Jarrod Shapiro, DPM
Practice Perfect Editor
Assistant Professor,
Dept. of Podiatric Medicine,
Surgery & Biomechanics
College of Podiatric Medicine
Western University of
Health Sciences,
St. Pomona, CA

President Obama,
Eliminate My Debt!

All of the recent fiscal cliff negotiations had me thinking about my own debt, i.e. the giant amount of financial aid that I accrued during podiatric medical school.

Before getting started, I want to state that I am not advocating a complete elimination of physician financial debt (despite my somewhat hyperbolic title). Since I am the one who accepted this debt in order to go to school, it is my responsibility to pay it off.

However, the amount of debt physicians accrue today is ridiculously high. And it isn’t getting easier to pay it off. Medical school is becoming ever more expensive, and our tax laws aren’t helping. Take, for example, the fact that a few years ago, the government stopped allowing interns and residents to defer their financial aid repayment. We can all remember the relatively small amount of pay we received when we were residents, and even in today’s higher-paying programs, the paycheck doesn’t go far (think about $4 to $5 gas, for instance). Add on to that the monthly payment on a multi-hundred thousand dollar debt and it becomes more challenging yet. Our trainees must now either begin paying their loans or request a forbearance (in which the interest on the principle continues to build).

The other tax issue is the highly limited and oh so aptly named "American Opportunity Credit." This is the one in which we get a tax credit up to $2500 per year on the interest for student loan repayment. The problem, though, is that once you make a certain income, this credit reduces significantly to something far less than $2500. A little less helpful.

Here’s my situation. My current total financial aid repayment amount is slightly over $220,000. I also have a small private loan that I took out at graduation from school (about $10,000). It’s basically like paying a second mortgage. My monthly payment is $1,100 per month. When I was in residency, I was able to defer my loan repayment, which allowed me to start paying later than current residents. I also chose the graduated repayment plan in which I was paying "interest only" for the first five years. As such, I started making my payments in earnest (principle + interest) over the last 2 ½ years. My payment will thus not change for the next 20 years.

Tonight's Premier Lecture is
Therapeutic Uses of Skin Allograft
and Pneumatic Medicine
Adam Landsman, DPM

So, picture me sitting at the table doing my bills with the TV on, listening to the lasted politics about how the "world will end" (about as hyperbolic as my title) without an agreement on the federal budget, and I hear an argument about how the pending across-the-board tax increases might slow the economy and put us back into a recession.

Then I thought, with the amount of money I lay out monthly with a house, wife, two young children, and a host of other expenses, someone in my position would be an excellent economic stimulus if given more money to spend! If those of us who have that sizeable monthly payment were to instead have more disposable income, then we would have that much more to add to the economy.

I’ll admit I see a couple of holes in my theory. First, as someone in a higher economic bracket, I’m less likely to spend all of the extra money. Some portion of it is likely to go to savings. This would be in contrast to someone who is poor and receiving government money. If you don’t have any money, then most of that money would be immediately spent on living expenses. Second, it hasn’t been very popular lately to target government assistance to those in higher tax brackets. I can’t imagine the government building a consensus to help doctors.

To that end, I recommend some kind of quid pro quo financial forgiveness package for those in the healthcare industry. Perhaps something like the Indian Health Service in which a certain amount of money per year is paid for time spent working for the government. But instead of your entire job spent as an employee of the government (not all of us would want that) we might see a more general method in which X dollars of loan forgiveness is given for Z amount of free care to the uninsured or indigent population. For example, I do a reasonable amount of trauma care on uninsured patients and receive no monetary compensation for these very high risk patients. From a monetary standpoint, it makes almost no sense for me to see these patients – no return on my investment and an increased risk of medicolegal complications.

Let’s look at some specifics. Normally, I am paid approximately $540.00 by Medicare California for an ORIF of metatarsal fracture (CPT code 28485) (as determined by CMS Physician Fee Schedule Search). In my scenario, I would be "forgiven" (i.e. the government would pay my loan holder) some percentage of that – I vote for 100%.

I advocate for some doctor assistance. This method would, I think, be highly successful not only in reducing our financial burden, but also a portion of the burden on the overall healthcare system. Imagine how many more physicians would be willing to see uninsured patients if they knew they would benefit in some way besides the good feeling of doing a humanitarian deed ?

The cost of being a physician is ever increasing, and I advocate for some doctor assistance. What do you think? Am I correct? Should doctors have a financial aid reduction package? Should Obama send a proposal for a bill to reduce our financial aid debt, or should we just be quiet and pay the loans we started?