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.