LAKE BUENA VISTA, FLA. – Academic surgeons earn an average of 10% or $1.3 million less in gross income across their lifetime than surgeons in private practice, an analysis shows.
Some surgical specialties fare better than others, with academic neurosurgeons having the largest reduction in gross income at $4.2 million (–24.2%), while academic pediatric surgeons earn $238,376 more (1.53%) than their private practice counterparts. They were the only ones to do so.
Several academic surgical specialties did not make the 10% average, including trauma surgeons whose lifetime earnings were down 12% or $2.4 million, vascular surgeons at 13.8% or $1.7 million, and surgical oncologists at 12.2% or $1.3 million.
“The concern that we have is that the academic surgeons are where the education of the future lies,” lead study author Dr. Joseph Martin Lopez said at the annual scientific assembly of the Eastern Association for the Surgery of Trauma (EAST).
Every year a new class of surgeons is faced with the question of academic practice or private practice, but they are also struggling with increasing student loan debt and longer training as more surgical residents elect to enter fellowship rather than general practice.
This growing financial liability coupled with declining physician reimbursement could rapidly shift physician practices and thus threaten the fiscal viability of certain surgical fields or academic surgical careers.
“The more financially irresponsible you make it to become an academic surgeon, the more we put at risk our current mode of training,” Dr. Lopez of Wake Forest University in Winston-Salem, N.C., said.
To account for additional factors outside gross income, the investigators ran the numbers using a second analysis, a net present value calculation, however, and came up with roughly the same salary gap to contend with.
Net present value (NPV) calculations are commonly used in business to calculate the profitability of an investment and also have been used in the medical field to gauge return on investment for various careers. The NPV calculation accounts for positive and negative cash flows over the entire length of a career, using in this case, a 5% discount rate and adjusting for inflation, Dr. Lopez explained.
Both the lifetime gross income and 5% NPV calculation used data from the Medical Group Management Association’s 2012 physician salary report, the 2012 Association of American Medical Colleges physician salary report, and the AAMC database for residency and fellow salary.
The NPV assumed a career length of 37-39 years, based on a retirement age of 65 years for all specialties. Positive cash flows included annual salary less federal income tax. Negative cash flows included the average principal for student loans, according to the AAMC, and interest at 5%, the average for the three largest student loan lenders in 2014, he said. Student loan repayment was calculated for a fixed-rate loan to be paid over 25 years beginning after residency or any required fellowship.
The average reduction in 5% NPV across surgical specialties for an academic surgeon versus a privately employed surgeon was 12.8% or $246,499, Dr. Lopez said.
Once again, academic neurosurgeons had the largest reduction in 5% NPV at 25.5% or a loss of $619,681, followed closely by trauma surgeons (23% or $381,179) and surgical oncologists (16.3% or $256,373). Academic pediatric surgeons had the smallest reduction in 5% NPV at 4.2% or $88,827.
During a discussion of the provocative poster, attendees questioned whether it was fair to say that private surgeons make more money without acknowledging the risk they face, compared with surgeons employed in an academic setting.
Dr. Lopez countered that, increasingly, even private surgeons are no longer truly private surgeons.
“More and more surgical groups are being bought up by hospitals, and even the private surgical groups are being bought up by hospitals, which does stabilize your income to some extent,” he said.
“We all still have [relative value unit] goals to meet and RVU incentives that make it so you can get paid a little more, but it’s something that’s a consideration. It is a risk-reward to be a private surgeon. Depending on how your contract is structured or how your group decides to pay the partners, it may be that if you don’t take very much call or take that many cases, you’ll end up on the short end of the stick.”
Dr. Ben L. Zarzaur, a general surgeon at Indiana University in Indianapolis who comoderated the poster discussion, pointed out that market pressures unaccounted for in the model can dramatically influence a surgeon’s salary over a lifetime.
Dr. Lopez agreed, citing how the increasing number of stent placements by cardiologists, for example, has impacted the bottom line of cardiothoracic surgeons. The NPV calculation was specifically used, however, because it gets at market forces such as inflation and return on investment, not addressed by gross income figures alone.
Finally, Dr. Zarzaur turned and asked the relatively young crowd what they would do if offered $600,000 a year, but had to work 110 hours a week or could get $250,000 and work only 40 hours a week.
Most responded that they’d choose the former to repay their student loans and then switch to the lower-paying position.
Responders made much of job satisfaction, work-life balance, and the ability of surgeons in academic practice to take time away from clinical work to conduct research, their ready access to continuing medical education, and their ability to educate the next generation of surgeons.
“Any time we see this academic-private disparity, you have to think about these secondary gains,” Dr. Zarzaur said.
“This is really interesting work. It gets into why we choose what we do, why we’d take $600,000, work 110 hours a week, and get our rear ends kicked. The flip side is, if I saw this, why would you ever go into academics? But people still choose to do it. I’m in academics so there’s a bias, but we choose to do it anyway up to a point. I don’t know where that point is, but up to a point we do.”