[Editor's Note: This post originally appeared on WCI Network partner site, Passive Income, MD and is all about dispelling the myth that just because you are a doctor, you are never at risk of losing your job. We only wish that was the case! Another issue that frequently happens in hospital based specialties is loss of a contract by a private group when it is awarded to a national contract management group or even when the hospital forces the docs to become employees or find a new job.]
Imagine, if you will, that you’re an anesthesiologist. You’ve been part of a successful practice for over 10 years. You can walk down your neighborhood street and run into mothers whose epidurals you’ve helped place. You’ve established a home, a community, and your children are in a great school system.
One uneventful day, say Wednesday, you get an email from the hospital administrators announcing that there’s going to be a meeting on Friday. You’re not sure what it could be about, but you don’t give it much thought.
When Friday rolls around, you discover that the meeting was held to inform you that the contract for your group has not been renewed and a new national practice management company will be taking over all anesthesia services shortly. Details are pending, but from what you’ve heard, you will have the option to stay on board and accept 30% less than what you’re making now or move on.
Sound impossible? Unfortunately, based on several accounts from close friends and colleagues in just the past few years, this situation is more common than you’d think.
Medicine Has Definitely Changed
We pursued this career in medicine because we were passionate about medicine, about helping people, and making a difference. One of the nice benefits along the way is that it seemed to promise a pretty good, stable financial life with job security. How many of us saw ourselves as the gray-haired physician, wise in all of his or her knowledge, smiling over our patients?
However, early in my career, I began to realize that all doctors don’t necessarily live the lifestyles you see in TV shows or movies with country club memberships and fancy cars. And I was fine with that.
At least I’d have a stable income and be able to provide for my family while enjoying what I’m doing, right? At least I’d be better off than some of my other college friends who went into finance, only to lose those jobs when the economy crashed. I had a set path, and as long as I kept on it, then life stability was in my future.
Well, I’ve found out that this isn’t necessarily true.
There may be a demand for physicians, but it doesn’t mean your job is secure. As we hear of other industries in upheaval, some entire industries collapsing, and huge industrial stalwarts having financial issues (GE was just taken off the Dow by the way), and with job security at an all-time low in many ways . . . are we immune to it all?
I work in an academic setting where I get to talk to graduating residents and fellows about their future plans. Increasingly, people are flocking to jobs that provide stability and security, like some large unnamed healthcare institution prominent in my area that is known for pensions, educational half-days, and a great healthcare plan.
Apparently, very few doctors wanted to work there in the past, but with everything that’s going on in healthcare, it’s become an extremely coveted health system to work for–and much of it has to do with job security and benefits.
Why Job Security in Medicine is a Myth
In some ways, it saddens me to say it, but I think that in modern times, having job security as physicians is an illusion, a myth. Here’s why…
You Can Be (And Are Being) Replaced by Non-Physicians
I’ll be honest, there’s a certain amount of pride that I carry being a physician. It wasn’t easy getting here, and surely having that degree and training as well as years of experience must make it tough to be replaced. Plus, you constantly hear about a physician shortage nationwide. The basic laws of macroeconomics indicate that a reduced supply should mean increased demand, and as a result, prices and wages should increase, right?
Wrong. Unfortunately, in healthcare, the macro solution to that physician shortage has been to find other people and ways to fill that gap: train midlevel providers and empower them with the same abilities as physicians and create parity by treating patients through algorithms. The physician is merely reduced to a “provider” and a technician, and one that can be replaced by either another physician at a cheaper rate or another type of provider.
Regardless of how you feel about this or whether you believe it’s right or wrong, it is happening. Just as in my opening example, anesthesia groups and hospitals are asking, “Why employ a group of all physicians when you can employ ‘physician extenders’ or a mix at a much lower cost?”
You Can Be (And Are Being) Replaced by Other Physicians
Physicians used to be their own brand to a certain degree. Being in private practice meant that patients were coming to YOU because of your reputation and skill level. Look around, private practice today is being squeezed out of existence.
Healthcare systems spend millions of dollars building up their own brands so that patients now think of receiving care from a particular health system vs. a particular physician. Ask a friend now who they go see for their healthcare. Most will tout what health system they belong to. Increasingly patients are of the mindset that they don’t really care who they go to, as long as it’s within a health system with a good reputation, it’s covered by their insurance, and it’s convenient to get an appointment.
As a result, any leverage that physicians once had as a unique and powerful brand is fading. Not happy with the deal you’ve got with your hospital? Well, that’s okay, we’ll replace you with another physician willing to accept our terms and it’s “plug and play.”
Unfortunately, newer physicians will happily take the terms to have a job. I see it happening all over the place. Like the opening story, if you’re not willing to take a 30% haircut on your salary, move on, we’ll surely find someone else to fill the void and things move on like usual. You will be replaced by a younger, hungrier physician.
