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Hundreds of years ago, poor immigrants were forced to become indentured servants to repay the cost of their passage to the U.S. by performing years of hard labor. This practice lives on for U.S. physicians-in-training, who have no choice but to serve years of indentured servitude to teaching hospitals in order to qualify for a medical license or board certification. We know them as medical residents.

In recent months, the announcement that Hahnemann University Hospital would be closing in September has cast a pall of uncertainty over the future of hundreds of residents who suddenly did not know how or whether they would complete their training. Instead of helping residents find new hospitals that would best support their education, Hahnemann executives, in dealing with Chapter 11 bankruptcy proceedings, simply auctioned its 550 residency slots to the highest bidders, a consortium of regional hospitals, for a sum of $55 million.

The hospital’s recent “sale” of medical residents and their residency slots showcases how some teaching hospitals have subordinated their training mission in favor of the pursuit of profits.

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The residents were commoditized and sold as chattels to the highest bidder. Had this occurred to any other group, there would almost certainly have been public outrage. Curiously, there was little protest by entities that oversee the education and well-being of resident physicians. The response from the Association of American Medical Colleges was half-hearted, with a representative telling the Philadelphia Inquirer that the sale “was a big surprise.” Medicare objected to the sale, not because it should be illegal to treat residents as transferable property but because the sale would not allow Medicare to recoup past overpayments to Hahnemann.

To independently practice medicine, students must complete multiyear residencies at accredited hospitals after they graduate from medical school. Once they are matched with a program during the fourth year of medical school, their multiyear funding is tied to the program with which they’ve matched for the duration of their training. Finding a new position mid-way through residency is not trivial, making the instability of a residency program highly stressful for residents.

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Teaching hospitals have argued over the years that training physicians comes at a substantial expense. But studies show that graduate medical education programs positively affect hospital finances to the tune of $160,000 to $218,000 per resident physician. In the U.S., Medicare funds a fixed number of residency slots with direct government grants of at least $100,000 per resident — and that does not include the market value of services provided by the resident during his or her training. This amounts to about $15 billion a year in government funding for residencies.

The Hahnemann sale underscores how few strings are attached to this support.

The labor market for residents is controlled by nonprofit teaching hospitals through an intentionally monopolistic entity: the National Resident Matching Program. It is responsible for matching students with residency slots at teaching hospitals during their last year of medical school. These training programs are accredited by the Accreditation Council for Graduate Medical Education. Prospective residents can apply only through a single standardized process called The Match, which allows them to express a preference for where they would like to work, but ultimately locks them into a multiyear employment contract with a single hospital.

The National Resident Matching Program is exempt from antitrust regulation, joining a few other entities such as Major League Baseball and labor unions.

This framework allows a sticky web of private governing bodies in medicine, including the Association of American Medical Colleges, the National Resident Matching Program, the Accreditation Council for Graduate Medical Education, and a consortium of hospitals, to dictate the compensation and training conditions for medical residents.

The market power of this arrangement can be illustrated by resident salaries, which have not increased more than an average of 3.2% per year over the last 30 years. After completing four years of medical school, residents are paid about the same hourly wage as members of hospital cleaning staffs. Their non-negotiated salary ranges from $54,000 to $56,000 and reflects compensation for 60 to 100 hours of work per week, averaging 80 hours per week each month.

Residents are paid substantially less than nurse practitioners and physician assistants, but are required to work almost twice the number of hours, all in the name of training. Depending on whether residents pursue subspecialty fellowship training, they typically train for at least three to eight years, while shouldering a median debt of $200,000.

Residents serve as a reliable and skilled labor source for the hospitals in which they train. But hospital bureaucrats do not tie the value of these young men and women to appropriate compensation. The $55 million offered by local Philadelphia hospitals for 550 residency slots is a pittance when juxtaposed against future gains. The $55 million deal would pay for itself within one year because of the $100,000 annual government per-resident payments.

The sale of Hahnemann’s residency slots remains in flux as a California-based entity later stepped in with an offer of $60 million.

