Educational Debt and Physician Employment

A new study suggests that physician debt levels are having an impact on the environments in which they practice.

Specifically, data suggests that debt is driving physician movement away from traditional solo practice and toward employment in a group or salaried setting. Researchers conducting the study set out to explore trends in business-model selection among early career physicians. Specifically, they looked at how anticipated choice of business model by these physicians changed over the past 12 years, and whether the intended business model selection changed with the accrual of differing levels of educational debt. They drew their data from a voluntary survey of graduating students conducted by the American Association of Colleges of Osteopathic Medicine.

After conducting their analysis, researchers found consistent increases in mean educational debt levels at graduation, from $155,698 in 2007 to $240,331 in 2016. During that period,

the number of students seeking employment in government service dropped from 21.5% in 2007 to 7% in 2016. Among students with the least debt, 1.8% expected to work in HMOs in 2007, compared with 8.4% in 2016. Meanwhile, among students with the highest levels of debt, 13.6% predicted that they’d be employed by an HMO in 2016, up from just 1.9% in 2016. In addition, 15.4% of students with the least debt expected to work in private practice in 2007, as compared with 17.3% of those with the most debt. In every year that followed, students with the highest debt levels were less likely to go into private practice than those with the lowest debt levels.


As the study’s authors note in their discussion, knowing more about what influences physician work-setting choices is important. In particular, understanding the role medical education debt plays in this process is critical, as this knowledge has implications for both business and public policy decision-making. To offer just one example, given the extent to which shortages are emerging among certain medical specialties, it might be wise for policymakers to subsidize education in these areas. Sure, this is already happening to some extent, but hard data can help them fine-tune programs to address these issues more directly. Also, business strategists could benefit from understanding the degree to which debt influences physicians’ work plans.

If a health system wants to retain primary-care doctors, knowing how debt interacts with other factors influencing their choices could be very valuable. Meanwhile, practice leaders are likely to do better at reducing burnout levels among physicians if they have a good idea of what pressures they face. Being aware of the financial risks physicians who enter the lower-paid specialties face, they can design compensation packages to address this concern directly (such as loan payoffs), or at least provide compensatory perks that make them feel appreciated (think flex time).

Ultimately, of course, much of what drives medical education debt is beyond the control of provider organizations. Still, it makes sense for them to factor these concerns into their plans and to help their local, state, and federal representatives craft smart policies to address these problems.

This article appeared in the Physician Leadership Journal, July–August 2019

Topics: Education

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