Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, skills, insight and encouragement you need to live a rich and meaningful life now while building a plan for financial freedom in 10 years or less. My guest today is Peter Steinberg and Peter, you wrote me an email is how we got to this interview and you said, "Joshua, I've been a long-time listener and we've talked on some Q&A shows.

You don't think that being a doctor as a primary means of building wealth is a good idea?" I beg to differ and so I'm going to come on and argue my case and I thought it sounded like fun and so we've got you here to argue that going into the practice of medicine is going to be a fantastic move from a financial perspective.

Is that accurate so far? That's totally accurate. Now, I am hard on physicians and I probably shouldn't be. I guess it's just having worked with so many face-to-face that had nothing but complaints to say about how little money they were making now compared to how they used to be and how difficult their life was.

Perhaps I've gained a jaded view of the profession, but I invite you to introduce yourself, tell us a little bit about your professional background and begin to make the case to us about why people should consider medicine, especially from a financial perspective. Sure. So my name is Peter Steinberg.

I'm a practicing urologist in the Boston area and I've been in practice for about five to six years now. So I'm not just a doughy-eyed new pop out there, but I'm also not one of the cynical 60-65-year-old physicians that you talk to who do have a legitimate gripe about the finances of medicine these days.

My main argument for going into medicine, it's obviously not for everybody because it does require a substantial amount of dedication and education and it's a pretty long slog to go into practice. Four years of college, four years of med school, and then the shortest residency you can do is three years and some are even longer than that.

It's not for everyone, but for people who are inclined to do it, they should not listen to the older generation and be dissuaded from going into practice because doctors make more than just about everyone except for rock stars and professional athletes. Even the most average physician will have a very above-average income.

From that standpoint, I think it's tough to beat. You can do better with other forms of work in terms of your income, but in terms of the job market and the demand and the median and average salaries and the geographic availability, there's really nothing that beats the practice of medicine.

Okay. So that's a good start. And that is where – and by the way, for the purpose of our interview here, I'm going to play the strong devil's advocate. So if I don't concede your points, just recognize I'm primarily playing devil's advocate here. So I think it will be a more interesting conversation if we approach it that way.

You make good points and everybody knows that the doctor in their town is usually going to be driving a nicer car and living in a nicer house than other people. However, most doctors that I have known work a tremendous amount. They work a tremendous amount either based upon the number of hours actually worked or based upon the stress involved in those hours or simply based upon their needing to work based upon the schedule of their patients.

When you have a sick patient, you can't necessarily choose to say, "I don't want to work right now." Sure. So you bring up some good points. And one of the things that sort of struck me as I've gotten into practice and is not something you learn about in medical school or even residency is that practices come in a variety of flavors.

And you can work in medicine as much or as little as you want. And by the way, you don't need to just see patients. I mean there's a variety of different avenues you can pursue, many of which are not direct patient care to give you some more control over your lifestyle if that's what you're most interested in.

But certainly, there is a certain amount of work you have to do and there's a certain amount of inconvenience that comes with practice. However, if you compare it to other like jobs, to other professions, there's some distinct benefits that medicine has that a lot of other fields don't have.

But don't get me wrong. I mean doctors do work a lot and they work pretty hard. And I just took a quick peek yesterday at a survey of about 20,000 physicians that a website called Medscape did. And on their survey of a variety of specialists, they had half of the doctors work 30 to 45 hours a week just directly doing patient care.

And a third of them do more than 10 hours of paperwork a week. So, you know, that's a lot of work. But then again, you know, for a job where your median income is going to be a couple of hundred grand, you know, you can't get something for nothing.

One thing I will say is that the practices people are going into more and more, so I'm in my late 30s, the practices people are going into now are very different from what people used to do 20 or 30 years ago. Most people going into practice are either employed directly by a hospital or are in a large physician group where you're an employee and you have a lot more flexibility in terms of your scheduling and more control over your schedule to the extent that is possible than people used to when they were in solo practice or two person groups.

And, you know, you're literally covering call all the time or half the time. You know, for instance, I'm in a six person urology group, but we share a call with 14 people. So I'm on call one weekend a quarter and, you know, we're in Boston, there are hospitals everywhere.

We don't do a whole ton of work when we're on call. It's not like we're getting getting destroyed all the time. So that's more the practice environment people are in. And again, it doesn't mean that you don't have things that happen or that your schedule doesn't get disrupted periodically.

That certainly can happen. But there's more control than there used to be and more structure than there used to be. The other thing is compared to some other fields. I have a brother who's a corporate lawyer who does a lot of merger and acquisition type deals where there's a deadline.

He can't swap out for someone else if they're working on a deal. You know, he's the partner and he's got a team. He can't tag in another partner the way we do when we say take call. You know, when I go away on vacation, someone's covering me and, you know, they can't find me.

And there's someone covering for you. And that's the general setup a lot of people have, whereas with other professions, you usually can't walk away from what you're doing entirely. And I've always used to think, you know, I used to think call was a burden. But as I got older, I said, you know, this is amazing.

I can just sort of walk away and it will all be fine or it will be taken care of at least in my absence. So I think that those are some advantages. But you're right. I mean, we do work a lot. But you generally get rewarded for that. What are some of the other benefits that you see of medicine, not just the as a profession, not just simply the high paycheck when it comes in?

Well, sure. And I can tell you that, you know, that's not the reason why I went into medicine. And I don't think it's the reason why most people do. You know, if you want to really earn a lot of income, it's not the way to do that directly. You know, the primary reason why I went into health care was I had a lot of interest in science.

I thought I had a fairly altruistic streak. And I wanted to sort of combine the two. And the other careers I was looking at were things like research science. And it just -- that didn't really appeal to me and I didn't really seem to have a lot of facility for it as I went through college.

I was a biochemistry major in college. And I also had an uncle who was a physician who I kind of looked up to when I was younger. So I really thought the ability to have some type of positive influence on people, deal with problems, you know, be an expert where they're coming to you looking for help, looking for advice.

