How med-student debt could lead to a primary care shortage

Looks like your Social Security needs to be removed

Fine, so financial complaints by soon-to-be-highly-paid young physicians might not seem the most pressing issue in this recession.

But the Supreme Court’s ruling that medical residents must pay Social Security raises the issue of a possible connection between their debt burden and the shortage of primary care for the rest of Americans.

The Court had to decide whether medical residents are students — and thus exempt from Social Security taxes — or normal workers who have to pay them. The Mayo Clinic in Rochester and University of Minnesota were fighting a recent move by the Treasury Department to change residents’ status from students to workers.

Considering that first-year residents make about $45,000 a year, that translates into about $2,775 a year in Social Security tax at a 6.2 percent rate. (Residents still pay income taxes.)

The tax comes at a time when U.S. medical residents face huge student loan debts — a median of $155,000 in 2008. Paying that off means making monthly loan payments of about $1,700, which eat up almost half of each paycheck before taxes.

(By now, residents do have options that can defer or lower monthly debt payments, in some cases to a more manageable $364, according to the U.S. Government Accountability Office.) And medical students take on such a large debt with the expectation of high salaries later on, which will more than compensate them for it.

But there is a catch for the rest of us: The expense of medical education might be helping cause a shortage of primary care doctors.

The GAO lists salary as a reason some students avoid primary care in favor of highly paid specialties. Primary care physicians had a mean salary of about $186,000 in 2007, making them among the lowest paid doctors. (Some specialists earned more than double that amount.)

The American Medical Association says the debt burden may also keep low-income and minority students out of medicine. And those residents who take on the debt might have to moonlight — not the safest practice for a physician — to handle the financial responsibility.

So whether it’s a resident facing $150,000 in student loans or a federal government staring down trillions of dollars in debt, it looks like every little bit helps.

  • guest

    “The American Medical Association says the debt burden may also keep low-income and minority students out of medicine. ”
    What is the evidence for this speculation? This is a very interesting ( and completely unfounded) speculation given that these demographics groups traditionally gravitated toward primary care of the medically underserved . If you want speculation about black physicians, go to the experts— the black physicians’ groups such as the National Medical Association, Association of Black Cardiologists, etc. Going to the wrong association and NOT asking for any supporting documentation or rationale is unbelievably lazy reporting.

    • Anonymous

      I’m happy to call around. But the American Medical Association doesn’t exactly lack credibility. Nor is there a reason (at this point) to question its motive, as I haven’t seen this as a controversial statement. If reporters questioned every statement and stat they read, the news would never get out. In short: So you check the improbable, the potentially libelous, the controversial, the overly critical, the stuff from people with an ax to grind. (Especially politicians.) Does the AMA statement fall into that? I didn’t think so.