Job stability and declining income (relative to work)

[Complete_newbie]

While the forum does talk about investing wisely, how do people feel re: job stability (any field) and stagnant pay/declining pay relative to work we are putting in?

I can tell in Radiology a lot of my attendings' grumble about current work environment and day dream about the past glory days.

Why talk about this? Well one of the fundamental premise of long term investing is ... actually investing. If there is volatility in job situation/ declining pay,I for one will definitely be spooked by it and may more risks in investment.

Just wondering what people are thinking...

[VagabondMD]

I am a 20+ year radiologist. The professional reimbursement has declined, over the years, but the efficiency has increased, and because of this, my salary has been impacted very little, over the last five to ten years. It's about the same.

Radiologists who were owners in imaging facilities may have seen their income drop as the margins in this business line continue to get squeezed, some to the point of folding the business. So a radiologist who had $500k of professional income and maybe another $250k of business income, now might have $450k of income. Cue the violins...

The bigger problem, as I see it, is that (non-procedural) radiology has turned into a sweatshop, and the quality of the work and work environment is dropping precipitously. I would not choose it as a career path today and recommend against it, but I have no regrets choosing it when I did, 26 years ago, and subsequently training and practicing through some wonderful times.

[Complete_newbie]

Vagabond MD wrote:

I am a 20+ year radiologist. The professional reimbursement has declined, over the years, but the efficiency has increased, and because of this, my salary has been impacted very little, over the last five to ten years. It’s about the same.

Radiologists who were owners in imaging facilities may have seen their income drop as the margins in this business line continue to get squeezed, some to the point of folding the business. So a radiologist who had $500k of professional income and maybe another $250k of business income, now might have $450k of income. Cue the violins…

The bigger problem, as I see it, is that (non-procedural) radiology has turned into a sweatshop, and the quality of the work and work environment is dropping precipitously. I would not choose it as a career path today and recommend against it, but I have no regrets choosing it when I did, 26 years ago, and subsequently training and practicing through some wonderful times.

Click to expand...

But salary/income staying the SAME over the last 5-10 years in and of itself is bad. That's my point. It should go up, no stay flat.

[Donnie]

Why should wages increase not, stay flat? There's a lot of assumptions in the statement that wages for any given job should increase ad infinitum, many of which may not be valid.

[Complete_newbie]

I mean we are quick to bust out FV function to calculate return on an investment then why not consider the same for the job with the doctor being the business himself? Shouldn't I think of it this way? I am the business that goes and generates money (this is purely financial thinking; understand why I became a doctor,but atleast economically thinking it) - shouldn't my income go up. Discount rate at least should match inflation.

That it doesn't is the norm, then I for one will ensure I get more income as I go along after graduation.

Will be curious to know the board's collective groupthink.

Comments on stability also appreciated.

 

[TheHappyPhilosopher]

Vagabond MD wrote:

I am a 20+ year radiologist. The professional reimbursement has declined, over the years, but the efficiency has increased, and because of this, my salary has been impacted very little, over the last five to ten years. It’s about the same.

Radiologists who were owners in imaging facilities may have seen their income drop as the margins in this business line continue to get squeezed, some to the point of folding the business. So a radiologist who had $500k of professional income and maybe another $250k of business income, now might have $450k of income. Cue the violins…

The bigger problem, as I see it, is that (non-procedural) radiology has turned into a sweatshop, and the quality of the work and work environment is dropping precipitously. I would not choose it as a career path today and recommend against it, but I have no regrets choosing it when I did, 26 years ago, and subsequently training and practicing through some wonderful times.

Click to expand...

Sweatshop. That is a great analogy. Diagnostic radiology is becoming a commodity. Ironically PACS which has made us so efficient and teleradiology which made our lives better has also accelerated this trend. Who cares though, in 20 years AI will be doing all that radiology anyways. No need for humans

[Complete_newbie]

TheHappyPhilosopher wrote:

Vagabond MD wrote:

I am a 20+ year radiologist. The professional reimbursement has declined, over the years, but the efficiency has increased, and because of this, my salary has been impacted very little, over the last five to ten years. It’s about the same.

Radiologists who were owners in imaging facilities may have seen their income drop as the margins in this business line continue to get squeezed, some to the point of folding the business. So a radiologist who had $500k of professional income and maybe another $250k of business income, now might have $450k of income. Cue the violins…

The bigger problem, as I see it, is that (non-procedural) radiology has turned into a sweatshop, and the quality of the work and work environment is dropping precipitously. I would not choose it as a career path today and recommend against it, but I have no regrets choosing it when I did, 26 years ago, and subsequently training and practicing through some wonderful times.

Click to expand…

Sweatshop. That is a great analogy. Diagnostic radiology is becoming a commodity. Ironically PACS which has made us so efficient and teleradiology which made our lives better has also accelerated this trend. Who cares though, in 20 years AI will be doing all that radiology anyways. No need for humans

Click to expand...