Physicians are not organized in the form of unions and unfortunately, the large medical organizations we pay large dues to each year haven’t been able to create the sort of leverage and bargaining power to prevent these things from happening.
Automation and Technology
Seemingly every field is falling victim to automation and technology. Are physicians immune to this?
I just read about how automation is killing certain jobs and industries. It’s easier for us to imagine a machine flipping burgers, but how could it replace a physician, right? While the Sedasys machine suffered a very public defeat, the fact that it was even developed and no doubt still on the horizon does not bode well for anesthesiologists.
Other fields in medicine besides anesthesiology could one-day fall victim to this as well. Radiology, Surgery, and other fields associated with a high cost (physician salaries) are being targeted as we speak.
But what about empathy, human touch, and human decision-making? Unfortunately, those things are not enough to keep “progress” from happening. Autonomous human decision-making by a physician is actually becoming increasingly highly discouraged. Follow the health system protocol, otherwise, face disciplinary action and in some cases financial penalties.
Lawsuits
This one speaks mostly for itself. In the litigious environment in which we work, there’s always a risk that a poor outcome could end your career and financial wellbeing.
That’s what malpractice insurance is for right? Well, only to a certain degree. Sure, lawsuits are mostly settled under the limits of what insurers are willing to pay out. In addition, creating a separate legal entity for your medical practices should shield litigators from going after your personal assets. [Editor's Note: Note actually true as malpractice is always personal and incorporating doesn't shield personal assets from it. Although personal assets can be owned by another entity that could potential protect them from malpractice, such as rental property in an LLC or an irrevocable trust.] So you should be able to sleep safe and sound, however, dig a little and you will hear stories that will tell you otherwise.
Besides pure financial damages, if a lawsuit is high-profile enough, think about how that will help or hurt your career regardless of the outcome of the case. Imagine that you’ve built up a reputation that you’ve worked hard for over the years, and then you get sued in a very public way. A good or poor reputation can make or break a career like ours.
The Medical Board, Licensing, and Credentialing
We tend to take our licenses to practice medicine for granted. I think most of us received our first license after our internships. In my residency, it was a requirement to advance. It’s something we’re entitled to after all those years of schooling and training.
The fact is, with every case you take, your medical license is potentially on the line and therefore your career and financial pipeline. I didn’t ever think about this until a friend’s license was put at risk for a poor outcome. He did everything he could to help his patient get through a very stressful situation, yet he was still put through the wringer. He had to spend an extraordinary amount of money to hire his own lawyers for not only the lawsuit itself, but also to go before the medical board to fight for the right to keep his medical license.
Some might say, well that’s what should happen for someone practicing outside the standard of care. I understand that aspect, that there needs to be accountability. However, I know personally that he performed admirably in an extremely difficult situation yet still suffered for years dealing with the aftermath. How do I know this? Well, I was there in the room when it happened, providing care as well. I was then asked to be a witness in front of the medical board where his career was in the hands of a judge. I saw a small part of the process, and it was not pretty.
Thankfully the judge ruled in his favor, but what if she didn’t? What would’ve happened to his career? Would he be able to reinstate his license at a later date? Would he ever be able to be credentialed at another hospital? Who knows.
Hospital Administration
Think you can’t be replaced as head of a department or as a key faculty member, even at an academic institution? Well, if you’re not performing or producing like they would like, they can find someone else. I’ve seen it happen.
It seems as if the relationship between hospital administrators and doctors is increasingly getting more impersonal, and as larger corporations take over health systems and consolidate, the decisions are being made at a distance, making it easier to change how things operate. Not meeting defined objectives and revenue targets, sorry, your contract may not be renewed and you may be replaced with someone more aggressive who might meet those RVU or research goals. I’ve seen this happen firsthand with family members who were physicians.
The Economy
I was fortunate to still be in training during the Great Recession of 2008. But I heard the stories of physicians not being able to find work. Elective surgeries were down, and so physicians who particularly relied on those, like plastic surgeons, cosmetic derms, and the anesthesiologists who helped them were struggling.
It’s even been said that our profession is recession-proof, yet as I started working in 2011, the effects were still being felt and caseloads still were down. Finding cases to staff in the hospital wasn’t easy and outside surgical centers were hurting. Sure, things are roaring again and much better, but as we’ve seen before, history eventually repeats itself.
Disability
Many of us perform technical and highly-skilled procedures. That’s what makes us marketable. If you’re a surgeon, your hands are everything. It’s like an athlete who relies on their body for their livelihood.
However, we’re human and we live life. Injuries happen and careers get cut short. Many of us have the impression it’ll never happen to us, but ask any disability insurance provider how many doctors go on claim and they’ll tell you: Physicians get hurt like everyone else.
