However, understand this: Say residents start making DOUBLE their current salary. Not only will most programs immediately close their residencies, but the remainder will demand that their residents work twice as hard because they can't afford to hire more residents.
I stand by my earlier post that about all we can predict from an increase in the salary of residents is that the absolute total hours of resident hours consumed by programs would decrease. How that plays out with the total number of resident spots is not clear. Some programs may find it cost-effective to close their residencies, but I doubt that. Medicare pays billions of dollars to teaching hospital for graduate medical education (doctors, nurses, related allied health fields, etc). A few years ago, this was over $6.2 billion dollars. I feel fairly confident in stating that Medicare pays over $3 billion to subsidize resident education each year. I have been told that by administratrive folks in med school and during residency that hospitals get over $100k per resident from the federal government. I wouldn't stake my life on this last number, but I think it is in the ballpark.
Hospitals and programs are free to spend this money how they want. They have a great deal of freedom of how they can spend this money. They use part of it to pay our salaries. Some of it goes to our department's general funds (which is also what happens with a portion of our tuiton money when we were medical students). Before I see a single patient, the hospital has already made money on me. It is in the hospital's financial interest to keep a residency program open if roughly the revenue (i.e. money from Medicare for medical education plus billings by attendings for patients seen by residents) is greater than the cost (resident salary, benefits, etc) of having the residency program.
I am a cynic, and I personally believe that residents are a huge source of profit for hospitals. I do believe that teaching hospitals lose money, but I don't believe those losses are coming from training residents. Training hospital have a higher portion of unisnured patients and Medicare patients. Teaching hospitals collect significantly less on each dollar billed than their counterparts in private practice. I personally believe that teaching hospitals are filled with bureaucracy and bloat. There are attendings who bring in far less for the hospital than what they are paid because of a variety of reasons (spending time doing research not covered by other funds, inefficient, etc.). There are senior surgeons on the payroll in our department that I never see.
Some indirect evidence is what programs have done in response to the 80 hour work week. Now because of ACGME guidelines (80 hours/wk), these same departments who claim they were losing money training residents are able to plunk down $50-100k for PA's to allow them to see the same number patients that they used to see prior to 80 hr/wk rule. How can they do this and not go broke? If we assume only costs to departments have gone up and not their revenue, then it was because programs were making a profit from resident labor. If we are conservative, and assume that programs are breaking even now (I still think they are making money from residents/PA's), then all the cost for PA's is roughly equivalent to profits once generated by residents. Since we work double the hours of PA's, one resident is equivalent to at least 2 PA's in terms of labor. I think residents are more efficient and competent than PA's and that one resident is worth more like 2.5 to 3 PA's. This translates in profit generated by each resident of appoximately 100-200K.
Think LONG TERM, not SHORT TERM - as doctors, we're all capable of being more analytical and less reactionary.
I am not trying to to turn this into an ECON discussion board, although I guess this is what it sounds like. I am just saying that this is a complicated situation without an easy solution. Programs act in their own self-interest, and they will pay no more to residents than they have to and they will close residencies or eliminate positions when they lose money on residents. If forced (by lawsuit, congressional law, collective bargaining, etc.) to pay higher salaries, they will up until the point that residents salaries reduce the net profit per resident to zero. By my off the cuff calculations (based on data from a surgery department), salaries could rise to as much as $100-200k per resident before it makes sense to shut down the residency.
I am not saying that they should pay us this much, but I don't buy the argument that programs will close if our salaries rose to $80k. Even at that salary, we are a source of profit.
I will say this: if we have a non-mandatory Match, my opinion (and I have no proof) is that things will get worse.
I agree. As much as programs love a superstar, I personally think what matters more to them is avoiding truly bad residents. If programs want to get superstars under the lawsuits match process, then they might have to pony up and increase their pay. If they just wish to avoid the truly bad residents, then they just have to pay enough to get the average (solid) resident to come to their program, which is probably what they are paying now. I am not saying that programs don't want superstars, but when they have to pay a lot more to get one, then they just might be happy with the average Joe. Secondly, I also feel that many people on residency selection committees hate the job. It is a lot of time and effort to do it well. I honestly believe many programs would be ok with going out of match and filling their slots with the first solid residents they interview if they could get away with drastically reducing the time put in the residency selection process, even if this was at the expense of getting superstars.
I just don't see the incentive for programs to improve working conditions or compensation from the lawsuit. Maybe I am just dense, but I just don't see it. I think we end where we are now in terms of pay, and fourth-year students end up with a residency selection process that leaves them worse off.