You know, I'm a surgeon. And so, you know, dealing with problems that can be dealt with surgically and rapidly is very rewarding. And the other thing is, you know, medicine is one of those fields where if you're intellectually curious in whatever avenue you're looking at, whether it's the actual science of what's going on, whether it's related to health policy, whether it's malpractice, whether it's related to technological changes in companies with new products and drugs, you know, whether you have a global perspective or you want to deal with the poor, whatever you want to do, there's something for everyone in the delivery of health care that will keep your brain engaged for your entire career, really.

And so I always liked learning new things. I had a real strong academic streak. And that's one of the things that I really enjoy in addition to helping people and restoring their health is I'm always stimulated by, you know, new things that are happening, whether it's just the practice of urology or whether it's new gadgets, gizmos, devices, new companies, legal things, the Affordable Care Act, you name it.

There's always something going on that impacts health care. And it definitely keeps my brain engaged and keeps me from being bored. I think that's a huge benefit of medicine and of many careers. If you can enter into a career that enables you to work over a lifetime and into a career that is not going to be limited in scope based upon you can exhaust everything there is to know about it in a decade, that opens up to you the opportunity to build mastery and then to make a major advance in an area of knowledge.

And medicine is definitely one of those things where there should be very few practical limits on how long somebody can practice. And as you said, with the ability to transition your career in directions that interest you, especially if you've built financial security and a good foundation to stand on where you don't just have to go where you're the most highly compensated, you can pursue your interests.

Unlike perhaps some physical manual laboring jobs which beat your body up and make it very difficult for you to continue into your old age, medicine can continue and you can be much more valuable at an old age. My two favorite stories at the moment, one was a lady named Dr.

Denmark who was a pediatrician and she practiced medicine until she was about 103, something like that, actively practicing. And then she retired for the last – I think it was 11 years of her life and died at about 111. She was in Georgia. My wife actually was one of her patients when she was – she was in her 80s or 90s.

My wife was actually one of her patients at that time. But she took this lifetime of knowledge and just had this keen discernment into patient situations because she had such a long career. And then just a week or a couple of weeks ago, I saw a profile online of a short little video of some – it's like a heart researcher, a doctor who specialized in heart research.

If my memory is correct, he was also over 100 and he was also still actively doing research in the lab. He would come in and he was working a lighter schedule but he was still pushing his research forward. And I love to see that. I love to see people deeply engaged in their career into their old age.

I think it's tremendous. Yep, absolutely. I mean I'll just give you an example of the group that I'm in. The gentleman who's the chairman of our department is in his early 70s. And when he was younger, did a lot of urologic cancers, prostate and kidney cancer, did a lot of major surgery and a lot of research.

But he's brought in younger guys like myself and some other folks to do a lot more of the heavy lifting so to speak and doing a lot more of the intense clinical care. And he stepped back to do a little more quarterbacking of our group, find opportunities for leadership and development, find fundraising opportunities for people, grant opportunities, research ideas.

And this guy, I mean he's got an endowed chair here at Harvard. I mean he's not going to retire anytime soon. Why would he? And that's one of the things you can do. As you go along, maybe you can't be in the operating room as much. Maybe you can't see as many patients.

But you can use your expertise to funnel off patients that might be more challenging for younger people. You can pick up a little bit of work in a busy group to decant things off the more stressed out providers. You can have that sort of grandfatherly quarterback role, kind of like a managing partner in a law firm almost to help keep things flowing.

There's a lot you can do. You can go into industry. You can become an analyst at a hedge fund. You could go do just research for a drug company. You can move into hospital administration. You can become a health care consultant. You could go work for the government. You could work for an insurance company.

You could go work for medical malpractice groups. I mean you name it, the sky is literally the limit when it comes to the practice of medicine. It's 20 percent of the economy. So it touches everything really. You name it, the sky really is the limit. It's one of those things as long as you can still have good cognitive function, there's not a lot of ceiling as to what you can do as you get older.

One of the benefits of medicine I'd love for you to comment on from an insider's perspective that I see is the occupation is in high demand. There is a lot of need for physicians, especially in the United States with an aging population. I've got to imagine your urology practice is – you must have good projections for the growth of the practice as time goes forward.

So I mean how is the job prospect for physicians these days? The job prospects are tremendous and that's really – if you're going to talk about the economy, the economics of health care, I mean that really is one of its great advantages. And I think the most direct comparison you can make is to law.

If you look at the legal profession, there are a variety of things that contributed to some of the issues with employment of lawyers after the market crashed in 2008. And I don't want to delve into what all those things are. But long story short, you found a lot of highly qualified pedigreed lawyers underemployed or unemployed in 2008, '09, and '10.

There is no analogous situation to the national workforce of doctors that I'm aware of. Now, there may be in very select areas where there's a massive supply of physicians and there's an overabundance in certain places, Washington, D.C., where I am in Boston, some parts of the Bay Area. It may be hard to find the job you want.

But if you look at the nation as a whole, that's a non-issue. And, you know, I can talk broadly about all of medicine or I can talk about urology in specific, but there is a colossal shortage regardless of what field you're in. The Association of American Medical Colleges, I pulled this off their website yesterday, they've got their estimates as to the deficit of physicians nationwide.

And they came up with a range. Their 25th to 75th percentile range of deficit for 2025. So that's people starting med school now who would be going into practice, say, in 2025. The projected mid-range of the deficit is between 60,000 and 95,000 providers. So that is a lot of people.

And just to put it in perspective, 50,000 people applied to medical school last year. So not all those people got in. So you're talking about the conservative estimate of the deficit of physicians in our workforce is probably twice as many as people are going to medical school next year.

So -- and that doesn't account for people retiring. So my personal opinion, I have no data on this, is that a huge number of physicians in their 60s and 70s have hung on after 2008 and kept practicing more intensely than I think they normally would have as a result of probably their retirement accounts falling apart a little bit.

So long story short, there is a massive deficit. And the supply, as you mentioned, is only going to increase. The population is going to age and demand will keep going up. I mean it's one of these things where effectively, if you ask me, I think demand for medical services is almost infinite.

I agree because it's one of those interesting things that there's very few – there are very few things that people want more desperately when they need it other than good medical care. And you tell someone who's facing a life-threatening illness that there's a potential treatment and people will move heaven and earth to make – to get there.

