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

residents

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.