Multiple analyses have predicted a forthcoming shortage of physicians in the United States, with an overall deficit of 37,800-124,000 physicians by 2034.1 The situation in ophthalmology is no different, with an expected shortage of 6,000 ophthalmologists by 2025.2
As a surgical subspecialty with minimum requirements for primary surgical procedures set by the Accreditation Council for Graduate Medical Education, residency programs must go through a multi-year process to add additional training slots. The number of ophthalmology training slots available through the San Francisco Match has increased slightly in the past decade, from 461 to 509, both due to the opening of new programs and increased class sizes at existing programs. However, it is difficult for ophthalmology residency programs to scale quickly and maintain the quality of their education, especially in times of economic uncertainly.
In this article, I will explain why.
SECURING FUNDING
Funding for residency education can be challenging to secure. The Social Security Act of 1965 established funding for Graduate Medical Education (GME) through the Centers for Medicare and Medicaid Services (CMS). The 1997 Balanced Budget Act, however, imposed caps on the number of residency training slots for which each teaching hospital could receive CMS funding. Most hospitals are over their cap3 and therefore need to use alternative sources of funding, such as clinical revenue or philanthropic support, to fund additional training slots that exceed the hospital’s cap. Teaching hospitals, however, often have small operating margins and may be limited in how they are able to deploy funding to support residency education.
RESIDENT COMPENSATION
In the United States, health care and related services make up a substantial portion of the economy. With inflation increasing this past year at a rate roughly twice that of the historical average, there is more scrutiny with regard to resident compensation and the cost of living throughout the United States. Resident salaries and benefits are often decided well in advance of the academic year in which they become effective, and many GME programs follow fixed formulas when determining resident compensation; this may limit a program’s ability to substantially change salaries despite inflation and other economic headwinds.
Philanthropic support for medical education, while not a significant source of residency funding, may also be at risk during times of economic uncertainty. This could impact educational resources available to support resident training, as donor funding is often used to support wet lab curricula and resident travel for academic meetings. In an effort to recruit residents, teaching hospitals may try to make their compensation packages more enticing by adding benefits such as housing stipends or matching retirement plan funds. Adding such benefits, however, might not be possible for all teaching hospitals and could detract from other core elements of the institution’s mission.
DEBT AND EMPLOYMENT OPTIONS
What, then, is the impact on current and future residents? The median amount of debt for those graduating medical school and entering residency is roughly $200,000,4 and most residents are not able to make substantial loan payments on a resident salary alone. Multiple studies note that future salary projections influence specialty choice among medical students. Ophthalmologists are in the top half of specialties for annual compensation, with an average annual compensation of more than $400,000,5 though average compensation does not tell the whole story. There are significant pay differences among ophthalmologists when one accounts for practice region, practice model and subspecialty. One can imagine that residents graduating in times of economic uncertainty may make different decisions regarding subspecialty choice or job selection when considering their personal financial situation.
The trend of private practice acquisition by private equity firms only further complicates the situation, as graduates are presented with fewer job options that are likely to lead to practice ownership and more options to work as an employed physician. A resident graduating with significant debt is likely more incentivized to join an existing practice, considering the costs of starting one’s own practice. A position as an employed ophthalmologist might offer a high starting salary that is enticing at first glance, but this has less upside potential compared to a job that has the potential to lead to practice ownership and associated ancillary revenue from entities such as an optical shop or ASC. A trainee graduating with substantial educational debt, however, may be unable or unwilling to accept a lower starting salary in exchange for a payoff that may take several years to materialize.
A RESIDENT’S POINT OF VIEW
BY RYAN LAROCHELLE, MD
Medical training is an all-encompassing endeavor, requiring long hours at work and rigorous review and preparation at home. In my experience, the average trainee feels uninformed about the state of the economy. As a former investment banker, I have at times become sheltered in my singular task of training to be the best physician I can and have consequently ignored the macro-environment around me. Our careers — and our patients — demand that of us.
From the resident perspective, information about the economy and job market largely funnels down to us through the lens of our attending physicians. While younger attendings such as my program director, Jeffrey SooHoo, MD, MBA, can describe the challenges of building a practice today, older physicians share their experience watching medicine continually evolve. “Medicine isn’t what it used to be,” they’ll say.
Usually, here’s what they mean.
Trending financial concerns
The rising cost of health care in the United States has placed pressure on insurance companies to reduce reimbursement and sparked political debate about curbing drug prices. Many private practices that once thrived can no longer justify remaining independent; with the expanding administrative burden and cost of navigating medical records and reimbursement, some choose to sell to private equity investors. Academic hospitals, while large and more capable of negotiating, face the same fiscal pressures.
Concerns and considerations for residents
In the wake of a pandemic that changed some practice patterns, and now in the midst of a global financial downturn, economic concerns for medical trainees are more urgent than ever. Can our country continue to support the health-care needs of an expanding and aging population? Will we as physicians be able to pay back our loans from undergraduate and medical education, which in some cases exceed $300,000? With the trend toward greater sub-specialization, will there still be well-paying jobs for us when we eventually finish our training? If nursing and technician shortages in the so-called “Great Resignation” persist, is our current practice model sustainable?
It can be easy to grow cynical. Friends in any other profession invested less time and less money to get to their destination and may face fewer of these uphill battles.
A rewarding career can be found
Our older attending physicians are correct: medicine has dramatically changed. But one thing has not: people still need doctors. The rate of diabetes and consequent retinal pathology is only increasing. People are living longer and are more likely to suffer from eye disease such as AMD, floaters, cataracts and eyelid malposition. While the demand for elective procedures may decline in a recession, the care at the core of our profession remains vital.
Longer training, declining reimbursement and economic downturn may lead some to question the return on investment for a career in ophthalmology. Economics aside, caring for patients’ eyes remains rewarding in and of itself. People value their vision tremendously; it is not unusual for a patient to tell me they’d rather be paralyzed or suffer a heart attack than go blind. As a trainee with little time to educate myself on economic policy and speculate about future directions, I am convinced that society will continue to value eye care and that our system will keep finding ways to make ophthalmology a viable career. OM
CONCLUSION
Despite rising inflation and the potential for a recession, ophthalmology residents can still enter a favorable job market. Although resident salaries may not always keep pace with inflation, residency is time-limited and earning potential after training is much more important. Downward pressure on reimbursement for procedures such as cataract surgery and intravitreal injections will force practices to manage revenue and costs in new ways to maintain the same level of physician compensation. Given the anticipated shortage of ophthalmologists, however, trainees should have little hesitation choosing ophthalmology as a career despite evolving practice models and an uncertain economic climate. OM
REFERENCES
- Association of American Medical Colleges. The Complexities of Physician Supply and Demand: Projections from 2019 to 2034. https://www.aamc.org/media/54681/download?attachment . Accessed Dec. 7, 2022.
- Health Resources & Services Administration. National and Regional Projections of Supply and Demand for Surgical Specialty Practitioners: 2013-2025. https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/data-research/surgical-specialty-report.pdf . Accessed Dec. 7, 2022.
- U.S. Government Accountability Office. Physician Workforce: Caps on Medicare-Funded Graduate Medical Education at Teaching Hospitals. https://www.gao.gov/products/gao-21-391 . Accessed Dec. 7, 2022.
- Association of American Medical Colleges 2021 Graduation Questionnaire.
- Leslie Kane, MA. Medscape Physician Compensation Report 2022: Incomes Gain, Pay Gaps Remain. Medscape. April 15, 2022. https://www.medscape.com/slideshow/2022-compensation-overview-6015043?faf=1 . Accessed. Dec. 7, 2022.
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