And so it's one of those areas where medicine, especially the advancement of medical technology, creates its own demand because it's relying on the number one desire that most people have, which is to maintain their life – maintain their vertical status and maintain their health to the highest degree possible.

Well, let me throw another one out there. A quarter of practicing doctors right now are over the age of 60. Wow. It's like the farmer's statistic. The age of farming as a profession is similarly – it's horrendous when you actually look at the number of farmers that are over 60.

What a statistic. I'm going to go back. Before we go into that, and then we can come back and start to collect to it, but do you have any sense either by reading and thinking about it, do you have any sense of why this shortage exists now and is getting larger?

Oh, sure. Yeah, this is actually – this is pretty easy to look to. So when you go to medical school, when you graduate, your degree is useful for a few things, but frankly, you really need to go do a residency in some specialty afterwards in order to really be useful to practice clinically or to really have the chops to have some credentials behind your name.

So residency programs, which are internal medicine, pediatrics, urology, neurosurgery, orthopedics, whatever, the various specialties you see out there, residency training programs are administered at teaching hospitals across the country, big hospitals that often are affiliated with medical schools. But the salary to pay almost all trainees, almost all residents – so you actually get paid when you're a resident.

Med school, you pay tuition for. But residency, you get a stipend, which starts around 50 grand a year or so nowadays. You are actually paid out of the Medicare Act. So tax revenues that go into the Medicare pool, a certain amount are siphoned off to graduate medical education, and that's where – some hospitals have huge endowments and can pay for residents in other ways.

But almost all hospitals, almost all their slots are funded this way. So when the budget was balanced federally in 1998, a cap was put into the budget for graduate education funding. And you can look back and you can find graphs about the budgeted amount of money and the number of slots in the country.

What's happened is there's been an artificial cap on the amount of money that can be spent on this, and the demand for services has sort of exceeded what is budgeted. And you can point primarily to that as the major issue in the current market. And the deficit is such that you probably can't make it up in our lifetime in terms of the supply if that's how this is going to be funded.

There have been some high-level discussions about other ways of funding graduate education. But long story short, 20 years ago when they put that cap in, that basically started this deficit of residency training slots in the United States. So to clarify, so your theory is – or what you're saying is because it's difficult for residency programs to pay for resident physicians, they're not hiring as many as they need to.

And then your idea is that's both flowing backward to medical school and forward to the professions and serving as an artificial constraint? Sort of. The market is a little bit funny when it comes to resident physicians. So the gateway into practicing in the United States for almost everybody, whether you graduate from a U.S.

medical school or a foreign medical school or a foreign-trained physician, is going through a U.S. residency program. So you can be in many cases either a foreign-trained physician, you could be a fully-trained internist from Germany. In order to practice in the United States, most of those people will need to go through a U.S.

residency program. So same with U.S. graduates, obviously. So the system that exists for matching medical students to residency slots, the way it works is each hospital will have a certain number of – let's say you, Joshua Sheets, you're at Academic Medical Center X, and you're going to start an internal medicine training program.

So you're going to come up with your program, you're going to have your faculty and your curriculum, and you are going to get accredited by a certain body to run the program, and you're going to have a certain number of spots per year that you can offer. So when you start out, let's say you have five slots that year, you are going to pay for those trainees out of money that comes from the Medicare Act, for the most part, unless you've got some independent fund of money at your hospital.

You have an endowment that you could pay for it otherwise. So what ends up happening is, let's say the country has 100,000 of internists and they need 200,000. In order to open the programs to train those people, hospitals need to get funding to pay those salaries, and most hospitals are dependent on the Medicare Act to fund those spots.

And they can't just create them out of thin air on their own, let alone get approved to have them. You can't just create new spots and then not appropriately train people. There's oversight of that by certain professional organizations. So much of, not all, but much of the deficit of certain specialties in this country comes from the fact that there's an artificial cap of funding to create new residency slots.

Now, in certain specialties, the reasons why there are surpluses or deficits exist for other reasons, either because people don't want to go into the specialty or different reasons. But there certainly are slots that go unfilled every year at different programs and different specialties. But you take a competitive field, say dermatology, there are no unfilled dermatology slots going back for the last however many decades.

But there may be unfilled family practitioner spots at certain places. But that's a big chunk of the issue. Even if you increase medical school enrollments, which has happened recently, some new medical schools have opened, some have expanded their class size. Still, one of the bottlenecks is in the residency training programs in this country.

And a big chunk of that is related to this federal funding where part of the shortage has been created. Mad Fientist: Interesting. I've never really dug into that. Josh Lerner: It's sort of esoteric. It's not directly the practice of medicine. It's a residency trainee thing. So you wouldn't necessarily run into it if you're talking about medicine writ large.

But delve into it. There are a lot of graphs that will show you the divergence of funding and this sort of need starting in 1998. Mad Fientist: While you were speaking, I found a 250-page report on it. "Evaluation of the New York State of 1997 Balanced Budget Act, Graduate Medical Education Demonstration and Payment Reforms." So there's all kinds of things written on it.

I guess one quick question on it. We won't get too bogged down into it. Why – it just doesn't make sense to me that that couldn't be overcome because it would seem that, okay, if that's where the bottleneck is, then there should be a glut of medical school graduates having trouble finding residencies.

Or that it could be overcome with – paying somebody $50,000 to be a training physician should not be that difficult in the grand scheme of running a hospital. Now, of course, you have associated costs, training costs. I'm sure there are many other costs to it. But it doesn't seem that expensive to me as a non-insider layperson.

It's more expensive than it looks. I mean forget benefits and things like that. Part of the reason why this compensation scheme came up was because there is some degree of inefficiency of care when you're dealing with trainees due to they're not experienced. They may overuse certain tests, etc., etc.

Part of the logic behind this or the spirit behind this is to additionally compensate academic centers for their lost productivity or their extra cost per patient, say, in order to train people. So it's not just the direct salary cost and benefit cost. It's probably – I'm sure someone has got a number somewhere for what it costs per year.

But when you're talking about adding 100,000 people at 100,000 a pop, all of a sudden the numbers get pretty big. It's fascinating. I tell you, medicine has all these little wrinkles. Years ago, I was doing this credential called a registered health underwriter. One of the classes that I took was basically this class on healthcare policy.

