I was asked to give a presentation on financial planning to fellows attending this fall’s annual meeting of the American College of Chest Physicians. In preparation for that presentation, I...
The results of the annual residency and fellowship match were just released and once again, there were specialties that were losers and those that were winners. But if you dig into the data, there is some pretty interesting information that says a lot about the economics of physician career choices.
The residency winners
One way of judging popularity of specialties among new physicians is to look at the percent of available residency positions filled by U.S. medical graduates – the higher the percentage, the more popular that particular residency is. A second way of judging specialty popularity is the percentage of available residency positions filled by all applicants (both U.S. and foreign medical graduates).
As in previous years, the big “winners” were plastic surgery, dermatology, orthopedic surgery, and otolaryngology. In all 4 of these specialties, more than 90% of available residency positions were filled by U.S. medical graduates. These are very competitive residencies; for example, there were 216 U.S. medical students applying for only 26 dermatology residency positions and 200 U.S. medical students applying for only 159 plastic surgery residency positions. According to the 2017 Medscape compensation report, these 4 specialties are also among the most highly paid specialties with average annual incomes that exceed $385,000.
The residency losers
On the other end of the spectrum, there were 4 specialties that once again filled their available positions with 50% or fewer U.S. medical graduates: pathology, internal medicine, family medicine, and neurology. As in the past, most of the open residency positions were able to be filled by foreign medical students.
All of these 4 specialties have salaries that are considerably less than the residency “winners” – for the primary care specialties (internal medicine and family medicine), annual incomes are more than $150,000 less. These 4 specialties are much less competitive; for example, there were only 1,797 U.S. medical students applying for 3,356 family medicine residency positions and only 3,837 U.S. medical students applying for 7,233 internal medicine residency positions. I should point out that the income data listed above for internal medicine is for those internists who do not do a fellowship whereas the residency fill percentages listed above are for all internal medicine positions, including those residents that eventually go on to do fellowships.
The fellowship winners
As a general rule, subspecialty fellowships are less competitive than residencies with about twice as many fellowship positions available each year as there are U.S. medical graduates applying to them. Although many specialties offer different types of fellowships, the largest number of fellowships are in internal medicine. Once again, there were 4 subspecialties that had the highest percentage of available fellowship positions filled by U.S. medical graduates: gastroenterology, cardiology, pulmonary & critical care medicine, and hematology & oncology.
These are also the most highly paid specialties in internal medicine with annual salaries of more than $320,000.
The fellowship losers
Just like last year, there were 4 subspecialties that had a very hard time attracting U.S. medical graduates: nephrology, geriatrics, endocrinology, and infectious disease. This is why in a previous post, I proposed that these are the most valuable specialties in your hospital since we will soon be facing a significant shortage of these physicians.
These 4 subspecialties are also the lowest paid of all internal medicine subspecialties. The 2017 Medscape compensation report does not list the annual salary for geriatrics so the general internal medicine salary is listed here, since it should be quite similar. Endocrinology deserves special mention since their reward for doing the additional years of fellowship training after internal medicine residency is to make $5,000 a year less than a general internist.
Pediatric subspecialties were similar to internal medicine specialties with the subspecialties having the lowest percentages of fellowship positions filled by U.S. medical graduates being pediatric nephrology (30.5%), pediatric pulmonary (31.3%), pediatric infectious disease (36.4%), and pediatric endocrinology (39.8%). Notably, in pediatrics, pulmonary is a different fellowship than critical care whereas in internal medicine, pulmonary and critical care area combined fellowship.
What are the odds of getting in?
Most graduates of U.S. allopathic medical schools (94%) got a residency position in the match. Your next best chance of getting a residency position is if you graduated from a U.S. osteopathic school (82%). Most U.S. citizens who go abroad to an international medical school (such as those in the Caribbean), did so because they were unable to get into a regular U.S. medical school – their chance of getting residency position was lower at 55%. Foreign medical graduates had a 52% chance of getting a residency. The group with the least chance of getting a residency were those who graduated from U.S. medical schools in previous years; this is a heterogeneous group of individuals – some were unable to match in previous years and others left medicine after medical school and then later decided to come back.
If we look at the entire 2017 residency position class, there were 27,681 positions filled. 63% were filled by U.S. allopathic graduates, 14% by foreign medical graduates, 11% by osteopathic school graduates, and 10% by U.S. citizens who went to international medical schools. The last group, U.S. allopathic previous graduates, accounted for only 2% of filled residency positions.
What can we conclude?
In the future, your primary care physician and hospitalist will likely be a foreign medical graduate but your plastic surgeon and dermatologist will likely be a U.S. medical graduate. Foreign medical graduates trying to get into the U.S. for a job or citizenship tend to be less choosy about specialties so they will often gravitate to those specialties that have the most open residency positions and are therefore less competitive.
The usual laws of supply and demand of capitalism do not apply to physician specialties. Normally, if the demand for a particular service exceeds the supply of people who offer that particular service, then the cost of the service goes up and consequently, the income of the people providing that service also goes up. However, with medicine reimbursed using an RVU system, there is a disconnect between supply and demand in that the cost to see a specialist stays the same regardless of the demand. Even if he was the last endocrinologist on the planet, that endocrinologist would have the same annual income as he does right now since he is paid by a fixed price per RVU and there is a fixed number of RVUs that can be generated during a work-day. The RVU system has a lot of advantages but one of its disadvantages is that it disrupts the free market system.
When it comes to specialty choices, medical students follow the money. Those specialties that have the highest annual incomes are the hardest to get into. Those that pay less are the easiest to get into. Although there are undoubtedly other factors that motivate specialty selection, the anticipation of maximized future income appears to be pretty important.
We can continue to anticipate a future shortage of nephrologists, geriatric specialists, and infectious disease specialists. Very few U.S. medical graduates are entering these subspecialties. Endocrinology is at least back-filling with foreign medical graduates. I envision a future when hospitals will have to increasingly subsidize nephrologists and infectious disease doctors and we could see bidding wars between hospitals for these increasingly scarce specialists.
The United States gets a bargain in foreign medical graduates. It costs a lot to educate a medical student and most colleges of medicine get some degree of funding from their state government. That funding in turn comes from taxpayers. When you bring in a foreign medical graduate, some other country’s taxpayers subsidized that foreign medical graduate’s medical school education and America reaps the benefits. Overall, 27,688 positions were filled in the 2017 residency match; of those, 17,480 were filled by U.S. medical graduates and 10,208 were filled by foreign medical graduates.
Physicians have a very secure career future. In the United States, we can’t home-grow enough doctors and have to import a huge number of them in the way of foreign medical graduates. Currently, 25% of U.S. doctors went to medical school outside of the United States. If you can get into a U.S. medical school, you have about as good of job security as exists in our economy.
April 23, 2017