it could also provide opportunies for other ventures.

bluedevilmike · 03-09-2007, 01:21 PM

There's two separate arguments that revolve around time. You've addressed one of them, I believe incorrectly.

The first and more important argument is that because IB, HS teachers, and automechanics, etc. earn more lifetime income is because they receive it earlier in their lives, when it's worth more. This argument is not what you're discussing.

The second and less important argument is that doctors work more hours than lawyers and other professions, so an equivalent compensation is actually much less per-hour. This is the argument you disagree with.

First, I don't believe I made any arguments about investment bankers. My comment was directed at people in Corporate Finance, which I believe has more to do with oversight of corporate budgets and investments on behalf of a firm.

Second, even those pursuing investment banking are not pursuing careers in IB. They spend a couple years there, go to business school, then exit as highly-paid and light-hours management.

Third, I believe you're using a small subset of attorneys -- those who work directly for a firm doing work on behalf of a corporation -- to attempt to argue that the broader field works very long hours. Partners at these firms, in-house attorneys, and private practice attorneys all work much fewer hours than these.

In other words, you're using very young professionals in business and law to compare against more established physicians, who (obviously) work fewer hours. The proper comparison would be more parallel than that. And while I think it could in some situations be close, medical residents almost always max out their eighty hours a week. I don't think most young lawyers can claim that. IB, sure, I'll concede -- but for a much shorter and earlier period of time in their lives.

Bigredmed · 03-09-2007, 06:10 PM

I'd put young associates at or above 80 hours most of the time (sometimes well above) but that of course depends on the firm, and sometimes even which partner you're under (according to my friends currently in and recently out of law school). But even then, not all recent law graduates go into firms or positions (eg Public Defenders) where 80 hours is the case. Clerking for judges, entry into non-profit sector, and plenty of other corporate jobs where a JD is beneficial are not going to require that kind of time at work. 100% of medical residents are going to be over 60 hours a week (and I'd feel safe saying that at 65 hours), greater than 85% will probably be over 70/wk and probably 70% are at 80 hours a week consistently, with a sizable portion going over that limit one or two times a month.

And yes, doctors do have greater control in general. But if you want to earn salaries equal to the other professions in question here, doctors are going to be working far more hours.

bluedevilmike · 03-10-2007, 12:16 AM

Doctors are required by law to work no more than eighty hours per week on average and no more than 30 hours straight ever.

5% of residencies comply with these two rules, according to JAMA.

bluedevilmike · 03-30-2007, 01:32 PM

http://www.medfriends.org/specialty_hours_worked.htm

Establishing that doctors do, in fact, continue to work very long hours after their residency.

Alston89 · 04-07-2007, 12:53 PM

I want to get an MD/MBA in grad school so that I can become an investment banker within the healthcare industry (or take on some administrative position within the field), but I can still fall back on being a physician if that plan fails.

Is this a sound choice or should I choose one or the other?

bluedevilmike · 04-07-2007, 04:27 PM

You should choose one or the other. For one thing, there's no need to get an MD to do finance within the field, since ... well, why would you.

Second, medical schools will not admit you if you tell them this, which means you'd have to lie to get it done.

Third, society subsidizes medical students considerably in the expectation that they will go into medicine for at least much of their career, or that they will do something which requires the MD. To do otherwise has ethical implications.

Alston89 · 04-07-2007, 10:56 PM

But the thing is I've always wanted to be a doctor, but everyone I know says that I'd make a perfect businessman (and it's sorta true - I'm very ambitious and am used to taking leadership roles in almost everything I do). If I have an MD, I'll have more knowledge of medicine than someone with just an MBA would have, so I would have less competition in my field.

Also, I know a lot of doctors that are good at what they do, but don't have the business acumen to run a private practice. That's where I could come in. I could do what I'm good at (business and administration) but still have the option to practice what I love (medicine). Do you think I should leave this out of my med school application?

Also, what should I major in for undergrad? Should I go the standard premed route or something else (like Biology and Economics)?

bluedevilmike · 04-08-2007, 01:16 AM

Quote:

I'll have more knowledge of medicine than someone with just an MBA would have, so I would have less competition in my field

Only if that knowledge is actually relevant. You could get a PhD in Medieval British Literature while you're at it.

Quote:

Do you think I should leave this out of my med school application?

No, you should be honest about your career goals (many of them will ask). It will reduce your chances, I suspect, but you should be honest anyway.

Quote:

what should I major in for undergrad? Should I go the standard premed route

Doesn't matter for premeds in the first place. Probably should pick a liberal arts major (i.e. economics > business).

My point isn't that an MD shouldn't have any business acumen. My point is that you should only go to medical school because you desire to practice medicine. Some MD's are politicians; some are businessmen; some eventually quit and go to law school. Changing your mind is one thing. Spending only part of your time in medicine while spending the rest of it somewhere else is also a possibility.

But if medicine is at best a "backup plan" if your main plan fails, then don't go to medical school. Go directly into consulting.

OldPerson · 04-09-2007, 07:33 PM

I agree with bluedevilmike. Alston's plan is not viable. To practice medicine takes 4 years of med school and at least 3 years of residency. 7 extra years of school/training is a long time for a back-up.

Also, it is difficult to know you love medicine. You might not like it as much if you got further into it.