It was one of these books. I forget the name of the book. It's somewhere on my bookshelf. I can find it. It's one of these books written by one of the guys, Harvard professor of some kind who had been a 40-year commentator on the healthcare industry. It was one of the major architects of healthcare policy, things like that.

He wrote this detailed book on the history of managed care. I came away from that book saying, "On most medical debates, I'm just going to pretty much keep my mouth shut because there is so much that I don't know about." I just sound ignorant. I'm going to open my mouth on some of these issues.

There are problems that go back so deep and for so many decades that I have no idea how they're going to be solved. >> Well, there's a great book if you ever want to. I know you're an avid reader. It's called The Golden Triangle. It was written by a guy named William Kisic, K-I-S-S-I-C-K.

He was one of my med school professors. He was an internist, but he was a health economist at Penn. He was one of Lyndon Johnson's guys who was one of the authors of the Medicare Act. I will literally never forget this. I was a first-year med student. It was 1999.

He gave us a copy of his book. He said, "You know, we screwed up one thing with the Medicare Act. We didn't consider how the population might age." It's a very interesting look at how to finance a health care system if you're so inclined. It's a fairly quick read.

>> So, what's your opinion? What do you expect? I look forward as far as your crystal ball looks from your position in the coming decade, couple of decades. With all of the trends in medicine, the political trends, what do you expect to happen to the system of medical care that currently exists in the United States?

And how do you expect that to influence the profession of medicine? >> Sure. So, my general feeling is the more things change or people talk about changing them, frankly, the more things tend to stay the same with the health care system. And by that, I mean if you go back to, say, the 1990s when people were talking about managed care and HMOs and all of this jazz, the concept was going to be you were going to rejigger the health system so that your internists and primary care doctors were going to function as gatekeepers to the specialists where all the high-cost care occurs, and that was going to save the system a bunch of money.

And some of that still happens. Some of it doesn't. And a lot of people got annoyed. They wanted easier access to specialists and so on and so forth. And it didn't really change a whole lot as far as the cost goes because as medicine goes forward, things get more expensive.

And just restricting going to specialists isn't the only cost center. I think lately the bigger things you're seeing, you know, the Affordable Care Act has come in. But honestly, that really, from a provider's perspective, and I'm in Massachusetts where, you know, we had Romney care beforehand, so people ask us how, you know, Obamacare affects us in Massachusetts.

It doesn't because we've effectively had universal health care here for a decade already. The Affordable Care Act has brought some more people into the pool of being insured who weren't there before, but it's generally put more people on Medicaid, and there's still some uninsured. So, frankly, I don't see much of this changing a lot for the average practitioner.

I think that maybe in some places you'll have more people on Medicaid than you did before, but the same issues with getting access to care for people on Medicaid will still exist. I think the biggest thing you're going to see is you're going to have more doctors who are employed in large health systems, multi-specialty groups, and things like that.

And you're going to progressively have fewer and fewer doctors on their own or in small groups, two- and three-person groups, just because the bureaucracy and overhead of the practice of medicine is pretty substantial. And it's very difficult to do that unless you're already doing it on your own. You know, today's doctors just don't have training to deal with that.

So, honestly, short of that, I don't see there going to be any huge changes to how things get delivered. I think in general you're still going to be dealing with the inefficiencies we have now, and you're going to have your primary care doctor who maybe is or isn't your gatekeeper.

And that person might be in a bigger and bigger group, and you may or may not see the same person each time. But I don't see any sea changes coming. You know, every time there's new technology, some of it gets adopted in certain ways, and there's a promise for it in other ways.

But a lot of it doesn't sort of shake out the way you think it would. And still, you know, a lot of the time you're still left with going to your doctor, hammering out your complaint, doing some blood work, and getting some x-rays, and that's that. But I think the biggest thing you'll see is you're going to see that consolidation into larger groups, and you're not going to have those mom-and-pop practices out there as much as you used to.

But other than that, I think there's a lot of smoke being blown about what's going on. You know, people try to tinker with the delivery system for large populations, and, you know, some of it helps a little. But I don't see that, say, some of the inventive ways of delivering care that are coming out of the Affordable Care Act are going to magically transform the way most people get their health care delivered.

I just don't think that's what's going to happen. I think, you know, you've got 10 million more people on Medicaid. They're still going to have trouble finding doctors who take it. That's really the main change you'll see. You as an average patient, I don't think you're going to see much, other than your doctor might be in a bigger group or employed by a hospital.

You don't expect a nationalized medical system in the U.S. in the coming decade or so? I don't see how that can happen, frankly. I mean, I guess anything can happen, but, you know, here's the way I see it. I don't know all of the political capital that was expended on the passage of the Affordable Care Act.

You know, my friends who are big proponents of it or whatnot will say that it would have been impossible to get a single-payer system then. So that was a big opportunity, and, you know, we got the ACA, and that's what you got. And so far, you know, some of the provisions are good and some are complicated.

From where I'm sitting, most of what I see is you've got more people on Medicaid. Okay, so be it. The issue you're going to run into is a couple of things if you're going to nationalize the medical system, which is what the VA system looks like. You know, I could tell you what it would look like on the patient end of it.

But as far as getting that system of nationalizing the providers, you're going to have to assume everyone's medical student debt. So your average graduate's graduating with $180,000 of debt. So you're going to have to assume that because you're not going to be able to get physicians to go into a set practice scheme.

I mean, you've got to realize, Joshua, we're already basically being paid by the government through Medicare. Of course, right, right. You know, they're the benchmark for rates, and you're directly being paid by them. So in terms of them calling 100% of your employment shots in terms of the federal or state government, you're going to have to forgive everyone's medical school debt, or at least people coming through, you're going to have to assume that.

So that's a pretty hefty chunk of money, about $200,000 a pop for current graduates. So that's not trivial. The other thing is you're going to have to completely revamp the medical malpractice system and overcome the lobby that the trial lawyers have. Not that malpractice is a humongous issue on a day-to-day basis.

