New Physicians Lowball What They'll Earn, Study Says

September 19, 2017

Residents finishing up their medical training in 2017 know they're in high demand ― very high demand. Half of them say they've received 100 or more solicitations about job opportunities, according to a residents' survey issued yesterday by the recruiting firm Merritt Hawkins.

Why then do so many residents grossly underestimate what they'll earn in their first year of practice, asks a puzzled Phil Miller, vice president of communications at Merritt Hawkins.

Primary-care physicians are the worst lowballers. Fifty-four percent of final-year trainees in this field expect to earn no more than $200,000 as rookies, the new Merritt Hawkins survey reported. However, average starting salaries are $231,000 for family physicians, $257,000 for general internists, and $240,000 for pediatricians, according to the company.

"These figures don't vary that much based on years of experience," Miller told Medscape Medical News. In other words, brand new primary-care physicians should easily top $200,000.

Merritt Hawkins acknowledges that some residents may intend to work part-time, which logically would skew estimated earnings downward. However, "the 2017 survey suggests that primary-care residents are not aware of their market value and tend to underestimate it, probably based on their relative lack of experience," stated the report, which analyzed the responses of 935 final-year residents and fellows to an email survey earlier this year.

Financial expectations are a bit more realistic for residents in surgical specialties and internal medicine subspecialties, who can count on making at least $250,000 to $300,000 in their first year, Miller said. Gastroenterologists, for example, start out at $492,000; general surgeons at $411,000. Yet 42% of specialists-in-training told Merritt Hawkins that they expected to make no more than $250,000.

"It's surprising that their expectations are lower than what they should be," said Miller.

He suspects that this lack of realism about earnings stems from a perennial problem ― medical schools and residency programs don't teach trainees enough about the business side of their profession.

That inadequate dollars-and-cents preparation is borne out by survey results. Forty-nine percent of residents said they did not receive any formal instruction about employment issues such as contracts and reimbursement methods. And 38% said they were flat-out unprepared to handle such matters when they left residency training, while 52% said they were somewhat prepared and 10% very well prepared.

Residents Lean on Personal Networks for Job Leads

In 2006, Merritt Hawkins found that 16% of residents surveyed had received more than 100 job solicitations during their training. These inquiries take the form of phone calls, emails, and direct mail from headhunters at hospitals, group practices, and physician recruiting firms.

The fact that the 100-solicitation club now extends to 50% of residents illustrates the nation's physician shortage, Miller said. Its root causes include sheer population growth, the graying and ailing of the massive baby boom generation, and a limited number of slots in residency training programs, which chokes the physician pipeline.

Miller surmises that residents must feel flooded by sales pitches from the recruiters on their trail. He said the American Medical Association once asked companies like his to phone residents at night, not during the day, when they were more likely to be treating patients. "They said residents were getting too distracted by the calls," Miller recalled.

Only 18% of residents view recruiters as one of the most useful sources for learning about practice opportunities. The top source ― named by 66% of residents ― is a personal network, followed by residency programs (38%) and online job boards (23%). A personal network might include residency program alumni who invite former colleagues to join their practice, or steer them away from certain jobs. Other network members may include parents, siblings, and other relatives who are practicing physicians.

Miller said he understands why residents would rely so heavily on word of mouth. "It would be difficult to objectively analyze each job offer that comes in," he said, referring to all those solicitations. "It may be beyond the scope of what they have time for, or what they're equipped to do."

However, finding a job through network "osmosis" can lead to some inappropriate matches, he said. "Residents don't have a frame of reference to assess what a good practice opportunity would be for them."

Miller advises residents who want to understand the job market to do more than pick the brains of physicians who've already graduated from their program.

"Make a dedicated study of it," Miller said.

Follow Robert Lowes on Twitter @LowesRobert

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