Sure, statistics will tell you that the likelihood of such an injury is low, but I think Larry Keller of Physician Financial Services puts it best, “The reality of the situation is that if they [physicians] are disabled, the statistic is 100% and nothing else matters. One’s ability to earn an income is their most valuable asset and what allows them to build a lifestyle for themselves and their family, pay down debt and create wealth. It is the foundation of a financial plan and without it, the plan will likely fail on all levels.”
Where would that leave you? What would you do next? Personally, I tell everyone it’s vitally important to be well insured against this happening. Well, that is, until you have enough passive income that you’re self-insured some day.
Is Being a Physician Bad for Your Financial Health?
Now, I don’t want to create the misconception that being a physician is completely bad for your financial future. Yes, student loans are rising and physician reimbursements are falling, however, I still believe there’s a definite potential for a great financial life–in spite of what you hear.
According to Ryan Inman, a financial advisor that works exclusively with physicians and the founder of FinancialResidency.com, “Armed with the proper financial knowledge, physicians can take hold of their financial futures and really help shape their personal lives to how they want to live it.”
In my opinion, it all means that you can’t just be a doctor anymore. You can’t expect to just go to work, clock in, and clock out. You can’t put all your eggs in one basket and expect that a certain lifestyle is guaranteed.
Is There a Solution?
So what can we do? Well, we can complain and mourn the loss of the “golden age of medicine” (which are normal reactions). However, we need to quickly transition and take the situation into our own hands. We can and should hedge our bets, and not rely on one single source of income by creating additional streams instead.
But will that compromise your ability to be the best physician you can be? Some might have you believe that, but try to recognize what their incentives are to say so.
Let’s be honest, no one will be as good an advocate for yourself and your family as you. Spend more time on creating multiple streams of income (particularly passive ones like real estate crowdfunding for example). Figure out why you might not be creating passive income and fix it. Take advantage of all of the resources out there to help guide your financial journey, like blogs, podcasts, online courses, and our Facebook Group, Passive Income Docs.
I believe that will lead to a life in which you can practice medicine on your own terms–on your own time, how much you want, and where you want. In essence, the key to surviving the unknown future is to adapt to the changes, invest well, be proactive, be humble, and simply… create your own job security.
Agree or disagree? Think your job practicing medicine is stable? Think you can’t be replaced? What measures have you taken to make sure you’re financially stable? Have you thought about creating passive income to increase your job security?
As a current premed studying for the MCAT and applying this upcoming cycle, this article gave me a bleak glimpse into the future of medicine and is quite scary. Should I still pursue becoming a medical doctor if there’s nothing else I’d see myself doing?
It is a reality that you need to consider and think about. Do not be naive and just pursue being a doctor because you can’t think of anything else. Also make sure you understand the time and monetary investment it will take to become a physician. You need to make sure your debt to income ratio is manageable (preferably <1).
It’s just a wake up call, that like all Americans, nothing is guaranteed. Therefore don’t plan your med school (plus college) loans expecting you’ll definitely choose a high paying specialty, and that the pay from it will be even higher than it is now. Choose (if possible) a cheaper med school if the cost might interfere with your ability to live the lifestyle you want in the future. Choose your practice situation, your home rented or bought, how much your spouse should work or not and at what, your cars, how you vacation, where you send your kids to school and where you choose to live, with the ever possible risk of your pay not rising but actually dropping in real $ terms. That way you won’t end up like so many Americans in the housing crisis having to give up something to which you have become accustomed- the rich doctor’s house or fancy car, the private school, stay at home parent- because you thought you didn’t have to worry since you’d be a rich doctor forever. The fact that after you work and train hard learning what you really want to do and then getting to do it and still earn probably 4-10 times the median American earner is still a better deal than many other career options. But of course please be certain it’s what you really want, since deciding or having to give it up before the loans are paid off is really onerous.
Despite the bleak picture many of us paint, it’s all relative. Things are more bleak compared to years past. There are challenges to being a doctor, it’s not easy and most aren’t working 9-5 driving ferrari’s. You just have to know what you’re getting into. IMO there will always be a need for doctors and they will likely still be compensated relatively well, there’s just a whole lot of other crap that comes with it and stressors. However, that’s how any job is. Law, engineering, tech, etc., they all have issues. While job security in medicine isn’t as great as it used to be, it’s still pretty good compared to most other jobs. I too couldn’t see myself doing anything other than medicine. Not because of some altruistic higher calling, but because I sucked in a lot of other subjects/courses and had zero interest in that field. Certainly there are some jobs that I never knew existed back in college, but even then I still don’t regret my decision to do medicine.
You’ll also notice a trend among doctors to whine and talk about how it all used to be better in the past (usually just before we started practicing, no matter when that was.) I’ve been over the historical salary data and as near as I can tell there never really was a golden age. In fact, in emergency medicine, I have no doubt that THIS is the golden age. Emergency docs have never been paid as well as now, even inflation-adjusted.
Sure. But there is an old saying that if you can be talked out of it you should be.