I mean, it's not like everybody's getting sued all the time. That's not how it is. But you are not going to be able to have a system where you can have medical legal liability the way it exists now and be a federal employee. It just won't work. I mean, legally, it's not possible.

So that would need to get hammered out. And I don't see how that could be reconciled. You know, there's a famous quote that Ezekiel Emanuel leaked to The Wall Street Journal when his brother Rahm was the White House chief of staff. And Ezekiel, who's a physician himself, was saying, well, what are we going to do about tort reform in here, Rahm?

And Rahm basically told them to put it where the sun don't shine. And that was then. So I don't see that changing. And then the other thing is you're going to have to take the entire existing system and somehow federalize the entire thing, which I just don't see how that would work.

And I also don't see the majority of the patients being satisfied with the way that system would treat them in terms of responsiveness to your getting in for appointments, customer service, and so on and so forth. So I just don't see that. And the other thing that I don't see is, you know, if you talk about physicians, it is not one monolithic entity.

You know, I know people talk about when the ACA got passed, they said, oh, you know, the American Medical Association supports this. Well, the American Medical Association really doesn't represent most physicians. Most physicians are represented by their subspecialty. So, you know, the American Urologic Association really speaks for me.

We've got a political action committee. We've got our issues. And they have nothing to do with what the pediatricians have to deal with, say. So most providers are dealt with either at the state level with their medical board or nationally with their specialty group. So you're talking, you know, a couple, three dozen different specialties, trying to bring them all under one umbrella.

I mean, you can't even get physicians at one hospital to try and unionize, let alone nationally. I just don't see that happening anytime soon. I think there's too many moving parts. And I think a lot of people would probably just opt out of that, frankly. So I just don't see it.

You know, call me crazy, but I don't feel the groundswell, you know. I guess I'm looking at it, and it's so fascinating to hear some of those practical things that you see and think about. And we're just guessing the future. Guessing the future, we're pretty much probably both guaranteed to be wrong.

Oh, of course. Yeah, there's no way I'm right. I look at it with regard to the political will. And so when you look back and you look at how the Affordable Care Act was passed, the midnight shenanigans, the right before Christmas, and you go back and you kind of look and say, okay, this was what was done.

And President Obama basically used all of his political capital to get it through. I look at the political situation now, and so as we record this on May 31, 2016, you have Bernie Sanders and Hillary Clinton both with – well, Bernie Sanders with a huge groundswell of support with absolutely in favor of a national system.

Hillary Clinton has lobbied for that for decades since she was the first lady of the United States. And then on the other side, you have Donald Trump who previously – evidently his opinion has changed. Who knows what it will be next week, but evidently in the past, he supported a nationalized health system in the past.

And when I look at it politically, I think that most US Americans don't actually believe their politics in the sense of this. You see that many people don't want a national – many people don't want a nationalized system of health. You look at the polling data and say, "I don't like it.

Get rid of – repeal the Affordable Care Act." But I look and say, okay, well, where are the people who are willing to say, "Get rid of Medicare"? Because we already have a national system of health. You just go into it at 65 and it's the same lack of consistency that exists with people regarding private college education versus government, state-paid college education.

Many people would say even today in the current political debate that's happening in the run-up to a US presidential election, everyone is, "No, we can't have government-paid college." But where are the people who are willing to turn around and condemn the fact that you have government schools from K-12?

And so it's not that difficult once you point out to people, "Look, we already pay for K-12. We already have that. So why not just pay for years one through four of college?" And so I think the same thing will ultimately apply over. People are actually politically – very few people are willing to stand up and be against Medicare and say we should get rid of Medicare.

And so thus when brought into the world of debate, it's so easy to point out the flaws in that position that I just look at the – I look at the groundswell of political support in that direction. I assume a Hillary Clinton presidency and I would – it's just I expect it in the next decade or so.

Now, I expect those problems to be hammered out and I expect that what always happens in the end of the day, it's not the politicians who actually do anything. It's the people behind who are making things happen and I expect that there will be great hoopla about rolling out a new program and then in the back room, people will try to figure out how do we actually fund this thing and how do we actually make this thing work.

But that's – I just look at the political climate and you have some people who are very much in favor of repealing the Affordable Care Act. But they don't follow that. They're not intellectually consistent to say let's repeal Medicare. Let's get rid of the Medicare Act. So therefore, because they're not – their position is not consistent, although they're angry, it doesn't – anger doesn't – I mean I guess it has some influence but who knows.

So I expect it to happen and I expect shortages and that would be what you described. You talk about the VA. I have a friend of mine, very close friend, who is a veteran, gets all of his medical care through the VA system and it's just amazing. He's got this nasty-looking boil on his face.

It's just this thing that's just oozing grossness on his face and he's been waiting about two months for an appointment to go and see somebody to even figure out what it is. And so as you're describing the shortage of doctors, I'm thinking, oh, great. So now we're going to go ahead and go into a nationalized system of some sort and it will be rolled in.

And so a few decades from now, we're going to be living under a nationalized system with a shortage of physicians and the wait time is going to be months just like it is in many places. Well, it already is that long. So I sort of laugh when I hear about these things because if you take – my personal feeling is as far as the delivery of healthcare, it is much easier to deal with on a state-by-state basis.

And I would have been very happy to see the ACA if they really wanted to try to fix the coverage issues, which I don't really think is what was intended. But I think if they had worked to expand Medicaid at the state level, taking into account all the local issues, I think that would have gotten a lot further.

And I'll give you an example. So I live in Massachusetts. My brother lives in Texas. Massachusetts has if not the most, just about the most doctors per capita of any state, many of which are in the Boston area. Texas has if not the lowest, one of the lowest rates of doctors per capita.

You could easily implement universal healthcare here in Massachusetts because there are tons of providers. Now, interestingly, the wait time went on average to see an internist from two months to three months when RomneyCare came in. But if you take states that don't have that stock of physicians or that are massive like, say, Montana or some of these other places in the Mountain West where there are whole counties that don't even have, say, a urologist, you're dealing with very different issues.

And for instance, in Texas, one of the issues you have to deal with is the fact that some of those patients are in the country illegally. So there are different issues everywhere you go, different physician stocks, different geographic issues. And I just think that the solutions are much more nuanced and much more local.