These uncertainties are anxiety-provoking for the residents whose life is on hold until the executives at Hahnemann release their contracts. Regardless of the price, the sale of Hahnemann’s residency slots sends an insidious message: Residents are indentured servants who can be bought and sold.

All teaching hospitals collude to some extent to treat residents as indentured servants. Hospital administrators and faculty members know full well the market value of residents, but undervalue their contributions. Through The Match, hospitals, and overseers of graduate medical education have leveraged their power to not only secure government funding for residency slots but also to cap residents’ salaries. Leveraging the teaching mission to bolster profit margins is nakedly opportunistic, and is underscored by the sale of Hahnemann’s residents.

Congress and the public need to hold teaching hospitals accountable for improving wages and working conditions of the residents they claim to train.

Kim-Lien Nguyen, M.D., is a cardiologist and an assistant professor of medicine at the David Geffen School of Medicine at UCLA. The views expressed are those of the author.

  • I have always known of the ultra-long hours that residents must work, but I had no idea how underpaid they were. Hospitals threatened with closing should be ashamed of themselves by soliciting citizens to write their Congressmen to fund them. Someone’s pockets are being filled on the backs of these students. Shame on them.

  • We should not take advantage any one specially MD we expecting they take care all of us which we need them most if they over work under pay who we expected good quality care
    That is why a lot of MD stress out use drug and alcohol more than average it is very discouraging

  • I agree with the thrust of this article but not the specifics. The “average” resident makes $60,000/ year, far more than a housekeeper in a hospital. And residents are in training and can’t be employed without completing a residency. At least now they make a wage that can pay for their housing, which is often subsidized, and their eventual salary will put them ahead of most employed Americans.

    Most residents don’t work more than 80 hours per week. That’s mandated by the ACGME. Some programs abuse that limit but most do not. 80 hours is ridiculously high, but many work less and very few work 100 hours.

    Hahnemann residents have all found residencies to complete their training. They aren’t being held hostage.

    Hospitals don’t profit $150-200k per resident.

    I think the author’s points could have been made without the exaggerations.

    • 1. I can show you my paystub. Hospital administrators refuse to put my actual hourly wage (I easily work at least 80 hr per week as a general surgery resident) which is 26 dollars / hour for 40 hours. So that’s 13 dollars an hour. Which is probably on par with that of the cleaning staff.
      2. Haha no, the majority of housing is not at all subsidized, don’t know where you got that info. I interviewed at 20 places and 1/20 had subsidized housing.
      3. Because of my debt of 250k, I can’t even afford to pay the monthly interest on my debt. Thus I’m accruing more debt even as I work 80 hours per week. There’s no telling if loan forgiveness will even be a thing in the near future as well.

      We pay for our meals at the hospital when on call. We pay for are parking which is also not subsidized.

    • Doc McStuffins, no argument that residents are paid a pittance and some institutions abuse them. As a general surgery resident you have it worse than most. And your salary, at $54k, is lower than the vast majority of residents in this country. You must be a PGY1 (I hope). Your colleagues in internal medicine, pediatrics, family medicine, radiology, emergency medicine, etc. likely work less than you do.

      I’m shocked that your institution doesn’t pay for your meals while on call. They are outliers if that is the case. Paying for parking is also rare. I’ve never heard of that. By subsidized housing I mean that on campus housing for residents is generally less than what it would cost if you found your own nearby your hospital.

      My point is that the article would have been more powerful to me if it stuck to data and didn’t exaggerate the conditions under which residents work, which are bad enough without needing to bend the facts.

    • Jeff, if you click on the links so helpfully provided by the author, you’ll see that she quoted that number directly from the AAMC’s 2018-2019 report on the Survey of Residents/Fellow Stipends and Benefits, which is the most data we have on the subject of resident pay. The median doesn’t reach $60,000 until 3rd year, and it’s not until 4th year that most people are over $60K/year–near or after the end of many residency programs.

      In addition, as Doc McStuffins pointed out, the author says that a resident’s HOURLY wage is equivalent to the hospital cleaning staff, which is true. Please see the 2018 Bureau of Labor Statistics data (https://www.bls.gov/oes/current/naics3_622000.htm#37-0000), which shows a median hourly wage of $13.65 for workers in hospital housekeeping services, and a mean of $14.34. If cleaning staff worked 80 hours a week then they, too, would make ~$52-55,000/year.

