According to the Association of American Medical Colleges (AAMC), the median cost of a medical education in the United States ranges around $268,000. But this figure represents just the sticker price of 4 years of medical school. Physicians have to do far beyond this, including 4 years of undergraduate studies and a minimum of 3 years of residency, the latter of which has an average salary of only around $58,000. Most importantly, however, is that most physicians have to defer their earnings by nearly 10 years while undertaking training, meaning that they miss out on nearly 10 years of earning potential, compound interest and savings.
To add to this, physician salaries have slowly oscillated over the years. In a recent report released last spring that surveyed nearly 190,000 physicians, it was found that average physician compensation declined by nearly 2.4% in 2022. Furthermore, most specialties experienced stagnant pay across years, while only a few specialties saw cost-of-living and inflation adjustments to their wages. This is one of the primary reasons why there is significant attrition in the profession; other systemic pressures include increased emphases on metrics, lack of leadership support and evolving compensation models. A recent article published in the Journal of the American Board of Family Medicine explained this exact phenomenon, outlining the growing factors which contribute to physician attrition and its devastating costs: “the cost of finding a new physician to replace the loss coupled with lost productivity as they build their practice can cost as much as $1 million per departure.”
NEW YORK - MAY 2020: Medical workers hug outside NYU Langone Health hospital as people applaud to ... [+]
This phenomenon is not unique to healthcare. A recent Gallup study found that U.S. businesses lose nearly a trillion dollars annually due to voluntary turnover. This is because, according to the study, the cost of replacing an employee ranges from nearly one-half to two times the employee’s annual salary. The study also highlights an important finding: “Fifty-two percent of voluntarily exiting employees say their manager or organization could have done something to prevent them from leaving their job.” Certainly, this is no different in healthcare, which entails a highly skilled workforce that is the product of nearly 10+ years of education.
Reports indicate that between 2010 and 2018 alone, the annual rate at which physicians left their practices increased by nearly 43%. Undoubtedly, the healthcare industry simply cannot afford this level of attrition—whether at a practice level, or simply referring to physicians completely leaving the profession. This is because there is a dire shortage of access to care in the United States: both physicians and nurses are expected to be in significant demand over the next decade, with an expected shortage of nearly 195,400 nurses by 2031, and a shortage of 124,000 physicians in the next 12 years.
Existing healthcare worker populations are mainly concentrated in large metropolitan and urban areas, leaving significant gaps in access in smaller cities and more rural areas. These areas will experience the highest burden of disparities due to these shortages, and ultimately, patients will have to bear the brunt of it. Thus, industry pundits and leaders must do everything in their power to mitigate this impending crisis.
