Wellness Financial Stability and Its Impact on Resident Wellness

Financial Stability and Its Impact on Resident Wellness

By Kevin Hon, DO, and Ryan Pappal, MD, MSCI on behalf of the SAEM Wellness Committee

After the marathon that is medical school, residents cross the finish line to do what we dreamt of and sacrificed so much for: practicing medicine. Our progression into “adulting” and finally holding that first paycheck as a doctor is often an exciting one; however, depending on where some of us end up and after paying off the necessary evils of rent and (the elephant in the room) student loans, that first paycheck might not look so great. For some, emergency expenses, childcare costs, and family financial obligations, can quickly turn one’s financial situation into a significant source of stress and professional unwellness. As new residents, we’re expected to be completely devoted to our patients. Further, as newly minted doctors there’s an assumption that now that we have income, we can focus all our energy on learning. But surprise! We are not at all financially stable! In an ideal world, residents wouldn’t have to go home after caring for patients and worry about making ends meet from paycheck to paycheck; but we do.

Modern Day Context

So how did we get here? In 2021, the average intern salary was $58,921. While resident wages tend to go up each year, they don’t always follow the inflation curve. Furthermore, raises tend to vary even between institutions. For example, this year, Yale’s resident senate negotiated an 8% raise, whereas most other programs have only given raises in the 2-4% range. As inflation hit 8% this year, our salaries have yet to catch up. Thus, residents do not necessarily have more buying power than they did previously; in many cases, they have less. The average intern starts with $200,000 of medical school loans. Because residents are not expected to make a meaningful dent in their loans at minus $300 per month, if they opt for PAYE or REPAYE, this debt comes with the side effect of an ever-growing loan principal.

During the COVID-19 pandemic, with the interest-free provision from the government, most residents have not had to make any payments; however, the future of COVID-related student debt relief is uncertain and may not continue to be extended.

To account for the variable cost of living, some programs provide housing stipends and even increase resident salaries proportionally. Paying for a tiny studio apartment or living with a roommate in New York City would be nearly equal to a mortgage in Texas or Ohio. Moonlighting could be a viable way to earn extra income, provided that it doesn’t violate duty hours; however, some states, like California, have passed laws that essentially limit the ability of new residents to engage in this venture.

“In an ideal world, residents wouldn’t have to go home after caring for patients and worry about making ends meet from paycheck to paycheck; but we do.”

Challenges of Addressing the Current System

What can residents do? Negotiating for more pay during one’s residency is extremely difficult. After all, most of us acquire employment via The Match process. Negotiations are impossible when you do not know who your employer will be until the March preceding the start of your residency training. We are then contracted to our hospital for the duration of our residency. Everyone in that hospital receives the same contract with the same benefits. At the end of the day, the hospital gives us a paycheck.

True resident salary reform that puts financial stability and fair value for our labor into our salaries can likely only be achieved at the federal level. Realistically, the difficulty of forming a concerted lobbying effort that may overhaul the way the Centers for Medicare & Medicaid Services handles medical trainees probably puts such reform out of reach of medical trainees for the time being. Among the challenges is a lack of resident representation at the political level and the lack of stable resident leadership to push for those changes. There may be other options, however.

Unions

At some residency programs across the country, residents have taken it upon themselves to negotiate for their financial wellness by unionizing. Historically, these efforts have yielded perks involving parking, food, educational stipends for conference travel, childcare, and board prep resources. Resident unions have entered the public eye more recently with Los Angeles County-USC’s (LACUSC) union voting on a possible strike for improved pay and housing stipend after their contract expired. At the time of this writing, Service Employees International Union-Committee of Interns and Residents announced via their Instagram page that Los Angeles County+USC Medical Center voted 99% in favor of a strike. It is uncertain if a strike will occur as contract negotiations are still ongoing. The Accreditation Council for Graduate Medical Education requires all programs to have a house staff association to advocate for residents. Nevertheless, some trainees may feel that these groups do not have enough bargaining strength to effect positive changes for their residents.

For residency programs not part of a union, it’s important first to gauge interest and weigh the pros and cons of unionizing. While pushing for higher salaries can undoubtedly be part of collective bargaining, residents may have some understandable reservations, such as possibly having to strike and its associated implications on patient care responsibilities; fear of retaliation from hospital leadership; having to pay union dues (typically taken as a percentage of one’s new salary after negotiations); and the possibility that ineffective local union leadership may make things worse instead of better. Here are additional perspectives from the AMA Journals of Ethics and Reddit.

Some residency programs can provide for their residents out of their budget; whether your program is financially capable of doing so depends on how much it’s getting from the hospital, which is a whole other issue. What may be a helpful starting point is assessing the landscape in the local area: How does your residency salary and benefits compare with the salaries and benefits of other local residency programs?

Medical Student Aspect

What does this mean for medical students? When deliberating your Match rank list, consider the financial argument for each program. How much are residents paying for rent or a mortgage? Are they living with roommates? How comfortable would you be in that situation?

Residencies provide information regarding salaries and benefits on their websites, but don’t forget to ask about other perks a program can provide its residents. If you don’t ask, you won’t know what to factor into your consideration. For example, some programs offer a housing stipend to offset rent in expensive areas of the country. While it might be overkill to use that information to create a skeleton budget for each program on your rank list, it might be worthwhile to do so for your top ranks, to give yourself an idea of how much you’d be earning and spending in residency. Being proactive in these respects can help address essential conversations you’ll be having with your family members or significant others when you do make that decision to begin the next step of your career.

Financial well-being is shaping up to be the next frontier of resident wellness. As residents help develop wellness initiatives, a vigilant focus on the financial burden of residency may be beneficial in developing new and creative ideas to address this issue beyond residency salary and benefits. We must continue to educate ourselves on financial literacy, just as we are trying to understand cost-effective care. The more these issues are openly and honestly discussed, the better the chances we have for making meaningful change — not only for ourselves but also for our profession's future and sustainability.

ABOUT THE AUTHORS

Dr. Hon is a PGY-2 at NewYork-Presbyterian–Queens. He attended medical school at Western University of Health Sciences College of Osteopathic Medicine, Pomona, California. Dr. Pappal is a PGY-1 at Beth Israel Deaconess Medical Center in Boston . He attended medical school at Washington University School of Medicine in St. Louis.