      To Doc McStuffins’s other point, there are very few residencies that subsidize housing anymore; most require you to find your own housing, like an adult. My residency program (which is located in one of the most expensive cities in the world) is the only one I interviewed at that offered a subsidized housing option, and it’s still >$1400/month for a 1-bedroom, 1-bath apartment (40% of my take-home pay). My residency also required us to pay for our own parking (~$100/month) and gave us $5/day for food at one of their sites (a sandwich cost $7). I don’t think the abuse is as rare as you think.

      I will also have you know that I am in pediatrics and in 3 years I had maybe 2 (outpatient) weeks where I clocked in at around 60 hours–the rest have been in the 70s-90s/week (the 80-hours-per-week rule is an AVERAGE over 4 weeks, so you can–and many often do–work more than 80 hours in a single week). Please stop making generalizations based on archaic stereotypes about the people who choose certain specialties. We all work hard and we all want it to be better.

    • @Jeff – they aren’t exaggerations. My starting salary was the exact same as Doc McStuffins. Housing is completely without subsidy and we do not receive any kind of cost of living adjustment or stipend despite living in one of the 4-5 most overpriced places to rent in the country. We get $300 for meals placed on our meal card – to cover six months of inpatient hospital work. Parking is $80 a month and comes out of my posttax paycheck.

      This, by the way, is at a major academic center with plenty of money to go around.

    • Millennial, I’m looking at the same data from the AAMC as everyone else. Sure you can quote the lowest rate for a PGY1 to make the strongest argument.

      Residents in different specialties do work different hours. All residents work exceedingly hard. Some exceedingly-er, as in the surgical specialties. In three years or less you will be a practicing physician earning many times more than a housekeeper. In my mind, you will still be grossly underpaid as a primary care doc, but you will likely end up much wealthier than someone in housekeeping, once you pay off your loans.

      I agree that the life of a resident is very, very hard and I’m thrilled that wellness has now taken center stage in the ACGME’s expectations for your training.

      I’ll stop there. Peace.

  • Wow! I am glad someone is talking.
    I know a friend of mine since his cardiologist’s training days, I could never forget the look on his face after a day of training at the Hospital. His salary was a misery, he had barely enough to pay for his expenses. Sometimes he would work day and night, he looked like a zombie. Although now he is a successful doctor I, can’t never forget his heydays. It was brutal.

  • When I was a third year med student the stupid trauma surgeon attending made me sit on the dirty trauma bay floor and watch some stupid tube dripping into a bag. and he wanted me to sit there for 30 mins and make sure the stupid thing was dripping and didnt stop.

  • My daughter is a fourth-year medical student and until she entered this process of training I had no idea how bizarre it actually was. When I try to explain it to friends and family I can tell by the looks on their faces that they don’t fully believe that this is how our doctors are actually educated. Your article hits the nail on the head, the physician training system is antiquated, profit-driven and completely detrimental to the students , young doctors and the patients. It’s a truly horrible system.

  • Re: Seattle Transplant

    That’s the thing though, it HASN’T hurt recruitment. Like other PNW residencies out there, Washington are some of the most sought after spots in the country. UW resident salaries are at about 61-62k on average. I’m sure you can complain to your patients in one of your local medicaid clinics and see what type of sympathy you get.

    And yeah, housing costs are high in Seattle but one is forcing you to live in the city’s trendiest neighborhoods. The amount of $ I spent on rent in residency was awful and basically kept me on a student budget until I was able to moonlight after I was eligible for an unrestricted license, but that’s delayed gratification for you.

    No one is forcing any M4s to place expensive cities on their rank lists. I’m sure most at UW wouldn’t change their situation for a spot in Indianapolis or Buffalo if given the choice.

