Despite Mounting Debt, Surgical Residents Lack Financial Education

Bruce Harms, MD, MBA

While the cost of higher education in the United States increases overall, the debt faced by medical school graduates has dramatically climbed in the last 20 years—yet medical students’ knowledge of debt management is extremely limited.

New survey findings, produced by a group consisting of Bruce Harms, MD, MBA, FACS, a professor in the department of surgery at the University of Wisconsin School of Medicine and Public Health in Madison, and Sarah Tevis, MD, from the department of surgery at Anderson Cancer Center, in Houston, Texas, and colleagues, have shown that 79% of surgical trainees felt strongly that financial training should be included in residency education.

In total, only 6% of respondents said they received any type of personal financial education during residency. A separate study, conducted by Glaspy JN et. al. yielded similar findings in a survey of 1,700 emergency medicine residents—82% stated they had not received any debt management education in residency, and 84% conveyed that they’d like debt management and financial planning education to be available.

“We knew that in most training programs, they concentrate on training to be a surgeon, but we don’t spend time and energy or expertise on the skill set for managing debt—educational or noneducational debt,” Harms told MD Magazine. “They’re not trained how to get rid of it. I’ve seen this enough over time to know once they leave the program, they will buy a place that’s expensive when they’ve already bought their house in the form of educational debt. They don’t have the tools to manage it. You wind up with these very educated, medically smart individuals and trainees that are financially below where they should be. And they’re reluctant to talk about it.”

In total, the group of researchers polled 105 surgical trainees at a single academic center, with questions focused on problems related to debt, equity, cash flow, financial education, and fiscal limitations. Of those that responded, 38% reported having more than $200,000 in educational debt (mean, $221,100), 90% reporting some type of debt, and 75% reporting educational debt.

Evaluations were conducted of the predictors of moderate risk debt-to-asset ratio (0.5 to 0.9), high risk debt-to-asset ratio (≥0.9), and high risk debt-to-income ratio (>0.4) using IBM’s SPSS Statistics v.21. In total, 82% of those surveyed had a moderate or high risk debt-to-asset ratio, with 70% of residents having high risk debt-to-asset ratios, and 83% with high risk debt-to-income ratios.

“We’re just trying to look at what the problem is,” Harms said. “They need basic education on financial risk assessment and management of debt. Many of these individuals are going to be working for hospitals and their wages might not be escalating over time. They have to have a toolset to manage their personal finance while at the same time they’re being asked to managed health care finance.”

Harms said that there have been instances where educational programs have been attempted, but many have been hit or miss in terms of success. In his eyes, the best bet for residents to learn the proper fiscal skills would be through web-based programs tailored to the trainee. Additionally, an education in business would be helpful, “but it’s like a different language,” according to Harms.

“You have to have individual buy-in and complete ownership for your financial health. Just as much as your professional skill set,” he said. “You have to read something along the way—then it becomes a habit. They have to know the traps, the do’s and don’ts. That’s one thing an educational program could put together. You have to start early. It might be painful, it might be scary, but don’t be afraid. You need it to become able. The tools are out there, but they’re not consolidated or set up for a resident trainee.”

The residents that had high debt-to-asset ratios were found to be more likely to have a high level of concern about debt—52% vs 0% (P <.001)—when compared with their counterparts with low debt-to-asset ratios. “The majority of them are concerned. They don’t necessarily know what to do about it, but they’re concerned,” Harms said.

Harms added that it makes it more difficult for the residents since they have no way to find out the risk group they fall into based on their socioeconomic standing and environmental factors, which could, in theory, at least allow them to find out where they stand in comparison to their peers.

“We’re not necessarily training them or giving them the tools to be fiscally responsible,” he said. “Otherwise, there’s going to be more stress and it may affect their career pathway.”

Harms’ thought that implications of debt can persist outside of simple stress has been noted by others, as well. In a presentation given at the American Psychiatric Association’s annual meeting in May, Darrell G. Kirch, MD, the president of the Association of American Medical Colleges, spoke about the factors that can lead to burnout, with educational debts being a chief among them.

While Harms and colleagues' survey was conducted with only surgical trainees, he noted that the problem likely exists across all specialties. "If you’re in, say, primary care, it might even be slower to pay that debt off. The pay differential might be significant based on specialization," he said.

The study, “Clinically Competent And Fiscally At Risk: Impact Of Debt And Financial Parameters On the Surgical Resident,” was published in the Journal of the American College of Surgeons.