The Hard Truths About Medicine I Wish I Knew

It’s human nature to think that the grass is always greener on the other side. No one else in my family was in medicine, yet my parents encouraged me to become a doctor because it was a steady paycheck, not tied to the state of the economy, and prestigious. And yet, in talking to many of my friends who are physicians and have children, they would never encourage their own kids to go into medicine like they did. Like most things, you have to experience it yourself to realize the upsides and downsides of a career.

So, now that I’ve climbed to the top of the mountain, here are the hard truths about medicine that I wish I knew when I was choosing a career.

Clinical medicine is labor and not scalable

At the end of the day, there are two ways to create economic value in this world - labor and capital. Even if you’re the famous surgeon operating on celebrities and athletes, you are still in the labor class. What that means is you are trading time, energy, and skill for money. Granted, physicians can convert this life energy into money at very high rates, but it is still labor.

There are obviously important downsides to this. First, you have to keep the trade going to maintain your income. If you wake up one day and decided not to go to work, you would not make any money. And there will be a day for all of us when we no longer go to work. Hopefully that’s a decision that’s made on our terms, but when that day comes, the income stops.

What this also means is that your income is tied directly to time, and time is our most precious and finite resource. Generally as a surgeon, if I want to double my income, I have to work twice as much. With our progressive tax code, I might actually have to work more than twice as much. You very quickly run into a ceiling of how much you can work.

Finally, on the topic of taxes, labor income is taxed very unfavorably relative to capital income. The tax code is a way for the government to incentivize the economic activities that they want to see. Capital income in the form of dividends and capital gains are taxed much more favorably than labor income reported on a W2.

Medicine is limited upside, unlimited downside

Most companies eventually become obsolete, lose money, and disappear. So why does a stock index fund or a venture capital fund make money over the long term? It’s because most investments have limited downside and unlimited upside. If you invest in a start-up or buy shares in a company that crashes and burns and goes bankrupt, assuming you didn’t borrow money to make the investment, the most you can lose is 100% of the investment. It goes to zero. But what if you invested early in Apple or Microsoft or bitcoin? You can make many multiples of your investment, and just a single investment like this can more than make up for many other ones that went to zero. I first bought bitcoin in 2014 when it was $700, and at the time of writing it is over $100,000. That is an over 14,285% gain. I have shares of Tesla that I bought in 2019 that have gained 3,100%. If you have the opportunity to make a bet like this, you would want to make as many of these bets as you can.

Conversely, when I perform a surgery, I know what the financial upside to my practice is going to be. I’m putting aside the benefit to the patient, obviously, which can be tremendous, life-changing, and very gratifying, but difficult to measure. At the end of the day, this is a blog about finances and wealth, which still is taboo for doctors to talk about. As if doctors can feed their families with thank you cards from patients…

Anyway, the financial upside of doing a surgery is fixed - it’s what the insurance company will pay for the CPT codes. If I fix a professional athlete’s knee and they go on to earn $10 million dollars per year with their next contract, I’m still only making a few thousand dollars.

But what about the downside? The downside is unlimited. All sorts of bad things can happen during and after a surgery. These are all very rare things, but patients can die on the operating table. They can sustain life-changing complications threatening life and limb. They can have infections after surgery. That professional athlete might not be able to return to sport. They could come back and sue you for potential lost earnings! Or taken to the extreme, there are innumerable examples of disgruntled patients that have attacked or even killed their doctors.

So from a financial standpoint, the upside of doing a surgery is a few thousand dollars, and the downside is unlimited. Would an intelligent person make this bet? Would they make this bet over and over?

You will deal with difficult people on a daily basis

Roughly 9-15% of adults have a diagnosable personality disorder. That means if you are in a patient-facing medical field, you are almost guaranteed to have to interact with a difficult person on a daily basis. So unless you are a psychiatrist and knew what you were getting yourself into, this is an aspect of medicine that I wish I knew before.

We don’t really get trained on how to do this either. All the time I see patients that have legitimate physical issues that would likely benefit from elective surgery, but I just cannot bring myself to operate on them because it would mean being married to that patient forever. And it can be very difficult to explain why I’m not recommending surgery.

I think some people handle this much better than others, and it may have to do with your personality type. I am INTJ, which means I’m an introvert and dealing with people drains my energy. There are many successful surgeons that have similar personalities, but it is something that very few people talk about and that I wish I knew.

I realize that this is shaping up to be a very cynical post. I’ll wrap up by saying that despite these challenges, I do really love my life and everything that my career has given me. As I said at the start of this post, the grass is not always greener, and every profession has its challenges. Hopefully this provides more impetus for doctors to get their financial house in order, so that they can do this difficult job on their own terms.