  • I Applaud Your Integrity, Character and Honesty in Speaking TRUTH About how Our Gifted Healers Are Disrespected, Hurt, Harmed and Endangered Hypocritical to the Hypocratic Oath. My 26 Young Son, Earned A Doctorate in Medicine, from The University of Tennessee’s Medical School as A Commissioned Naval Officer, May 2018, yet Died By Suicide related to the Greed, Insensitivity To Medical Professionals, and Total Lack of Respect for THE GIFT OF LIFE By INSTITUTIONAL WICKEDNESS IN HIGH PLACES. An Oath Before A HOLY GOD, THE GIVER, SUSTAINER, AND LOVER OF ALL LIFE And Oaths before humans ARE ABSOLUTELY WORTHLESS IF ONE HAS NO INTENTION OF KEEPING IT EVER. IT’S A HEART THING; INDEED IT’S A SPIRITUAL THING TO RESPECT THAT WHICH IS SACRED INDEED. SHAME ON THE PROFESSION OF MEDICINE FOR KILLING THE SPIRITS, MINDS AND BODIES OF OUR GIFTED HEALERS. RESPECTFULLY A PERSON WHO CARES AND LIVES IN THE CREATOR’S LOVE PASTOR/REV. JAC’QUETTE GATEWOOD, RETIRED VOLUNTEER CLERGY AND HOSPICE PASTOR MOST GRATEFUL 2B IHS ONE MORE TIME SHALOM

  • Sorry, for as much as I agreed with Dr. Nguyen’s other op-ed here on STAT, this one misses the mark.

    Yeah, the HUH situation is atrocious and these residents just need to be let free to find spots like it was for the former St. Vincent residents I met all over the country a decade ago after that closure; however, it’s really hard to give the problem the appropriate attention when we’ve got more ridiculous complaining about the Match, as if a thousand StudentDoctorNetwork posts hadn’t already hammered that dead horse.

    Sorry, but it’s not the match that’s holding down resident salaries. The fact that residents are essentially unemployable without a completed residency is what holds down resident salaries. The match came into being to prevent the abuses of the past and to put all applicants on a level playing field. Perhaps Dr. Nguyen would prefer we go back to the good old days when you’d show up at an interview for a competitive residency and be told “Here’s an offer. You have 24 hours to accept it or it’s gone.”

    Yes, PAs are better compensated than senior residents, but that’s not a comparable market. PAs are are “fully trained” and able to have employers compete for their services, residents are close to useless to a hospital or clinic with out the completion of their postgraduate training. Quite simply it’s not the same job. A PA essentially operate for the entirety of his/her career in the role as a highly compensated senior resident. It ain’t a bad life, but that’s not the gig we signed up for. If you want to be a shot caller with the fully-licensed MD, you have to accept the delayed gratification that comes with it.

    And if you think that removing the highly regulated salary structure of ACGME residencies is going to cause resident compensation to increase? Sorry but I’ve got bad news for you. There’s a reason why the resident union at University of Washington was essentially laughed out of the room when they tried to demand PA-like salaries. They sat in some of the most coveted seats in medical training in one of the most desirable locations in the country, for which the Pacific Northwest has only two residency programs in a number of specialties for hundreds of miles. Hundreds of applicants would have sold their souls for those spots and didn’t get in. UW had ALL the leverage. You think the market was going to be kind to their salaries if it wasn’t pegged? C’mon now… Yeah, Seattle is expensive and not easy to do on a resident salary, but people who match in desirable cities generally aren’t hurting for other options. Nothing stopping them from ranking less competitive places like Rochester or Cincinnati higher on their lists.

    The ACGME and NRMP aren’t perfect, but you’d best be careful what you wish for.

    • I can actually speak to the pay at UW. The compensation is at or below the level of pay that I saw at Midwest programs I interviewed at while the cost of living of Seattle is far, far higher. Does it sound appropriate to have 50% of your wage go into your rent? That is the reality for many residents. We make so little that we are generally eligible to apply for low income public housing (<80% of area median income) which is telling. What disappoints me the most is that it seems the UW GME will not appreciate how uniquely toxic the relationship they hold with the resident body is until it begins to hurt recruitment. On the bright side, they are coming up with such terrible contractual offers that we will inevitably be bumped up the priority list for any low income programs run by the city.