I think the message, however, particularly from PIMD, is that you want to not be completely dependent on medicine for your entire income for your entire career. Take care of business early on (student loans, mortgage, nest egg, alternate income sources) and don’t just assume that medicine will be a nice stable income for your entire career.
Looked into this as well and the golden age appears to be a very brief stint after medicare was instituted and before HMOs came on the scene. “Enterprising” physicians seemed to make the most of it and it was quickly clamped down on.
I dont think any one job is secure, but having a job at all, or the ability to make your own job is nearly unprecedented in other fields. Yes its expensive and stressful, and likely argues that one should have a larger emergency fund to reflect that reality.
We’ve given so much power to systems that they are effectively monopolies, and I can see our pricing power diminish in the future. Maybe they wait for the next recession or over a dinner of large system CEOs at some conference. It could happen.
Hi Michael,
My 2 cents as a somewhat newly minted MD (~5yrs in practice):
Specialty Matters – I’m lucky enough to be an independent contractor psychiatrist in private practice; and so far partially immune to *some* of the adversities most “regular” (read: stethoscope and white coat) docs face.
Beware the Caribbean – Increasing class sizes, high cost, and stagnant growth of residency positions means match rate is trending down for most schools- and when you do match odds are it will be in primary care-type positions.
Check your Gut – I find this article by PIMD to be very accurate – if you are getting into medicine only for “stability” and financial reasons, it’s still possible, but a much tougher slog these days.
Good luck!
I don’t know that medicine is any less stable than any other job. It’s probably more so. In my field there is a big risk of losing the hospital contract, but honestly the new contract holder (or the hospital should it want to employer us) is still going to want the individual docs. And I’m in a pretty easy place to recruit to. If you’re in a small town in the Midwest, your job is probably far more stable than most jobs in America.
The job situation in medicine isn’t any scarier than the job situation in other fields. The point of Passive M.D.’s post is that being a physician today doesn’t equal job security for life. No one in America, in any field of work, has that any more. So don’t borrow more for your education than you actually need, pay down that debt as fast as you can, and live like an ordinary person instead of a wealthy one and bank the difference. That way you’ll have the flexibility you need to adapt to changes in the field. Don’t trap yourself into a “rich doctor” lifestyle which will require an ongoing large paycheck to maintain, and don’t become complacent!
I’m watching in fascinated horror as my local children’s hospital is undergoing a complete meltdown. A few months ago they hired a new CEO, and subsequently several docs who’d been working there for 17+ years were fired (without cause), and most of the rest of the pediatric surgery staff has quit in disgust and moved on. If you’d asked me six months ago, I’d have told you the place was rock-solid stable, and would have laughed if you’d predicted what is happening there now. Change can come from out of nowhere, and fast!
Well, as a fellowship trained anesthesiologists, who has worked in 6 different places I can say this:
1. sure every person is replacable BUT
2. my work = stable = bond- like income = available
what do i mean? Someone is Always wanting to do a procedure on a sick patient, and they need/want anesthesia. I find myself getting job solicitations in email, and locums emails and frequently have more overtime overnight calls etc than i desire at this point. Would i do it again today if i was a freshman undergrad student? No, but I might be wrong in that thinking as most post high school education has become absurdly expensive, and a crap ROI.
Well, as a fellowship trained anesthesiologists, who has worked in 6 different places I can say this:
1. sure every person is replacable BUT
2. my work = stable = bond- like income = available
what do i mean? Someone is Always wanting to do a procedure on a sick patient, and they need/want anesthesia. I find myself getting job solicitations in email, and locums emails and frequently have more overtime overnight calls etc than i desire at this point. Would i do it again today if i was a freshman undergrad student? No, but I might be wrong in that thinking as most post high school education has become absurdly expensive, and a crap ROI.
My advice: Do whatever you enjoy, but minimize debt, live below your means, save like crazy, enjoy life like mr. money mustache (freedom is the most important thing money can buy)
I definitely agree it depends on the specialty. These effects are seen across the board but more so in some fields than others. It sounds like the writer specializes in anesthesia – CRNAs have excellent jobs and are becoming more prevalent, and anesthesiologists depend on hospital contracts. I’m in ophthalmology and definitely have not heard that our specialty is feeling as much of the above. My motto is that you manage the risks as you go. All businesses, including medicine, have their risks to manage, including competing specialists and threats of lawsuits.
Sobering but accurate post! An additional note: a large insurer can drop you as a provider for no reason at all….this has happened in MD TWICE in the past seven years: our Medicaid program is farmed out to private insurers [seven of them] and, in general, this system works fairly well……however, working in inner-city areas and providing services [Primary Care] to very low income patients and accumulating a panel of 300-400 patients under any given insurer can be a “risk”……the insurer can decide that inner city areas are just too expensive to cover and they can send you a “thank you for your ten years of providing service….nothing is wrong with what you have done as a provider…but we are dropping you with 90 days notice”…..oh, gee, ‘thanks a lot!’…….the ‘good news’ is that having strong, positive relationships with patients matters and most will switch to another insurer that still keeps you on their panel and that 90 days notice is sufficient to retain most of the patients that your practice would have lost…..but it brings home the point that, in my opinion, physicians are totally blind to the need for organizing ourselves and negotiating better contracts!! I agree that developing ‘passive income streams’ is a great idea; as well as living modestly and saving and investing.