I mean, you know, I used to practice in Portland, Maine, before I came to Boston, which is, you know, about two hours north of Boston. We had patients who would come from five, six hours away to see me. That doesn't happen here because no one, you know, you pass nine hospitals on the way to Boston from five hours away.

But it's just every place has different issues as far as their physician supply, who's there. And this is one of the reasons why it's a great gig is you can find a job pretty much everywhere because there's demand everywhere. So I don't know. I mean, I get what people are saying.

I get the sort of smoke and mirrors about it. I think the one thing that you don't hear a lot is you don't really hear from the doctors about these proposed changes, partially because it's not palatable to a broad audience to hear high income people complaining about their job.

I think that's part of the issue. But the reality is, you know, if you impose additional changes on the U.S. health system, you've got to get the doctors to accept it. And I think that's one of the issues. I mean, if you look at, say, Medicaid, I'd say about 50 percent of physicians won't take Medicaid, either never did or don't.

And you just need to go see someone else. So just because you give someone an insurance card, no one's under any compulsion to see you. I mean, maybe someone might try to change that. But I think you would find that doctors would vote with their feet if that became the case.

You know, we can we can move around. We can go other places. So I think the thought that, you know, nationally there's going to be something that's going to nationalize the health care system the way the VA is. I just think you'd find a lot of doctors would do something else.

They'd go take cash. If their retirement age, they'd retire. You know, I think they would just find some other way to put some people would like it. You know, my old chairman from residency just left academia and is full time at the VA now. And he loves it. But, you know, the guy's 66 and, you know, he doesn't care.

So I just I find it hard to believe the political will to nationalize the health care. Put it this way. I actually I went to college in Vermont. Vermont couldn't even come up with a state insurance plan that didn't bankrupt the state. So I find it difficult to believe you can do that for the country.

If a state like Vermont with a few hundred thousand people couldn't do it. I didn't say it wouldn't bankrupt the country. So don't put words in my mouth. Medicare and Medicaid are already bankrupting the country. So this has been very true. Very true. I mean, we got 200 over 200, about 200 trillion dollars of debt owed on Medicare and Medicaid.

And personally, I think that will be of unfunded liabilities technically. But I think it will be one of the major political things we'll face in the coming decades. So for sure, for sure. It's certainly interesting to and I'll just one personal story and I want to come back to the finances.

I think we've successfully navigated this question without angering everyone on either side of the of the audience, but still talking about it in an interesting way. I guess the fascinating thing to me is just to see the from the perspective of a patient, the gross inefficiencies of the marketplace.

So I have an interesting perspective. I have an interesting perspective of seeing two things. One, I used to sell health insurance until the Affordable Care Act passed. And then when – and I only just did a little bit here and there with mainly individual policies. But in essence, the majority of my clients who had purchased health insurance from me were – the policies essentially doubled in price.

And so most of them dropped them. And then I also – so I got out of the health insurance business because I couldn't deal with – I didn't want everyone to be angry with me. It was always just something I did as a service to clients instead of a major business of mine.

And then on the flip side, my own personal experience. So after the Affordable Care Act, I don't participate in the health insurance marketplace anymore. I use a system of cash payment and a reimbursement system. So because of some of the provisions of the things that are in there plus some of the pricing.

So whenever I go to a medical facility, I'm always a cash payer. And so negotiating the cash payments and then seeing the things that I get billed for and just the gross inefficiencies of it, it's absolutely astounding how inefficient it is. And I don't know – I don't understand where the money is going.

But I do know that for the normal person, the patient is essentially almost never given an account. The patient is never given a – the patient is almost never referenced as somebody who has any stake in the matter financially. And as a cash payer – I took my daughter to the pediatrician a while back and I wanted to have her tested for something.

And again, cash payer, negotiate the things. OK, here's what the fees are going to be. Great. So I walked in and then I wrote a check on the way out and I paid the bill. And then I get a bill from the testing company after the fact for $450.

And they're like, "Well, we did this test for you." And I'm still in dispute with them. But simply saying, "No, I never authorized the test. You never gave me a price tag on it. You need to give me a price tag when I'm going to authorize something and I'll tell you whether we're going to do it." But no one once, not even once, did anybody mention to me that I was going to be billed for the test.

Did anyone say what the test was going to cost? It was just assumed as a matter of course that the test was going to be done and I wasn't consulted for my say in the matter. So it's just seeing it as a cash payer in the medical system, I just – I scratch my head and I just wonder how it even works as well as it does now.

You completely got me because I can just tell you that if someone asked me what one of my – I'm employed by a large academic medical center. If someone asked me what one of my fees is to do an office consult or a procedure in the office or whatever or what an operation would cost, literally no clue.

There are people in my hospital who I can refer them to to get that information. Actually, interestingly, the state of Massachusetts requires before I believe elective hospitalization that you can get that information now by law. It's a new state thing they came up with. But you go to the average doctor and he or she has not a clue what it would cost for a consult, for an EKG, for a shot to pay.

The reason is almost everyone who's coming in the door is paying you via some third party where – who cares what everything costs. So personally, I would love it if it were different. I mean I would love if the health insurance marketplace and if you have an enterprising listener or yourself want to fix this.

If it looked more like auto insurance where you had catastrophic plans that were priced appropriately and dealt with the big-ticket stuff, hospitalization, surgery, expensive diagnostics, and your annual checkup, getting your cholesterol checked, pap smear, have the flu, whatever. EKG, chest x-ray, you just paid cash. I think things would be dramatically better.

And you can look around. There are concierge practices or even – not even concierge-ish practices but practices that work on a cash basis where you just go in and pay them. I think that's pretty slick. It's difficult for a lot of people to do that. And a lot of people don't know a thing about anything that costs – what anything costs.

But listen, I feel your pain. I mean people ask me, "What does it cost for you to do the most common operation you do?" I literally have no clue. And the reason is I get paid by seven or eight or nine or 12 different insurance plans, one of which is Medicaid, which pays $0.30 on the dollar.

