“To Be on not to Be, that is the question,” a famous quote from Shakespeare poem Hamlet. My niece is interested in attending medical school and has solicited my professional opinion on whether it would be economical feasible for her to attend medical school and if so, the best location to practice medicine. There are many variables in determining the maximum benefit and/or advantages of medical school. Such variables could include but not limited to, gender, ethnicity, tuition, locations, schools, specialties, etc. This paper will touch on the advantages as well as some barriers which may countersuit some of the advantages to form a concise recommendation to my niece on whether becoming a physician is economically and socially a good profession in which she should pursue. Demand Determinants
The demand determinants for this case will feature definition of the market and the availability of close substitutes. These two determinants were chosen because the market for medical school can pose many qu4estions, however, narrowing down the most compatible choice is essential in obtaining the value of becoming a physician. The article “Is Being a Doctor Worth it Financial? Not as much as you may Think,” will help us break down the demand determinant of availability of close substitutes. This article goes to analyze the author’s question on whether if it is worth becoming a physician. To determine the author’s answer, she compared the salary of a doctor to one of an average college graduate. In real numbers, not to say that these numbers are of current market value, but for the sake of this paper, the author states that a graduate can earn an income of $40,000.00, minus after-tax deduction; this graduate will take home $30,000.00 a year. A resident after medical school and for the next three years can expect to make about $40,000.00 a year. However, after the three years, a doctor can expect to make $150,000.00 a year as a family practitioner, which after taxes (approximately 33%), a take home pay annually for a family practitioner doctor is $100,000.00.
To amortize the cost of medical school and the amount of one’s yearly income, it is predicted that to find the financial gain of a physician oppose to someone who received a four-year degree, a person will have to wait 13 years to see the financial advantage of going to medical school after all variables have been computed. In relative to years, a college graduate without medical school will graduate at the age of 22, however, one will not see financial relief until the age of 35 if continued on to a medical degree. To end this assumption of is becoming a doctor is financially feasible, the answer will be yes, however, the return will be much farther in one’s career. But do take into account that a doctor will have to work much harder and longer hours, approximately 60 plus hours a week oppose to someone who generally will work between 35-40 hours a week. The maintenance of a doctor is continuing medical education to stay abreast of the latest and most up-to-date technology, inventions, and advancements. If a physician choose a specialty (which in my opinion is highly recommended), one will have to recertify for board exams every 7 -10 years. Lastly, retirement age which is typically 65 years old will not be unit the age of around 75 for a physician. Job security, however, will be in a doctor’s favor because the shortage as of right not for doctors, especially for primary care physicians will keep a doctor employed. This aspect explains the demand determinant of the definition of the market.
The market in this text is saying the specialty of a primary care physician is in high demand. The author of the article calculated a $600,000 gain to be a doctor oppose to another profession which only needed a four-year degree. Moreover, the price elasticity for becoming a doctor as this article relates is that to determine the value of a physician’s income/net gain oppose to a four-year degree income is contingent upon one’s specialty. The demand for a physician will increase as the shortage for doctors decrease to help care for the needs of American’s growing population whom is also living longer. The locations, especially rural areas will demand the need for more physicians. The need for a primary care physician is greater than the need for a family practitioner. To perform the midpoint formula, the following fictional number will exhibit the value of becoming a physician. Midpoint elasticity = (B2-B1)/(B2+B1)/2 ÷ (A2-A1)/(A2+A1)/2: the number we will use the amount of patients needed for a physician. The average number from the beginning and the ending number of patients needing a physician in a rural area is 75 or (50+100)/2, so if the number of patients increases, the formula will read (100-50)/50 will give us 50/50, or 100%. However, if the patients decrease the formula will read (50-100)/100 which will be -50/100, or -50%. The midpoint value will be (100-50)/75 or 50/75 which will equal to a percent change of 66.67%.
Becoming a doctor while analyzing the supply demands of the profession can be determine by the price the input prices, technology and the expectations. The price can be determined by the cost of medical school. According to the article “Medical School at $278,000 Means Even Bernanke Son Has Debt,” published by Bloomberg, the average debt of a medical student who finances his or her education through private and government loans is between $207,868 and $278,455. However, the article also states that the supply of doctors will be less than the demand due to a shortage that is forecast to happen by 2025. This makes the supply inelastic because we will face more patients in need of a physician than we have physicians. The shortage is reportedly more than 130,000 physicians to the more than 32 million American that will be receiving healthcare (Bloomberg, 2014). This type of debt can price out minorities and women who have interests in pursuing the idea of attending medical school. Such and enormous debt can discourage someone to think elsewhere as far as becoming a doctor. African Americans typically leave medical school owing loans on the average of $184,125. However, the price of medical school or even a lucrative salary cannot be the sole determinant of why one chooses the profession of a doctor. A study, coming from the article “African American Female Physicians in South Caroline: Role Models and Career Satisfaction,” outlined results from 132 African American female physicians with 62 responding answering why they choose to practice medicine.
