Early years of primary care career present financial challenges

A study says expenses often exceed earnings, a fact that steers many medical students to other specialties.

By — Posted Nov. 12, 2010

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The early years of clinical practice can be challenging for primary care physicians, who often leave residency training loaded with medical school debt, mortgages and young families to support.

The average primary care physician can expect expenses to exceed earnings for three to five years after residency, according to a study in the November issue of Academic Medicine. Such financial challenges steer many medical students to other specialties, said study co-author Martin Palmeri, MD.

He realized the discrepancy in pay versus costs when he calculated his family budget after residency. "I came to the realization that if I was going to save for retirement, save for my son's college education and make other recommended investments, I would not have enough," said Dr. Palmeri, a fellow in the hematology and oncology department at Norris Cotton Cancer Center at Dartmouth-Hitchcock Medical Center in New Hampshire.

Students who defer payments until after residency have an average $199,159 in debts, amounting to a $2,261 monthly payment for 10 years, said the study (link).

Combined with retirement savings, housing costs, children's college savings and other expenses, a primary care physician will face an $801 monthly shortfall, based on an average starting salary of $130,000. The calculations didn't include things such as clothes, entertainment and travel expenses.

But physicians who are frugal will find themselves on solid ground in a few years.

"Your income rises rapidly those first five years, but if you weren't financially diligent those first five years, playing catch-up can be a challenge," Dr. Palmeri said.

To help during those early years, more loan repayment packages or tax deferral options are needed, Dr. Palmeri said. The health system reform law will rely heavily on primary care physicians to treat more than 30 million uninsured Americans who will gain coverage in coming years. Nationwide, primary care doctor shortages are projected to reach 45,000 in the next decade, according to the Assn. of American Medical Colleges.

The reform law's focus on a medical home model will help improve payment and attract more physicians to primary care, said Catherine Florio Pipas, MD, study co-author and associate professor and director of the Regional Primary Care Center at Dartmouth-Hitchcock Medical Center.

Primary care physicians will be paid for quality versus quantity, she said. "We need to look as a nation and say what do we value primary care for? If we change the alignment and incentivize primary care for what really matters, physicians will be more satisfied, overall quality will be better, and we will improve health care nationwide," Dr. Pipas said.

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