Medicare pays $0.40 on the dollar. And then Blue Cross pays $0.110 on the dollar. I don't know what it costs. And you take that and multiply it by hundreds of thousands of doctors across the country and hundreds of millions of patients and here we are. So, yeah, I mean what else can I tell you?

It's a disaster and it's amazing that it works. But that's the system. Save your money, Peter, while you're in it. So I want to go back to the finances and wrap up. And I want to talk about this because I think there are a number of compelling reasons to want to choose the practice of medicine.

We've gone over those. First, you can get a very large paycheck. Some physicians can get a huge paycheck, which is fantastic. There's a huge demand, as you said. There's a shortage. The work is needed everywhere. So if you want to move from one side of the country to another, just start looking.

But you could probably find a job, and it's a job that you can do for a long time. Now, one of the major things that we haven't touched on yet is the cost of becoming a doctor. And so to me, I see this as one of the downsides. The cost in both time and in money and in risk.

So I'll stage my objection and see what you would say about it from a purely financial, "Hey, is this how I'm going to go make my millions?" perspective. As you said, the fastest way into medicine is going to be four years of undergraduate work, four years of medical school, and then three years of residency, during which you receive a stipend of perhaps $50,000 a year.

And then you move into the world of being a physician. So let's call that 11 years. And if you're going to go into a specialty, which is where truly you're going to go from $100,000 or $200,000 a year to multiple hundreds of thousands of dollars, that's where then it's going to be even longer.

So the amount of time that you give up at the beginning of a career, both from the perspective of the earning ability and from the perspective of the lost time to compound, $500,000 a year being earned at 45 and trying to save from that, pay taxes at a high marginal rate, save and invest the money for retirement, as compared to $100,000 a year coming in at age 20, is going to be very, very different from a financial perspective because of the timing of when the income comes in.

And then also you have what you're giving up because my experience, physicians are generally brilliant people. You have to be and you have to have a work ethic in order to make it through. You have to have a knack for biology, but you have to have a work ethic to make it through the meat grinder that is medical school.

So you have to have the intelligence. And I just think, well, what are the other options where if you took this person with the level of intelligence that they have, with the character and the work ethic, and apply it in another field, what could they earn and what kind of impact could they make if they're not in the field of medicine?

So I see those as major downsides to approaching the medical field as a way of building wealth. What say you? Sure. So all valid concerns. You know, the upfront time issue is very legit. You know, again, at a minimum, you're talking 11 years of med school and a short residency.

You're talking more like 14 to possibly 16 years from the time you graduate college to going into practice for something more complex like cardiothoracic surgery, orthopedic surgery, etc. So there is a very big time component at the beginning. A couple of things. One, once you start residency, you get paid.

And most places, again, the median stipend is somewhere around 50 a year. And it goes up each year. You're out of medical school. So you could be if you may not be making 100 grand, but you might be a few years out of medical school and you're making 60 or 65.

Some places you may be able to moonlight, make a little bit extra, but you're not getting that huge initial salary when you start. However, once you're done, there are very few jobs I know of where you are going to be able to find work, be guaranteed as long as you're willing to work a normal amount of time per week.

Hundreds of thousands of dollars. I mean, every field of medicine, you will unless you do it to yourself and go somewhere where you're in a unique work environment. If you were working 40 plus hours a week, you'll make at least six figures. You know, if you compare it to something like, say, going into law, you know, by the time you're a practicing physician and you're making whatever your initial salary is, that's the same as becoming a partner in a law firm or maybe even less time without the risk of not being in practice somewhere.

So the other thing is in terms of the expense of loans, you know, the average med student graduates somewhere with around one hundred eighty thousand dollars in debt. Now, the mean and median are somewhat similar. Most of that is medical school debt. Some of it is undergraduate debt in the interest rates on these are about six or seven percent these days.

No one would give you that money, I don't think, if you couldn't pay it back. And so that's one of the few, you know, I don't know anyone else who would give, you know, two hundred fifty thousand dollars to a 22 year old and say, well, you know, see you later.

Pay me back. So those things are all legitimate. But, you know, the flip side is what else are you going to do? I mean, I know a lot of doctors sort of lament. Oh, I should have done this. I should have done that. Well, I'm very curious to know the other things these people would have done and what they would have had the aptitude for.

And sure, plenty of people could have done, you know, become an engineer, become a scientist, work to the hedge fund, whatever. I'm not 100 percent convinced that everyone who goes into medicine is really well suited to all of those things. You know, I'm not convinced that they're suited towards, say, the adversarial nature of the practice of law or they may not be really well suited to or have good business sense to go start your own company.

Certainly there are some people like that. But I think the notion that everybody who went to medical school would find some other job, it's going to definitely pay them as much with the same employment prospects. And they're going to be suited to it. I don't buy it. I mean, certainly some percentage of people for sure.

They could go do probably tons of things. A lot of people could probably do a few things. I'm hard pressed to find that the whole pool of people that went to medical school could wholesale go do something else and come out on the same end with the same financial and job market prospects.

I just – I find it hard to believe. So I'll grant the point about suitability because to me that's – and that's been my opinion thus far is if medicine is – if your – medicine is suitable to you based upon the interest that you have in the field, based upon the desire that you have to work and to practice in that area, that should be the overriding function.

And then we try to figure out what's the most efficient way to get through it at a minimal level of risk and a minimum level of cost based upon where you're trying to practice because you're right. I often compare and it's very important I think for people to recognize, but you can make $100,000 a year as an independent, self-employed plumber working out of one white van that you drive around and work with your own clients as a handyman.

I've worked with them. I know what they do. You have a very relatively simple lifestyle and you can make $100,000 a year with profit with no risk of employees and people do it all the time. Now, I have no interest in going and working as a plumber. That is not suitable for me.

And I think that it's probably common that people who are – I think it's probably common that people who desire or are interested in plumbing or at least in that kind of small scale thing – scale approach to it are probably not going to be the same type of person who's interested in doing advanced cancer research for a specific type of cancer.

There's a different function. But from a financial perspective, and that's my thing, from a financial perspective, you can take a young man or I guess a young woman. I've never known a woman plumber, but I'm sure they're out there. You could take a young man at 13 years old and that young man can – hopefully he's homeschooled.