The majority of the respondent stated they went to medical school for altruistic reasons, in addition to having a high interest in the positive challenges and opportunities practicing medicine presence. Another reason the respondents gave in the survey stated that there were other external reasons that influenced their decisions and that was the impact their family, teachers and childhood upbringings. Moreover, the study also revealed that most African American women shared the same desires as white female physicians. Lastly the study stated that the dissatisfying component of the respondents dislikes of being a doctor was managed care, time demands and paper work. (McFarland, F., Smith, J., West, A., & Rhoades, R., 2000). In essence, one’s gender and/or ethnicity one will have to analyze the explicit cost of what it takes to obtain a medical degree. One must incorporate the tuition, room & board, books, practical exams, etc., whereas the implicit cost will be calculating the interest rates of government and private loans. However, becoming a physician even with student loan debt, one can apply the theory of profit maximization because the return over time will far exceed the debt that was incurred. This theory also allows a medical student to actualize that there will be a normal profit as well as an economic profit because one would have covered the implicit and explicit cost to obtain the accounting profit, but will reach far above monetary return to achieve the economic profit once the loans have been repaid. As stated earlier, over a period of time, a physician will make approximately $600,000 over the course of his or her career than a four-year graduate. The below graph is illustrating the supply of physicians to the number of patients that need care.
In conclusion, my advice to my niece would be to follow her heart and desire as obtaining a medical degree will far exceed the satisfaction of serving people than the income and time spent. However, to quantify the return on the education of a medical degree, will yield a positive return, but not immediately, over time. Through the law of demand she will see that becoming a doctor is in high demand because the American population is living longer and physicians are needed to care for the generations to come and the ones that are still here who need geriatric care. Another positive component in obtaining a medical degree is because she is a woman; she can be a pioneer of new cures and advancements as it related to terminal illnesses. The concerning questions is what are the best places to practice medicine? According to PR Newswire, “The Best Places to Practice Medicine are Idaho, Alabama, Texas, Nevada, and South Carolina. The metrics that were used in determining which place is best were: low density of practicing physicians per capita, medical malpractice insurance, low rate disciplinary actions, cost of living and tax burden. However, the article also stated that physicians must determine what is most important to them and their family in deciding where to practice medicine. To be or not to be is the question; yes becoming a physician is economically sound and wise because through the theory of supply and demand, physicians will be needed through eternity as long as there is human presence on this planet earth.
Lorin, J. (2013). Bloomberg. Medical School at $278,000 Means Even Bernanke Son Has Debt. Retrieved from http://www.bloomberg.com/news/2013-04-11/medical-school-at-278-000-means-even-bernanke-son-carries-debt.html Chen, M., & Chevalier, J. A. (2012). Are Women Over investing in Education? Evidence from the Medical Profession. Journal Of Human Capital, 6(2), 124-149. Miqueo, C. (1999). Women and doctors in medicine. Lancet, 354SIV65. Dacre, J., & Shepherd, S. (2010). Women and medicine. Clinical Medicine, 10(6), 544-547. Illinois State University. Department of Economics. Profit Maximinzation. Retrieved from http://www.economics.illinoisstate.edu McFarland, F., Smith, J., West, A., & Rhoades, R. (2000). African American female physicians in South Carolina: role models and career satisfaction. Southern Medical Journal, 93(10), 982-985. Medical School Success (N.D.) Is Being a Doctor Worth It Financially? Not as Much as You May Think http://www.medicalschoolsuccess.com/is-being-a-doctor-worth-it-financially/ PR, N. (2012, October 12). The Best Places to Practice Medicine are Idaho, Alabama, Texas, Nevada, and South Carolina. PR Newswire US. R. Glenn Hubbard, Anthony Patrick O’Brien, Hubbard, O’Brien. Economics. 4th Edition. Pearson Learning Solutions, 2012. Pg. 20. VitalBook file. Bookshelf. Reyes,
J. (2008). Gender Preference and Equilibrium in the Imperfectly Competitive Market for Physician Services. Eastern Economic Journal, 34(3), 325-346. doi:10.1057/palgrave.eej.9050033
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