Relatedly, I also think it is ridiculous that physicians can “opt out” of taking Medicare or Medicaid insurances……lots of federal and state funding goes into our medical education and GME …….we, as a profession, put ourselves in a precarious situation when we act in our narrow best financial interests [not taking what is sometimes lower reimbursement rates for services under government insurance schemes] ……so I suggest that we consider combining an “obligation” to accept publicly funded insurances [when we accept state licenses] with a “right” to negotiate some contract terms….ONE of them being that you cannot be dropped as a provider without “cause”.
rel
Regarding taking medicare/medicaid insurances, I can definitely see why some physicians are not willing to accept them. Even I, a premed, after reading some post about a surgeon earning only $6 for a hernia repair because they accepted medicare/medicaid puts me off.
……that does not sound accurate to me…..would check out that post……..I would suggest that the major point here is that ALL the other “big players” in health care are highly organized [the hospitals; the big pharm companies; the insurers] and WE , as physicians are NOT……the AMA has lost most of its ‘clout’ the past 40 years [which is probably a good thing since it opposed nearly every major equitable movement in health care! including Medicare and Medicaid] ……organizing physicians at a state and perhaps even ‘regional’ level could be a better idea and approach…….if we remain out here as ‘individuals’ we likely will not have much input on major decisions that affect both our patients and our own lives.
We are not who the AMA cares about. Their money mostly comes from ICS/CPT coding. They only really care about that. They are a bad organization as far as advocating for physicians.
Over recent years I’ve come appreciate this more and more. I do have a healthy concern of where I’ll be working and making money 5, 10, 20yrs down the road. No longer is it about setting up your own shop, being a pillar in the community and working the same place, the same way your entire career. Private practice is an uphill battle that I’m not yet willing to do, insurance is changing and challenging doctors, partnerships and agreements can change or sour as I’ve seen from many colleagues, employment can go in any direction. Nothing is so secure anymore. I’m early in my career and despite my willingness to stick to medicine for the long haul, and be a part of the community forever, I’m padding my accounts when I can. That means putting off buying a house until I feel a little more secure, taking advantage now when things are going good and I’m willing and able, and not opening the purse string too much just yet. Living in a HCOL area, my margins are a bit thinner.
You mentioned that you’re not yet willing to go into private practice. What kind of change are you awaiting before you’ll consider going into private practice?
For me, personal financial security and/or enough bs from my other options that PP is the best option.
Definitely a sobering post, and I know of 2 friends who were bamboozled by their Anesthesia groups that sold out right before they became partner. The issue of health conglomerates taking over the brand is particularly concerning for me as a small private practice surgical sub-specialist.
I will disagree with somewhat on the solution being passive income streams. The solution is to achieve the super power of Financial Independence. Can passive income streams get you there? -Yes. But in my experience it is far more profitable for most physicians to get paid more at their primary job. Branching out with “side hustles” in medicine are likely to pay more as well. Creating a large gap between savings and spending and using a passive investing approach is a better hedge against job insecurity. Win the game early , then who cares if there is uncertainty.
I sometimes feel like a nay-sayer or doomsdayer when I’m generally a positive and optimistic person, but I see corporatism as a much larger problem than many others seem to. The further we move away from a free market and transparency, particularly in healthcare, the more these scenarios will continue to happen. Job security for a large amount of people is shrinking; gone are the days of the gold watch or having a small private practice and a long, healthy career in one place. The gig economy, contract work and locum tenens are all on the rise.
I don’t know what the solution is, but I have always felt that free markets provide more options, choice and power to the consumer and the people. Oligarchies and oligopolies are the antithesis to free markets, free choice and competition. All of the consolidations, mergers and acquisitions in healthcare are limiting physicians choices and driving them to become corporate employees fighting to defend their jobs. The same is happening in private practice as they get bought out by the hospitals.
Saving, budgeting and investing as all the more crucial now, particularly as student loan costs rise and wages may not grow or even be cut. Look into side gigs, other ways to use your training and degree, and make the goal of FIRE a priority should you need it.
This is something I’ve been saying – medicine is no longer a secure job. I’ve been out of training for only several years and have seen certain patterns. If you work at a hospital, you can easily get booted if you don’t fall in line. This goes for chairman/chiefs/higher level positions. If you’re in private practice, the older physicians are just looking to scut out the younger docs. Higher volume is the name of the game. Solo practice is difficult if you have heavy student loan debt and haven’t built up a reputation. As far as I know, doctors aren’t allowed to unionize.
