Contradictory Results
A few years ago, the New England Journal of Medicine published a study that
evaluated various types of professional education as if they were financial
investments.
The idea was to see if doctors were overpaid, by considering primary and
specialty medical education as investments and comparing them with investing in
education in business, law, and dentistry (but not university professors -- that
would have been too embarassing). Adjustments were made for differences
in average working hours. The authors found that primary medicine was the
poorest investment of all of these. Specialty medicine did better, but was
not out of line with the other professions.
In the results was this oddity: By the criterion of the net present
value of lifetime educational costs and income benefits, specialist physicians
tied for highest with attorneys. Both were ahead of business school
graduates.However, by the criterion of the internal rate of return,
specialty physicians, with a 21% average return, were well behind the attorneys'
25% average return, while the business school graduates' 29% average return was
the highest of all. The present value and the internal rate of return
ranked the alternatives differently!
By the way, since this article's 1994 publication, managed care has forced
specialty physician incomes down by perhaps one-third. This has sharply
lowered the investment value of a specialty medical education.