Whatever, the reasons that motivate medical students to persevere, graduate and become full-fledged doctors, the lure of making a sizable income is not one of them- at a glance, its easy to determine that for young doctors under the age of thirty-five, being a health care provider involves being engaged in an economic struggle. Before we can speculate just how challenging of a world it is for our physicians under thirty-five and between the ages of thirty-five and thirty-nine, we must review the published data. The following information is based on a financial survey from the journal Medical Economics. It is presented in this Q & A format to quickly tell their story and to make it easier to understand why business studies are rapidly becoming a priority to today's practicing young physicians.
Q & A's
Financial Survey: How Young Doctors Are Doing Today
Excerpted from Medical Economics Journal, Kathleen McKee, October 2005
- Complete the following statement: Life continues to be a struggle for doctors younger than _____________.
Thirty-five
- Complete the following statement: As a group, young doctor's financial situations have not changed in ___________years.
Four years
- Complete the following statement: From 2000 to 2004 young doctors from 35-39 witnessed an increase in their family income from $__________to $____________a nice______ percentage gain.
$170,000 to $195,000 an increase of 15% gain
- Name four different financial scenarios that doctors use to immediately rectify the debt they sustained from their years of medical training?
• They saved fourteen percentage of their income every month
• They left another physician's or hospital practice & started on their own
• They focused on and paid off their high interest debts
• They solicited sponsorship from local hospitals, which helped cut their practice expenses
- What makes an enormous impact on young physicians' finances?
Federal taxes - a young physician's median tax bill (excluding social security in 2004) was $26,000 for doctors under the age of thirty-five & $35,000 for those thirty-five to thirty-nine years old.
- What other major expenses must young doctors incur?
Other major expenses include the earnings they contribute to raising their families, huge portions of their incomes they must apply toward paying down their debts (including their medical school loans).
- What is the percentage of young doctors under the age of thirty-five that are paying off medical school debts?
Almost three-quarters
- What is the percentage of doctors that are paying off their medical school debts between the ages of thirty-five and thirty-nine?
More than half of the physicians in the U.S. ages thirty-five and thirty-nine
- What is the percentage of doctors under the age of thirty-five that are married and who must devote their income to raising their families?
Seventy-eight percent
- What is the percentage of doctors who are married with families between the ages of thirty-five to thirty-nine?
Eight-five percent
- What is the median debt for doctors under thirty-five years old? And, what amount of median debt are physicians assuming in the age groups of thirty-five-to-thirty-nine years old?
It is two hundred & fifty-thousand dollars for those physicians under thirty-five years of age and the median debt of physicians between the ages of thirty-five -to- thirty-nine was around two-hundred & eighty thousand dollars when surveyed in 2004.
- What is the percentage of young doctors that are financing homes by the age of thirty-four?
Eight to ten percent by age thirty-four
- What is the percentage of doctors that are financing homes by age thirty-nine in the U.S. ?
Ninety-four percent
- What is the percentage of doctors that own their own practices under the age of thirty-five years old?
Twelve percent
- What is the percentage of doctors that own their own practices between the ages of thirty-five and thirty-nine years old?
Seventeen percent
- What financial impact do these assets make on young physicians earnings?
It taxes the income of young doctors because all these assets place the physicians in more debt which influences the amount of their take home pay
- Name seven measures physicians are taking to increase their incomes:
• They are meeting with insurers directly to negotiate higher reimbursements for their services
• They are beginning to offer extra services such as: LEEP (Loop Electrosurgical Excision Procedure - as a response to poor pap smear results. This device detects abnormal cells on the surface of the cervix & is designed to destroy these cells using a painless electro current that cuts away cervical tissue to aid in the prevention of the formation of additional cells that could develop into cervical cancer. Physicians are also offering Endoscopy treatments (a special device to visually examine the interiors of body canals and body organs such as a patients colon, bladder or stomach)
• In California physicians are enrolling in courses to learn more about cash-based procedures
• Family physicians are adding radiology services to their practices
• Internists are conducting their own in-office lab work & reducing their overhead by sharing space with pediatricians
• Some young physicians have decided to schedule patients on Sundays and are increasing their schedules by seeing patients in the evenings
• An OB-GYN (obstetricians, gynecologists) are adding infertility services to their practices
- What are the percentages of physicians that are making ends meet by investing in sideline businesses? And, what types of enterprises are they choosing to invest their money in?
The percentage of physicians that invest in sideline businesses under the age of thirty-five years old is fifteen percent and for those doctors thirty-five to thirty-nine it is sixteen percent. The types of investments vary - some physicians invest below or above $100,000 in restaurants and others as little as $1,000.00 or more in more obscure areas - for example - a record company.
- How many doctors invest in some portion of mutual funds under the age of thirty-five? And from ages thirty-five to thirty-nine?
Ninety-five percent under the age of thirty-five and only 92% under the age of thirty-five to thirty-nine
- What is the percentage of physicians under the age of thirty-five that expect to retire by sixty-five years of age?
Twenty-eight percent
- What do young doctors today; expect their net worth to be by age sixty-five?
One million (according to this survey conducted in 2004)
- Approximately how much would a doctor thirty-five years old have to fund annually in order to retire with the sum of 1.5 million?
A young physician of thirty-five years of age (according to this survey taken in 2004) would have to set aside for his or her retirement fund $42,000.00 per year to accumulate the sum of 1.5 million dollars to fund his or her retirement.
- Approximately what is the median financial contribution that doctors are placing in their retirement funds?
Doctors under the age of thirty-five are putting into their retirement fund $12,500.00 and physicians thirty-five to thirty-nine are saving $13,000 per year
- What is the percentage of doctors under thirty-five years of age and between the years of thirty-five and thirty nine that were participating in 401 (k)s that with limited contributions of $14,000 in 2005
Seventy-seven percent of physicians under thirty-five years of age, and seventy-one percent of those thirty-five-to-thirty nine
- What is the most popular retirement plan for younger physicians under the age of thirty-five? And, why?
The Roth IRAs are the most popular among young physician investors because it permits tax free growth
- What other investment sources are young doctors choosing to use to protect their families financially?
They are purchasing life insurance policies
- How many doctors under thirty-five carry these policies? And, what is their median coverage?
Eighty percent of the doctors surveyed under thirty-five years of age carry life insurance with their median coverage around $500.000 in the year 2004 whereas Eighty-five percent of doctors in the age group of thirty-five to thirty-nine have coverage for one million
- What was the original source of all this data and who compiled this information specifically on the topic of how young doctors are doing?"
It was the result of a report issued by the "Professional Association of Health Care Office Management Content" and, researched by Kathleen Mckee for an article she wrote that appeared in a journal entitled "Medical Economics" published October 7, 2005
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