The exact scenario described in the opening is happening to my husband’s anesthesia group, effective March 1. It’s been extremely frustrating and they had no room to negotiate since it was a hospital network decision (in reality it was so the hospital network could get out of paying the national anesthesia group certain stipends if they awarded all 15 of their hospital anesthesia contracts to the national group…). We considered leaving like a couple of the other doctors in the group, but one of the doctor’s leaving is joining his 4th new groupas this same scenario has happened to his previous 3 groups. We decided it was better to accept the pay cut and stay in an area we adore rather than move (with its costs), sell our home (with its costs), join a new group as an incoming associate instead of partner (with its loss of income), and have it potentially all happen again in a few years (like the other doctor leaving. This is the story happening in anesthesia and we don’t feel like anywhere is immune and would just be a matter of time). Even though we are only 5 years out of residency, we don’t have any debt outside of our mortgage and since we bought a great home that was only 1.25X our annual income, we can easily afford our 15 year mortgage payments even on our upcoming decreased income. We have been very diligent about saving (thanks so a much higher income in his first few years than we ever expected to make) and just hit our first million (if we include home equity and since we live in a highly desirable area…I’m going to count it). Therefore even with the pay cut, we are going to be just fine and it’s been a good reminder to us that money isn’t everything. Supposedly there will be “income repair” over the next 5 years and maybe his income will return to what it once was, but we’ve been grateful we followed the important financial rules early on so that we can handle this paycut without financial ruin or having to leave an area and job we love. Maybe the job won’t be so great and in 5 years after we fully receive the entirety of his small “buy out,” we may end up leaving. I guess it was good to go through this so early in his career as we now have a healthy dose of skepticism regarding the permanence of any job out there.
That’s the story I hear all the time. Docs no longer own their jobs/groups but still have a job.
This has happened to us as well. The hospital my husband worked for cut physicians salaries in a majority of departments and put everyone on a comp/commission-based plan for part of their salaries like sales reps. So many physicians had to leave a place they loved living (us included) not just because of the salary cuts, but the ways in which they treated physicians, lack of communication and other negative changes at the hospital.
Completely anecdotal, but I know 3 people laid off 2 weeks before Christmas, one in IT and two in biotech/device sales due to mergers. In many industries, job security is not like it was several decades ago. Turnover is high, but many employers must still see a fiscal benefit to offset the high costs of turnover (offsetting the costs with cutting salaries/benefits).
Well, this article was well-timed. I just received my termination notice yesterday. This occurred largely due to the loss of hospital contracts.
Also, I just saw a posting for what appears to be vetting of a machine learning AI program (pathology) based out of Memorial Sloan Kettering.
Can’t help but to want to make hay while the sun shines and reach FI ASAP.
There is likely no more secure high paying job than being a physician in our economy. I agree with the premise of the article if the default is to think “I could never lose my job if I practice good medicine”, but that’s just not how capitalism works for anyone, so I think that’s an inaccurate default.
Disheartening to see that the first response in the comments had the effect of striking fear in a reader.
High paying jobs as a whole act a bit like the stock market – high risk high reward. Given the extreme barrier to entry, an MD is more medium risk high reward. Whether it’s pro sports, finance, tech – pick the high paying industry – I’ll bet big $$ that involuntary turnover rate dwarfs any doc turnover.
I like that, medium risk high reward. But I think I’d phrase it low risk, medium reward. There are no stock option type scenarios in medicine and it really is a pretty secure profession, even if every individual job itself isn’t so secure.
Of the scenarios worth worrying about the in the post, the licensing issue is the one that I think can be most scary. No guarantee of justice from state licensing boards.
The concept that Job Security in Medicine is a Myth really hit home this last year.
I used to think that being a physician almost guarantees you job security because it is a skill set that will always be in high demand. While that may be the case in some areas, in other areas it is not.
I have knowledge of I four colleagues that were essentially blindsided and left my workplace in the past year or so. I am not aware of their personal finances but I could only imagine the shock to the system that must have created financially. A close friend of mine has still been looking for full time employment for over 8 months as he wishes to remain in the area for stability for his kids who are in high school. He bides his time with locum work.
We are definitely all replaceable. The hospital/medical field owes us nothing despite all the sacrifices we gave for it. Administrations are practicing bottom line medicine and if there is a cheaper alternative that will often take precedence even if there is a known decline in quality. As long as the quality remains above the standard care of medicine, they have no issue with this.
It is much more financially efficient to run a system with 10 mid level providers than a couple of physicians and soon we may see ourselves on the extinct list. This is not even considering advances in AI/automation that has been hitting other industries hard but soon will try to turn its eyes to us.
One of the (many) attractions of medicine for me was the idea of NOT being an employee. I see many young physicians now seeking out the umbrella of employment. Many want shift work in order to enjoy being completely off duty at other times. Others feel it is more secure than the vagaries of private practice. And of course the macro factors have made small private practices difficult. I don’t know what to tell young docs other than that I hope doctors will continue to try to find ways to retain independence and control over their work lives.
