How has Return on Investment of a Career in Orthopaedic Surgery Changed Over Time?

Abstract

INTRODUCTION The rising cost of medical education, coupled with a lack of personal finance education, can have detrimental effects on both the personal and professional well-being young orthopaedic surgeons. This study utilizes a career in orthopaedic surgery as a case study to 1) elucidate changes in the return on investment (ROI) of a career in medicine 2) discuss the personal and professional implications of these changes for young surgeons, and 3) advocate for widespread personal finance education for trainees. METHODS Financial analysis principles, including net present value (NPV), internal rate of return (IRR), and multiple on invested capital (MOIC), were used to examine ROI of a career in orthopaedics in 1989, 1999, 2009, and 2019. Data was collected on undergraduate and medical school tuition, resident salary, and orthopaedic surgeon compensation from publicly available databases. Student loan payments were excluded from this study. All values were adjusted for inflation to $US Dollars in 2020 for comparison. RESULTS From 1989 to 2019, there was no change in NPV, IRR decreased from 25% to 15%, and MOIC decreased from 21.5x to 8.0x. During this time, there was also a 172% inflation-adjusted increase in the cost of medical education. This resulted in a 3-year change in the orthopaedic surgery break-even point from the fourth year in residency to the second year in practice as an attending surgeon. DISCUSSION Since 1989, ROI has decreased substantially, and the break-even point has been delayed by 3 years. By understanding how their financial situation differs from those who graduated decades ago, young orthopaedic surgeons can better inform themselves and plan accordingly. Leaders in the field and training programs should consider offering personal finance education that is uniquely tailored to young orthopaedic surgeons and trainees today.