As claimed in this thread, some doctors are already struggling with loans. Take away subsidies and insurance and there will be less money flowing in as revenue.
It's not just the loans for medical school that these new physicians face, but higher malpractice insurance costs, less reimbursement from Medicare/Medicaid/Managed Care, AND the fact that the entire time they attended undergrad, grad, and residency, then they amassed DEBT while having zero income. Compare that with someone else.
The minimum is three years of residency. Quite frankly a ton of physicans see that if they only become a Ped or Fam Physician, then they're SCREWED. So they go longer and this can significantly add to their debt.
http://www.wsj.com/articles/SB10001424052748703389004575033063806327030
When Michelle Bisutti, a 41-year-old family practitioner in Columbus, Ohio, finished medical school in 2003, her student-loan debt amounted to roughly $250,000. Since then, it has ballooned to $555,000.
It is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single $53,870 fee for when her loan was turned over to a collection agency.
"Maybe half of it was my fault because I didn't look at the fine print," Dr. Bisutti says. "But this is just outrageous now."
Michelle Bisutti borrowed $250,000 to pay for medical school. The debt has since ballooned to $555,000. Andrew Spear for The Wall Street Journal
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To be sure, Dr. Bisutti's case is extreme, and lenders say student-loan terms are clear and that they try to work with borrowers who get in trouble.
But as tuitions rise, many people are borrowing heavily to pay their bills. Some no doubt view it as "good debt," because an education can lead to a higher salary. But in practice, student loans are one of the most toxic debts, requiring extreme consumer caution and, as Dr. Bisutti learned, responsibility.
Unlike other kinds of debt, student loans can be particularly hard to wriggle out of. Homeowners who can't make their mortgage payments can hand over the keys to their house to their lender. Credit-card and even gambling debts can be discharged in bankruptcy. But ditching a student loan is virtually impossible, especially once a collection agency gets involved. Although lenders may trim payments, getting fees or principals waived seldom happens.
http://www.amsa.org/AMSA/Homepage/Publications/TheNewPhysician/2003/tnp2.aspx
Drowning in Debt
As tuitions rise, medical students struggle with excessive loans.
The New Physician September 2003
by Jennifer ZeiglerVolume 52, Issue 6
What's the price of becoming a physician? For Kevin Rufner, a third-year M.D.-M.P.H. student at Tufts University School of Medicine, it will be one-quarter of a million dollars by the time he graduates. And that's not counting the thousands of dollars he will pay over the years in loan interest. By the time he finishes residency and begins paying back his $250,000 to the government and private lenders, his monthly loan repayment will look very much like a home mortgage.
Thanks to his enormous debt load-large even by medical-student standards-Rufner has made a difficult decision recently. Interested in working in international public health, he realizes the low pay associated with such jobs is not going to make a dent in the financial monkey growing on his back.
"For myself and for a lot of the others in the program, most of us look at doing public health 10, 15 years down the road, after our loans are paid off, which is a shame."
So instead, he's turned to a more profitable primary care specialty-maybe internal medicine with its $120,000 starting average, which is what his financial aid office tells him he will need to earn after residency to make his loan payments. In fact, he says most of his classmates have turned to other specialties for the same reason.
"The hardest part for me is why am I doing the M.P.H. now? I'm going to need to spend the first part of my career doing another discipline just to pay off my loans. I think a lot of public-health people have the idealism that money's not going to be a factor." They would be wrong in assuming so. Experts have been tying rising student debt to decreases in family practice and surgery residents for several years. With primary care's low pay and surgery's long residency, extending the amount of time loan interest accrues before beginning payment, these fields can become specialty pariahs to a student facing more than $150,000 in loans. Future physicians will also say that post-residency fellowships are less appealing if applicants have large debts to pay off.
Medical student debt has been rising at an annual rate between 5 percent and 7 percent throughout the 1990s, according to the Association of American Medical Colleges (AAMC), and a Council on Graduate Medical Education study found the average debt increased 211 percent between 1985 and 2000. These increases mean the average newly minted physician went from owing $59,885 in 1993 to $103,855 in 2002.
Not unrelated, tuition hikes have been staggering at many schools, particularly at public universities as states struggle with budget deficits in the billions. And since each tuition hike means more loans for all but about 17 percent of medical students who unbelievably graduate debt-free, financial aid officers worry that future physicians are reaching loan levels they won't be able to manage with today's lower reimbursements and the higher costs associated with medical practice.
Hitting students' pocketbooks
The news isn't encouraging. As endowments take a blow from the sluggish economy, schools have increased tuition. Georgetown University medical students will see a 3 percent increase to $33,600 for tuition fees this year, which Dr. Ray Mitchell, the dean of medical education, says is the target for annual increases. "My heartbreak is that we don't have as much grant money as we need," he says. "Clearly the earnings of the endowments are down."
Drexel University College of Medicine students are digging into their pockets for the $34,000 it will cost them to attend this year, reflecting a 5 percent increase. "We have tried to maintain tuition at the 50th percentile of the private medical schools," says Dr. Barbara Schindler, Drexel's vice dean for education and academic affairs. In fact, Schindler is right on target for private school tuition hikes, which mostly hover between 3 percent and 5 percent this year.