In my case, I am fortunate to be in psychiatry where one can still have a high paying independent solo private practice. While I had intended this, my transition to private practice was hastened when a colleague many years ago overheard a conversation with my boss at the academic center: “We need his line to add another researcher. Let’s start referring him a lot of private patients, and in the meantime we’ll increase his workload in the hospital. He’ll figure out what to do.” I went in the next day and made an amicable agreement to leave at the end of the academic year.
I also received the advice from my teachers in residency that “It’s mighty cold out there”, meaning private practice docs were always scrambling for patients. It turned out my teachers were a self-selected group who preferred employment. A few years later I was in a comfortable private practice where no one can fire me except my individual patients, and all of my teachers were let go in a reorganization of the medical center.
Another solution for job insecurity is working in a government job. Even with furloughs and shutdown, government jobs are some of the most stable out there. Prison, the VA, and public hospitals generally provide long term job security. It’s better if you belong to a union. Administration can try to move mountains to push you out, but you’ll have so many protections against any moves against you. The peace of mind is unbeatable.
Interesting position to take 28 days into a government shutdown.
The largest government employer of physicians, the VA, is not yet affected by the federal shutdown. It’s also not a case of an employer trying to push out physician employees they don’t like or replacing them with midlevels.
I hate to burst your bubble, but there is limited job security even with the government. I work in an overseas military facility as a GS doc. Physician unions are not allowed overseas. They can choose not to extend you here. It doesn’t matter if your children are in the local school, your wife is native (German, Korean, Japanese – depending on where you are located) and you own a house. If command chooses not to extend you here, you go on a placement list and have to take the first job they offer you stateside, no matter where it is, and you have less than a week to choose to accept. If you do not, you are terminated from service. Not much peace of mind, but the opportunity to live overseas is pretty cool.
You are right. I should have added the military as an exception. People have fewer or different rights when working for them.
It also demonstrates the importance of having a unionized job when employed. Unionized employees generally have protections from being fired just because you don’t agree with moving to another position with a week’s notice.
Nicely stated. This is yet another reason to have an emergency fund. I just penned an article about this concept. ( https://drcorysfawcett.com/us-government-shutdown-proves-the-need-for-an-emergency-fund/ ) I wonder how the doctors who work for government agencies are doing in the midst of the government shutdown? I haven’t heard anything about the VA system during the shutdown. A delayed check is not the same as a lost job and no more paychecks, but if you are not ready for it, it can hurt a lot. Prepare for the worst and you will be ready for anything.
Dr. Cory S. Fawcett
Prescription for Financial Success
The OTHER option that was brushed aside in this article is for physicians to not cave in and join big health organizations, but become medical entrepreneurs. Although it is harder work to run a private practice now, it pays huge dividends if done correctly. Rather than having our jobs taken over from midlevels and feeling like victims, we can build our own “brand” and employ midlevels to work UNDER us. You can build a practice that suites you and your medical skills and ethics. There is definitely a market there to take advantage of as many patients are now seeking out smaller clinics, which give them personalized care. Many Americans want to feel like individuals rather than cattle being rounded up in large hospital systems.
I understand your idea is good in theory, but hardly applicable to all specialties. So blaming doctors for playing the victim when there may be no alternatives available is not productive. The whole point of the post is that medicine has changed and will continue to change and while everyone’s career circumstances may vary, it’s alsays solid advice to be smart financially so that when unexpected twists and turns happen in your career, they won’t upset your overall financial footing and goals.
Thank you for an objective reality check on the current state of the medical profession. From the completion of my residency in 1994, I have been shocked by the prevailing negativity amongst docs, hospitals and medical societies which focuses on crises and problems over successes or creativity and change. Despite this, I love what I do and the honest authentic connection I share with patients and the impact I have on their lives. I have undergone 25 yers of self reflection and evaluation to free myself from the confines of my dream of the life of a doctor seen on TV or in the imagination of my youth. Instead, I’ve been forced to choose and create a work life that mirrors my passions and uniqueness within the limitations I place for myself and medicine holds in front of my path. I was fortunate to begin my private practice and form my group but realize what I value and have enjoyed may not last forever with the Kaiserization of medicine. There is no job that escapes its downsides. It’s up to each of us to stay true to what brings us joy and make choices that are true to our soul and not based on fear and safety. If you can follow what is true to who you are, you will be able to enjoy medicine or any path you choose.
Yes! This is part of why I recommend ALL physicians aggressively pursue FI (Financial Independence) even if they don’t plan to retire early.
Like it or not, life can change fast. The environment may worsen. Or your health may fail. Or your job may be eliminated.
When you are FI, you have options. I know several highly engaged and super-smart physicians in many different specialties whose jobs were unexpectedly eliminated.