He's got some flexibility this time. He works in the afternoons with his dad or as an apprentice working on a plumber's truck. From 13 to 15, that young man can build some basic skills. He gets a driver's license at 16, 17 years old. He completes his academic work, works part-time until he gets – fulfills the necessary academics.

And that young man at 18 years old can come into the field, especially if he's not coming in at 18 as a junior-level apprentice. He can come in and he can make 60, 80, $100,000 a year. And so if by the time you're 20, you're earning $100,000 a year, run the taxes, run the tax benefits of small business, run the tax benefits of earning only $100,000 a year, keep that lifestyle low.

He lives low. He saves, let's just say, 50% to 70% of that income. He lives on, say, $3,000 a month. So he saves 50% to 70% of that income and he starts buying capital assets. And he does that from 20 to 30. That man can be a multimillionaire by 30 all off of capital assets with a six-figure income coming in from his capital assets.

Meanwhile, then if he – maybe he is intellectually interested in those things. If I were out doing plumbing work, I'd be learning and studying things through an earpiece, a Bluetooth headset in my ear. I'd be reading in the evenings. And then you get him at 30 years old. He's financially independent.

He's got capital assets that are producing the income that he needs to live on. Now he can do whatever he wants. Contrast that with a 30-year-old coming out of medical school, coming out of residency, a couple hundred thousand dollars of student debt, has never had an opportunity to earn money, has never had an opportunity to save money because they've just been investing in their education.

They have this high specialization in one small area but they're already starting out behind because they're $180,000 in debt. And so now you're $180,000 in debt and you've got to go into the situation and you're forced into that scenario of working, earning a high income just so that you can satisfy your debts.

So that's the – it's always in what are you giving up. And that's to me – I look at it and I say it's far more efficient. We need to also hold in front of young people the idea of – that there are other approaches to it. And so the same shortage you talk about – I talk with my friends in the construction industry and there is a massive shortage of young people in the construction industries as well.

And so – and the challenge is because the learning curve is different, it's hard to come in as an entry-level worker and support a family as a 35-year-old in a construction industry. But if you come in at 15 or 16 or 18 years old and you can be earning all during that time, there's a radically different career trajectory there.

So from the standpoint of financial independence and from the standpoint of the financial benefits, I actually see something like blue-collar work as having in many ways a much higher potential than the professions that are often held as the most highly compensated way because especially of the extra decade or two of compounding.

You give me that 20-year-old at 18. They're saving. They're compounding through their 30s and at 30, they continue compounding. They've got a two-decade head start on the guy who at 40 has just finally got ahead. He bought the fancy house. He bought the fancy car. He finally got the debt paid off and now he's starting to save.

I think that's a very legitimate point you're making. Certainly from the standpoint of the numbers, it makes a lot of sense. I think the counter is a couplefold. Number one, there are types of people doing all sorts of things. Without a doubt, there are plenty of very wealthy people who created businesses like that.

There are probably also plenty of people who would be a plumber's assistant or whatnot who are probably not as academically inclined on the side as the guy you're describing. I'm sure there are all sorts of people, frankly. But I think that a lot of people who feel like medicine or something like that are not.

So certainly, without a doubt, the opportunity cost to a career in medicine is massive. I think that the main thing to keep in mind is that certainly someone who starts at a very young age, accrues a ton of assets, treats them wisely, lets them compound, and so on and so forth.

Of course, just from an actuarial standpoint, that person is going to be way ahead than the person who's been in school, layered on literally hundreds of thousands of dollars of debt and so on. But I think if you talk about your more typical scenario, your average scenario, I think that you'll find that you've got a lot of 20-year-olds out there who don't have the discipline to do what you're talking about.

So certainly, if somebody does that and they're doing all this extracurricular educational work and so on and so forth, I think that's great. But I think the reality is you have to say, on average, how many people are really doing that, versus if you take the average case of going into medical practice.

I think the average case has spectacular results from the standpoint of what's the marketplace look like, what's your average income look like, and so on and so forth. So no doubt, if you take exceptional examples of things in other areas, the results you would get would probably be way better and much more freeing with less opportunity cost.

I'm just sort of looking at it from the average standpoint. Put it this way. If you have the ability and the dedication to go to medical school, you don't have to be a genius. You can't be dumb, but you have to be willing to do the work. If you're willing to do that, you are going to end up with economic opportunities and financial opportunities and job prospects that are way in excess of what the average person is going to be able to realize, I would say.

Yeah, and I agree with you. The problem, and I'll give you the last word on the subject, but the problem here is sample set selection biases, is the average student who graduates from MET, the average doctor is not the average person. They've already been preselected. Number one, they have a high school degree.

Number two, they have a college degree. Number three, they have a medical school degree, and they've come out of residency. So at every stage, you're creating a sample set of non-average people. So what I would love to see, and I have no idea of how it could ever be done, I'd love to see those non-average people compared to other non-average people and see who's more productive.

And who knows if we could ever figure out a way to do that. Well, I'm afraid they're probably going to out-compete me and make my whole argument look completely moot. Peter, this has been so fun. I've thoroughly enjoyed our argument today and our discussion. This has been super, super fun.

Go ahead and give us any final closing thoughts, encouragement, and advice that you'd love to give anybody who's interested in medicine as a career, and then any follow-up information that you want people to take action on with regard to connecting with you in any way. Sure, absolutely. So if you're interested in going into medicine, do not listen to people with gray hair about what they have to say about the industry.

They went in at a time when things were very different than they are now. The medical marketplace and the practice of medicine is not what it used to be in the '70s and the '80s and even the early '90s. Just ignore them. It's a spectacular job. There's demand is high.

It's very helpful to society. And there's a lot of reward academically and in a variety of other ways. So if you're interested, do not be deterred by what the gray hairs have to say. People can come find me if they need clinical care at www.bidmc.org/kidneystone. That's primarily how I use kidney stones.

But that would be the easiest way to find me if you're in the Boston area and have a urologic need. That's fantastic. That's the worst web address in the history of the world. But I like it. It was available when I came here, so I took it. Nice, nice.

Awesome. Peter, thanks for coming on Radical Personal Finance. I appreciate it. All right, Josh. Have a good day.