By the time AI replaces a radiologist (possible), alot of clinical physicans would be replaced. Computer vision is many orders magnitude difficult problem to solve than algorithmic practice of medicine based on input (patient complaint, physical symptoms) --> processing ---> output.

[VagabondMD]

Hmmm, "it should go up". It would be nice, but being a radiologist (or other private practice physician) ultimately comes down to revenue minus expenses. If your reimbursement per unit work faces downward pressure and your expenses (insurance, billing, salary for employees, other administrative, etc.) are flat or modestly rising, while your volume of work per physician stays the same, you are slowly losing ground. Sure, you may be able to turn up the work spigot (or cut staffing) to increase income, but even this has its limits.

I have been saying for the last five to seven years that the treadmill gets a little faster and the paycheck a little smaller every year. In fact, it seems lumpier than that as staffing and volume per rad are not so linear. Some years it's the treadmill going a little faster and others the paycheck is a little smaller and some a little of both. Welcome to the real world.

[Complete_newbie]

Thanks Vagabond. Would be curious to know if this is the case everywhere in a world with lukewarm REAL growth. For sure CEO incomes have skyrocketed...

[resident_1]

Just curious whether any midlevels are working in radiology? Or is it insulated by level of knowledge needed?

[Donnie]

Healthcare costs have outpaced inflation by at least double over the past 30 years, which I don't think is a sustainable trend.

If you want to think of a doctor as a business, then I think stock price should be compared to net worth and income should be compared to earnings, i.e balance sheet to balance sheet and income statement to income statement.

No business increases its earnings every year ad infinitum. Businesses generate a return because they either invest their earnings back into the business or return capital to shareholders (dividend or share repurchase). Flat to declining earnings businesses can still generate attractive returns at the right valuations.

[Complete_newbie]

@Donnie - makes sense the way you explain it but I am not relying on it. Will seek to increase income. Brute force savings result in growing nest egg. Can only save what I get, and if what I get is not growing then I can't increase savings.

[VagabondMD]

Complete_newbie wrote:

@donnie – makes sense the way you explain it but I am not relying on it. Will seek to increase income. Brute force savings result in growing nest egg. Can only save what I get, and if what I get is not growing then I can’t increase savings.

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You can join a practice that has a low starting salary or lots of retiring partners.

You can join a practice that has bad insurance contracts or hospital contracts that seeks to improve them.

You can join a practice that is looking to shrink the number of FTEs.

You can work extra shifts or sell vacation back to the group, where applicable.

You can join a practice that is in a rapidly growing area or is otherwise rapidly growing.

You can bring new services to your radiology group.

There are countless other ways to increase your income.

But if you join a typical radiology group in a mature, stable hospital/imaging center relationship, in a competitive market, year in and year out, your income will probably not change very much. The reimbursement trend is downward, and it is hard to fight this. Good luck!

[Dr Oli]

As a private practice specialist I think about this general discussion quite often. Our reimbursments are constantly declining on a REAL (i.e. inflation adjusted) basis, practically each year, from Medicare. This is worse with private insurers who are constantly sending "updated fee schedules" which should in fact be called "It's already time to screw you again". Even the recent health bill provides only 0.5% yearly updates on Medicare rates, certainly under the projected inflation rate and not even enough to make up for the 2% cut from sequestration that is still in place.

The only 'out' from this trend in my specialty has been the use of midlevels (basically just a way to increase volume to make up for decreased reimbursement although with that comes increased liability), and the heavy non-insurance based cosmetic nature of my specialty (which has also been cut into by companies raising prices and every non specialist and dentist who are trying to rebrand themselves as cosmetic specialists and open a local medspa...and then send me all of their mess ups when they have no clue how to treat their complications)!

I just can't see any other way that things get better financially from here as a private practice physician...unfortunately. I'm just glad I finished in time to have a few good years of income to put away for the future, and hopefully be able to save less as incomes decreases over the next 20 years.

Sorry to be Debbie downer! Am open to any more rosy projections if they're out there.

[Complete_newbie]

Vagabond MD wrote:

Complete_newbie wrote:

@donnie – makes sense the way you explain it but I am not relying on it. Will seek to increase income. Brute force savings result in growing nest egg. Can only save what I get, and if what I get is not growing then I can’t increase savings.

Click to expand…

You can join a practice that has a low starting salary or lots of retiring partners.

You can join a practice that has bad insurance contracts or hospital contracts that seeks to improve them.

You can join a practice that is looking to shrink the number of FTEs.

You can work extra shifts or sell vacation back to the group, where applicable.

You can join a practice that is in a rapidly growing area or is otherwise rapidly growing.

You can bring new services to your radiology group.

There are countless other ways to increase your income.

But if you join a typical radiology group in a mature, stable hospital/imaging center relationship, in a competitive market, year in and year out, your income will probably not change very much. The reimbursement trend is downward, and it is hard to fight this. Good luck!

Click to expand...

you are the best Vagabond. thank you for all the great pearls you drop and expound upon. You're like the Rad version of WCI

as an aside I am going to be in academics - but am questioning the decision since PP money was hard to pass up.