Domains of Wellbeing: Wealth
We’ve spent the better part of the past few months dissecting wellbeing as it pertains to professionals in the healthcare industry. While my work primarily focuses on physicians in leadership, the concept of wellbeing (and great need for more of it!) applies to anyone in healthcare leadership, not only physicians.
We’ve so far discussed three domains of wellbeing: personal life, work life, and health. Today we’ll dissect the final domain: Wealth.
Wealth can be understood comprehensively as finances, money, debt, and the ability to be financially independent. Physicians spend on average ten years longer than the general population in obtaining education and training. Therefore, they have less time than the average worker to save money for retirement.
AAMC data shows that students graduate from medical school with a median debt of $200,000 (1). For the average $200,000 graduating debt, total repayment over a physician’s career ranges from $365,000 to $440,000 under common repayment scenarios. This focus on debt repayment restricts career choices that affect the level of job and career satisfaction. In fact, according to the 2011 AAMC Medical School Graduation Questionnaire, nearly half of all medical school graduates reported that their training in practice management was inadequate, and more than 60% felt the same about their training in medical economics (2).
According to the 2013 Report on U.S. Physicians' Financial Preparedness released by AMA Insurance Agency, nearly half of the physicians who responded to a recent survey consider themselves behind in preparing for the financial future of themselves and their families (3). Survey results showed they reported gaps in personal financial knowledge and lack of confidence in financial decisions related to retirement savings, life and disability insurance coverage and estate planning. And while being a physician is certainly a well-paid job, a surprising finding in Medscape Physician Wealth and Debt Report 2019 shows that 25% of physicians age 60 and above have a net worth of less than $1 million (4). Nearly three-quarters of physicians who own a disability policy are not confident it will provide the necessary protection, and four out of ten physicians have not reviewed their disability insurance plan in over five years.
Medical Malpractice’s Hidden Financial Woes
Medical malpractice, or fear of perceived malpractice, is another significant aspect of physician finance that influences the other three domains of wellbeing. In 2018, American Medical Association (AMA) released a new series of trend reports in its Policy Research Perspective series (5). Highlights in the report include: More than a third of physicians—34%—have had a claim filed against them at some point in their careers, and the probability of being sued increases with age. Before the age of 55, more than 50% of general surgeons and obstetricians/gynecologists have already been sued. In 2015, the average expense incurred on medical liability claims was $54,165 – an increase of 64.5% since 2006. And while 68.2% of all closed claims were dropped, dismissed, or withdrawn, they are not cost-free. Each of these claims costs an average of $30,475 to defend. In about 25% of claims, the claimant received an indemnity payment averaging $365,503 for claims that closed in 2015—an increase of 11.5% from two years prior.
Without proper coverage, physicians have much more to lose than the cost of a settlement - health and wellbeing of the physician and their family, reputation, earning power, loss of patients, and increased insurance premiums. This increases risk for depression, suicidal ideation and suicide.
All of this affects physicians’ plans about their lives and careers. Surveys show that 54% of physicians plan to retire within next five years (6). This may or may not come true in the next five years, since with high debt it is not possible for every physician to retire but does reflect attitudes physicians have toward their job and career. Furthermore, 7 out of 10 physicians do not recommend healthcare as a career choice, 62% said they are pessimistic about the future of medicine and 55% describe their morale as somewhat or very negative. These attitudes have real consequences for physician engagement in their work, and not addressing the financial woes of physicians has a deleterious effect on the wellbeing of physicians. Addressing this domain is imperative for physician wellbeing.
Next time we’ll wrap up our series on wellbeing by looking back on what we’ve discovered and drawing some conclusions based on the data. We’ll also be able to map out a few practical steps physicians can take to care for their own wellbeing in the high-stress environment of healthcare work.
Sources:
Statement for the Record Submitted by the Association of American Medical Colleges (AAMC) to the House of Representatives Committee on Small Business: “The Doctor is Out. Rising Student Loan Debt and the Decline of the Small Medical Practice” Submitted June 11, 2019
Medical School Graduation Questionnaire, 2011 All Schools Summary Report, AAMC - https://report.nih.gov/investigators_and_trainees/acd_bwf/pdf/Medical_School_Graduation_Questionnaire_2011_All_Schools_Summary_Report.pdf
2013 Report on U.S. Physicians' Financial Preparedness. 2013 Report on U.S. Physicians' Financial Preparedness. https://www.amainsure.com/physicians-in-focus/2013-report-on-us-physicians-financial-preparedness.html. Accessed June 8, 2020.
Medscape.com. https://www.medscape.com/slideshow/2019-compensation-wealth-debt-6011524. Accessed June 8, 2020.
Guardado, J, Policy Research Perspectives, Medical Liability Claim Frequency Among U.S. Physicians, AMA, 2018
Vogel L. Many doctors pessimistic about direction of medical profession. CMAJ. 2018;190(45):E1342. doi:10.1503/cmaj.109-5669