Hope for the best, but prepare for the worst.
Via email:
# 1 Please note that there is a physicians Union, Doctors Council.
Check it out.
http://www.doctorscouncil.org/
# 2 I have a personal experience as you describe in today’s Blog Post. In a modern world, there is no job security.
Thank you for what you do. I have been enjoyed to read you books and daily notes for years.
another union: https://www.uapd.com/
the time for collective bargaining has come for employed physicians
Does anyone have the experience of this happening at the university hospitals? I’m talking the big super stable ones like the Ivy League or equivalent? I feel like those are more stable and you take a pay cut for that, but I could also be deluding myself.
My experience above, Post 10, occurred at an Ivy League institution
“Take a haircut or take a hike” happened in my specialty’s dept during medical school and many docs left, then the same thing happened at my residency institution. Neither were ivy league, but both are huge institutions that have been around since the 1800s. Fortunately they had large pp groups in town that were happy to welcome them in.
Before the rise of Wall St ( I would say, late 80s-early 90s), a doctor’s salary was truly one of the highest compared to everyone else’s.
Then came Wall St with its 1-2 mil X-mas bonuses for 23-24 yr old brokers, and the world changed quite a bit.
But I think you’re right about ED being on top now- despite all the attempts at health reform, the ED visits just keep on going up. But the mid-levels’ presence in the ED is also going up.
….regarding “government employment”……I have worked at the FDA for ten years, having started a “second career” rather later in life…..but retained my role in a private practice begun 35 years ago and only see patients in clinic about 8 hours per week….8 hours that I truly enjoy and being in Pediatrics am now seeing my “second generation” of patients which is quite rewarding…..the “kids” from the 80’s and 90’s now have their children and it all feels very good. Many of the physicians that I work with opted out of staying in academia for many reasons, but I think “job security” was a major factor for many. None of us were in the most highly remunerated specialties [we are mainly I.D. or Allergy-Immunology specialists with Ped or IM primary residencies]. The actual salary is on the low side but when you combine all the bennies you get to about $250k/year which seems ‘reasonable’. We are members, if we wish to be, of a union [the NTEU] . Having grown up in the mid-west in the 50’s in a heavy manufacturing and heavily unionized environment, I would say that the NTEU is modestly “weak” but their representation still feels important and somewhat ‘protective’. I think most of us feel quite “secure” [nobody has been let go in ten years that I am aware of] and being in a science-based environment the issue of PA’s and NPs is not relevant since their training is not appropriate to the type of work that we do. [in strong defense of NP’s, we employ several in our clinical practice and they are great! Clinically they are very competent for primary care with strong M.D. back up and financially it works out just fine].
Someone mentioned that “doctor’s unions” are not allowed and I do believe that there are some old state laws that do tilt in that direction….there are always ways around such matters. I do not think that a union is the answer to all job insecurities…..however it could be one part of a set of solutions. More importantly, I think, are the wise counsels to live modestly, save aggressively and keep options open as much as possible.
As an “older physician” it pains me to hear the very legitimate complaints about practicing our particular profession. EHRs were supposed to be ‘helpful’ in some various manners but they feel like prescriptions from hell in many ways and need to be evaluated and substantially changed to enhance their positive attributes and lay off their ‘controlling’ functions. We are all going to be ‘evaluated’ by various metrics but if we don’t figure out ways to have a seat at those tables, our perspectives as physicians will not be allowed to influence what is determined to be “quality care” or “adequate management”. One of our biggest assets is our relationship with our patients. In primary care, patients still seem to value very much a sustained, respectful and helpful relationship with a competent provider that they trust and respect. In many ways we represent those best interests of our collective group of patients and we need to learn how to do that more effectively…….most of the things that really bother us as physicians also really bother our patients…..and, collectively we vastly outnumber the various ‘bean counters’ and organized powers…….but we need to learn how to play their game and we cannot do that as lone-rangers……it won’t work out well in the long run.
rel
The physician unemployment rate remains as it always has been. Extremely low. No assurance you can keep your job, with no changes, for an entire career. But about as good a chance as any that you will always be able to find work.
The field is changing. Far fewer people in small private practices. Many employees of large organizations. Less autonomy than in a small practice or going solo. But those sorts of practices are getting buried by paperwork and compliance regulations. Almost impossible for a small operation to keep up. It does work to effectively function as a per diem employe for a larger entity.
I agree that is is not as stable at it used to be but can anyone name a field that is more stable then medicine?
I think medical school can be a great return on investment. Those that it is bad for are the people who end up with 3X student loans and do not handle things well. It is very possible to get through med school and have a reasonable debt that can be paid off in a few years. Then have a couple of decades to really build wealth. The margins are just thinner then they used to be. But the ave med school debt is 200K now. I realize that some are going to be more and some are going to be less then average but there are ways to put yourself on the good side of that average.