There’s a common belief that a career in medicine is a guarantee of financial security. As premedical and medical students, we’re frequently told that if we just put our heads down and finish our education, we will always have jobs and great incomes. Unfortunately, we never imagine that we’ll face a challenge as disruptive as the economic impact of COVID-19.
The fact is, our jobs as physicians are not insulated, or isolated, from the economy at large. Economies are complicated things, and all the participants are intertwined and interdependent. Few things have demonstrated our economic connection and vulnerability like our current global pandemic.
What physicians often fail to remember is that we are paid for seeing patients. Even if we’re employed, our employer makes money by billing patients. When patients lose insurance, don’t have money to come to the hospital or are urged (or forced by quarantine policies) to stay away, then the money in the system dries up and physicians are not paid. Healthcare and the economy are, after all, inseparable.
The Economic Impact of COVID-19 on Healthcare
I have personal experience with this. Having left a job in the autumn to transition back to locums, I expected that I would find a vast array of emergency medicine opportunities ripe for the picking. This had always been the case for those of us in emergency medicine, and I had no reason to think it would be otherwise as 2020 rolled around. But I also had no idea that healthcare and the economy would be ambushed by a virus none of us had ever heard of before. I felt the personal economic impact of COVID-19 when I found myself with no locums work in either March or April 2020 outside of telemedicine. I certainly wasn’t alone.
The 2020 Medscape Physician Compensation Report details how COVID-19 has affected physician income: “Practices report a 55% decrease in revenue and a 60% decrease in patient volume on average since the beginning of the COVID-19 crisis.” The report also notes that 43,000 healthcare workers were laid off in March. This included physicians. I personally know many emergency physicians who had hours cut or lost long-term contracts because emergency department volumes were down by around 40% or more. Others lost incentive bonuses or night differentials.
One physician wrote to me (anonymously) about losing shifts in her first job as an attending, just when she had finally attained the kind of income she had been striving for and making sacrifices for over decades. Her husband lost his job, too. Another was recovering from last year’s cancer when COVID-19 afflicted her career.
Illness can harm physician incomes in a devastating way. Even with health insurance, income is lost when we simply can’t work.
The Cost of Doing and Losing Business
This is especially problematic since the reality of medical economics is that most physicians have a lot of expenses. Debt isn’t the only issue. We have leases on buildings and equipment, we have employees and we have malpractice insurance to cover. In addition, those who are self-employed have to buy their own health insurance and fund their own retirement plans. There’s also the cost of continuing education and licensure. At the end of the day, physicians make a lot but spend a lot, and the economic impact of COVID-19 has made that reality more visible and more painful.
Those who were between jobs like me are in an especially difficult situation. For many, moving between physician jobs, even when there are opportunities, can take months to a full year because credentialing, and sometimes new state licensure, need to be obtained. It isn’t as simple as going down the street to the new hospital or the new urgent care — it’s a process that’s archaic and unnecessarily complex. But like many such entrenched corporate traditions, it’s unlikely to change much, no matter how badly employers need doctors or doctors need jobs, no matter how grave the pandemic. One physician who does locums told me that a company she works for dropped from 19,000-24,000 locums shifts per week to 4,000. The company and their physicians both felt that pain.
It gets more complex. The issue of healthcare and the economy often fails to touch on more personal issues that involve the lives and finances of physicians, just like everyone else. For instance, one physician wrote to me that she had just finished maternity leave when COVID-19 caused her to lose income. In addition, many physicians found themselves with children suddenly at home and few opportunities for child care. Furthermore, every parent became a homeschool teacher to some degree. These demands took physicians away from practice, costing them extra money to provide the care their kids needed at home. That’s an economic impact of COVID-19 few analysts consider.
How Physicians Can Brace for Economic Uncertainty
So what can a physician do to prepare for future shocks involving healthcare and the economy? Perhaps the most important is to have as little debt as possible. When I speak to residents, I advise them to live simply at first. Pay down debt and remember that debt is a kind of servitude, while time away from work is a currency worth hoarding. I also advise that they not buy a large, expensive home right away. Eventually, they should buy a nice but reasonable house that can be sold if their job doesn’t pan out.
Physicians should develop the habit of saving money. This is true of everyone, but because we have the opportunity to scale up our incomes based on extra work (especially in shift-work or procedural specialties), it’s easy to say, “I’ll just work more next quarter,” which is a great idea until a pandemic runs all the patients away and the CEO cuts your hours.
Finally, there’s a saying among emergency physicians who do locums, and it’s good wisdom for all physicians: “Always have another job.” Contracts change, administrations shift and personality conflicts rise up. It’s wise for every physician to have some sort of “side hustle,” whether it’s working for a local industry, teaching part time, practicing telemedicine, working in an urgent care clinic or whatever else is appropriate for one’s specialty. When things are good, put that money away. When things are bad, it may just get you through.
Let’s hope the economic impact of COVID-19 will fade away quickly. But we never know what’s just around the corner. We must remember that high salaries can fall, jobs can evaporate and, in the end, physicians are susceptible to economic downturn just like everyone else.
Fortunately, whatever happens, our skill sets are important and financially valuable. In uncertain economic times, that is indeed a comfort in the chaos.