Medical Residents and Health Care Subsidization
May 23, 2009 in Health Reform
A New England Journal of Medicine article, Cost Implications of Reduced Work Hours…, placed the cost of of the recent IOM recommendation to limit medical resident shifts without naps to 16 hours at $1.6 billion dollars. The study argued that the the benefit to patients would be low and that the shift in costs would be a burden to teaching hospitals. But if $1.6 billion were to shift onto hospitals, who would those costs be shifting away from?
Medical residents, doctors in their first few years out of medical school, make an average salary of $35,000 per year. Under the current ACGME limit, medical residents can work a maximum of 80 hour work. Studies show, however, that the limit is loosely adhered to. Regardless, assuming an 80 hour work week, medical resident wages average out to $8.65 per hour of service.
After four years of undergraduate education, four years of medical school, and $250,000 of debt from student loans, why are medical residents forced to endure further financial burden? Why do they earn such a meager amount that barely tops the average national minimum hourly wage? Despite the shorter duration of educational programs and smaller financial burden, health care workers in other fields (nursing, for example) can expect a much higher salary in their first years.
If the maximum shift length for residents was reduced to 16 hours, it would cost $1.6 billion dollar to have other health care workers fill in the gaps. That also implies that medical residents are already shouldering the weight of subsidizing the health care system to the amount of $1.6 billion dollars a year.
Upon reaching residency, medical students are essentially 'all-in' — completing residency is a prerequisite to becoming an independent physicians — so they have no leverage with which to bargain for wages. If other health care providers are paid more for providing a similar service, doesn't that mean that residents are essentially forced to work at a charitable level? And, assuming so, is it fair to expect medical residents — as opposed to the government, hospitals, insurers, employers, etc. — to shoulder costs of subsidizing the health care system?
May 26th, 2009 on 12:08 pm
I agree with you. I do not understand the justification for forcing medical residents to subsidize the health care system by paying them such a meager wage.
Although I have not studied the article, I question whether the 16-hour per shift limit actually costs money. I suspect it saves money as a result of fewer errors and increased efficiency. There have been many studies showing that people are prone to make more mistakes and are less efficient once they have worked more than 8 hours in a shift. Those studies support government policies for payment of overtime pay to employees. Did the article consider the costs that result from the long work hours?
May 27th, 2009 on 11:14 am
Here is a summary of the methods from the article abstract:
“Methods: We used published data to estimate labor costs associated with transferring excess work from residents to substitute providers, and we examined the effects of our assumptions in sensitivity analyses. Next, using a probability model to represent labor costs as well as mortality and costs associated with preventable adverse events, we determined the net costs to major teaching hospitals and cost-effectiveness across a range of hypothetical changes in the rate of preventable adverse events.”
So, yes, the study did assign monetary values to decreases in errors and increases efficiency. Even after taking these into account, the total cost of reform still came to $1.6 billion dollars.
May 29th, 2009 on 10:05 am
It appears to me that they cheated with their assumptions. They did not compare apples to apples.
They assumed that if one resident could not work more than 16 hours per shift (at an hourly rate of $8.65/hour), then the hospital not transfer the “excess work from residents” to more residents, but rather to the highly paid “substitute providers.” That is not a fair assumption.
A more sensible assumption is that a hospital, being sensitive to costs, will simply hire more residents. If each resident is only paid $8.65 per hour, then the hospital would likely transfer the excess work to more residents, instead of to the more highly paid “substitute providers.”
May 29th, 2009 on 10:56 am
However, residents are a limited resource. Residency review committees and ACGME limit the number of residents each hospital can have, so the economic shift is more complicated. So, once hospitals have maxed out their residents, the residual work will have to fall on, for example, nurses and PAs.
Regardless of how hospitals make up for the deficit, the fact remains that hospitals lose out when they can’t overwork their residents. Residents are paid well under the real market value of the services they provide.