    • “Yes, PAs are better compensated than senior residents, but that’s not a comparable market. PAs are are “fully trained” and able to have employers compete for their services, residents are close to useless to a hospital or clinic with out the completion of their postgraduate training. Quite simply it’s not the same job. A PA essentially operate for the entirety of his/her career in the role as a highly compensated senior resident. It ain’t a bad life, but that’s not the gig we signed up for. If you want to be a shot caller with the fully-licensed MD, you have to accept the delayed gratification that comes with it.”

      But that’s really the point isn’t it. Medical school graduates have more didactic and clinical training than a “fully trained” PA or NP at every stage of their respective careers. The market is different because the powers that be which profit off the backs of residents has conspired to keep it that way. Conspired so that they can claim residents are “close to useless” while paying residents half as much for twice the work and having them treat a higher volume of cases of equal or greater acuity than their 40 hour a week midlevel “team-members”. There’s absolutely no reason a medical school graduate shouldn’t have the same practice rights and ability to compete in the same market as a fresh midlevel.

      States such as Missouri have already created “assistant physician” programs with supervision and scope of practice similar to midlevels, for years we had General Practitioners who hadn’t completed residencies, and the military is quite happy to have General Medical Officers who are general practice physicians who haven’t completed a residency. Not convinced? Let med school graduates sit for the PANCE and prove they’re just as capable as those making $90K a year fresh out of school with less training and less debt.

      That will never happen for a few reasons. It’ll eliminate the profit center that residents are, and unlike physicians midlevel — especially NP — lobbying organizations would raise holy hell at the idea of encroachment on their turf.

    • I disagree with several points that you are making here: “Residents are unemployable”-addressed eloquently by the two above and “Careful what you wish for”. Towards the second point, reform has always come with risk but it is also the reason why we have an 8 hour workday and actual child-labor laws. You can list justification for low pay and the anxiety surrounding residency until the cows come home but the fact is when you describe the situation to someone unfamiliar with it like a family member at Christmas or just a random person on the bus/train they are universally appalled. For me, thats all you really need to know. It is wrong and people know wrong when they hear it. Furthermore you talk about the resident’s union being laughed out of the room at the UW, but that would never happen if residents on the whole were unionized and were able to work in concert to put pressure on institutions who weren’t negotiating. Any teaching hospital will grind to a halt instantly without their residents, ergo those resident have a TON of power, the difficulty is making it safe for them to use it. If we had a national resident union that could put pressure at the ACGME level (pressure on institutional accreditation) then we would see a LOT more cooperation from institutions. If residents had strike protections built into their contracts by the ACGME you would see a LOT more flexibility on the part of programs. Also it makes sense to compensate different locations differently, every other industry does this already. No company is paying people doing the same job in Cleveland and Manhattan the same amount. That is preposterous.

    • Thank you Dennis. You are on target. Today is Labor Day and all the gains organized labor has made for workers were made through committed workers taking risks and staying the course with a noble goal.

      These medical residents are already exhausted. Where they will find the time and energy to organize is hard to imagine yet if they simply begin the process the union will take over the the bulk of the organizing. Someone needs to get the ball rolling and maybe it needs to be the fourth year medical students.(?) Come on future MDs, just do it. Begin talking among you until you have just a few hardy souls willing to step up.

      Margaret Mead told us, ” Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”

    • This article is absolutely correctly. As a senior resident: my salary is $62K. I work no less than 80 hours per week. That’s about $15/hr. Living in NYC by apartment $1500/MO excluding all utilities.
      No, residents are useless to a hospital, they are free labor. Since my intern year I help trained multiple PA who are working in my hospital making no less than $150k/Yr, working 40Hr/wk yet I’m working 80Hr/wk for $62K/yr. Those PAs always seek residents input (Thank God they do!).
      After med school you can’t practice in the US without residency. Residents don’t have a choice, we are happy to have matched, whether it is Iowa or NYC.
      Completely understand it is not a perfect system but that doesn’t mean we should accept it as it is. “Perfection is not attainable, but if we chase perfection we can catch excellence” Vince Lombardi

  • I would certainly not wish this type of treatment on any of my children. The medical community as a whole should deplore these old practices and unite, provide safe and healthy solutions for all.

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