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Does money talk?

Teaching institutions fear rising stipends may influence residents' choice of program

From the March 1995 ACP Observer, copyright © 1995 by the American College of Physicians.

By Christine Wiebe

Amid talk of medical reforms that would target physicians' wallets, incoming residents this year are taking home slightly larger paychecks, according to a national survey. That may sound like good news overall, but some institutions worry about a downside: fiercer competition to fill their residency slots and greater emphasis on pay in residents' choices in the coming years.

According to the annual Survey of Housestaff Stipends, Benefits and Funding produced by the Association of American Medical Colleges (AAMC), residents who began their training in the fall of 1994 are earning an average of $30,753, up 4.1% or $1,205 from last year's average. That represents a slightly higher proportional increase than in the previous year. After adjusting for cost of living increases, this year's average salary gives residents a slightly higher buying power than they have had in the last 16 years.

However, average figures mask the pay differentials found from one end of a city to another, and from one region to another.

Norton Greenberger, MACP, says some first-year residents in Kansas City are earning $5,000 more than others, and programs offering more pay have an easier time filling their slots. That troubles him, he says, because it shows money influences medical students' choices of training programs. "You can't negate $5,000 a year," Dr. Greenberger acknowledges, particularly when residents are facing at least three years of residency and high education debts. Unfortunately, many state institutions, such as the University of Kansas Medical Center, where Dr. Greenberger serves as department chairman, are constrained by state budgets.

California is a prime example where economic woes have affected the medical training system. When Jeff Kohlwes, MD, entered the medical training system five years ago at the University of California at San Francisco (UCSF), his stipend was considered fairly high, he says. Incoming residents today are earning about the same amount, however, and step raises from one year of training to the next have gotten increasingly smaller as well, he says. "It's so expensive to live here, and I think that's going to become a problem," he predicts.

In fact, the AAMC survey reveals that for the first time, residents in the West are earning slightly less on average than residents in the South, where pay levels usually are the lowest. The average first-year stipend in the West is $28,610 this year, compared with $28,715 in the South, $30,290 in the Midwest, and $33,102 in the Northeast. (Benefits, however, still give the West an overall edge.)

No one has determined just how important pay levels are in residents' training choices. Thus far, it has not been raised as an issue by students interviewing at UCSF, says Dr. Kohlwes. In fact, he doubts that a lower stipend would deter someone from choosing a prestigious institution, unless they could earn more at an equally outstanding program, he says.

California and other regions may be somewhat insulated from regional pay differences, suggests Frederic Wyle, MD, associate program director at the University of California at Irvine. In the University of California system, he says, the vast majority of applications come from people with ties to California. Furthermore, "In the last few years there has been so much homogeneity from program to program (within California) that pay is much less a factor than it was 10 to 15 years ago. There are other things that are weighed that are just as important to today's residents as salary," he says.

Educational leaders certainly hope that is the case. In fact, residents' paychecks technically are referred to as "stipends" rather than salary, because they are meant simply to cover the costs of living while in training, says Ingrid Philibert, AAMC staff associate who prepared the 1994 survey.

In addition to stipends, benefits are a significant factor in residents' total financial packages. This year, like last, hospitals in the West led the pack in offering group medical coverage to housestaff; hospitals in the South ranked last.

Overall, the AAMC survey found that the vast majority of hospitals provide health insurance for housestaff; 59% pay the full premium and 40% share the premium cost with residents. In addition, 42% of teaching hospitals fully pay the premiums for residents' families; another 53% offer cost-shared coverage. Only 1% of hospitals do not offer insurance for residents or their families. At most hospitals (85%), group medical insurance includes coverage for HIV. About 84% require a co-payment for health services. About half of the hospitals offer a "cafeteria-style" benefits plan, allowing residents to choose the coverage that suits them best.

Other benefits typically offered to housestaff, as reported in the 1994 survey, include:

  • Life insurance. Fully paid premiums are provided at 82% of teaching hospitals, and another 11% pay part of the premiums. The average amount of coverage this year is $47,549; coverage amounts range from $1,000 to $600,000.
  • Disability Insurance. About 77% of teaching hospitals provide fully paid premiums, and 5% offer cost-shared plans. About 71% of those plans cover HIV infection. About 13% of hospitals still do not offer disability insurance.
  • Parking. Most (61%) hospitals pay for parking; 15% pay part of the cost.
  • Meals. Only 23% of hospitals pay for residents' meals while they are on duty, but 28% defray part of the cost of meals. However, 84% pay the full cost when residents are on call.
  • Vacation. For first-year residents, the most common amount of vacation and other paid leave, excluding sick leave, is 15 to 20 days, offered by 35% of institutions. Eighteen percent of hospitals offer 11 to 14 days off; 22% offer 21 to 27 days; and 18% offer 28 or more days off.
  • Child care. About 41% of hospitals report that they provide on-site child care for housestaff dependents. That service is available for nine to 12 hours daily at 66% of those institutions, and for 13 to 18 hours daily at another 22%. Only 5% offer overnight care, and about 15% offer weekend care. Sixty-seven percent of the hospitals with on-site care say they have a waiting list. More than half the hospitals that do not provide child care or do not have space in their center do help housestaff find other care, and a number help subsidize the cost.

Christine Wiebe, of Providence, Utah, writes frequently on issues related to medical residency.

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