Smart Money MD

Large cities with robust public transit and cultural hotspots are the ideal place for some of us.  Vast nature and open spaces will appeal to others.  Some of us can only imagine living in warm weather next to sandy beaches.  Fortunately all three of these locations need healthcare.  As physicians, we are likely to be able to find a job nearly anywhere we’d like.  Unfortunately some more coveted regions of the country come at a cost.  This cost can manifest in several aspects:

• high cost of living
• low wages
• competitive market
• extenuating commute times / traffic
• natural disasters (read: southern California)

For those doctors graduating with an average debt in the six-figure range, the lifestyle of where we choose to work can strongly influence where we decide to settle.  How much of a range can we expect to see? Let’s take a look at a few cities:

Honolulu, Hawaii

Who doesn’t like beautiful beaches, tropical weather, and poke all year round? There are aspects of your life that you will have to compromise on if you decide to live there.

Median home price in Oahu in 2018: $810,000

Average physician salary in Hawaii in 2018: $241,000

Pros: Great climate, natural landscape, paradise in what people otherwise would vacation

Cons: bad traffic, high cost of living, rock fever

Toledo, Ohio

Unless you have family in this area, it is unlikely that any physician would consider moving there for career reasons (other than potentially high pay/opportunity).

Median home price: $68,000

Average physician salary in Ohio: $275,480

Pros: High salary/housing ratio, no traffic, low cost of living, proximity to a Great Lake

Cons: limited culture, relatively isolated area of the country, cold, snowy winters

If your main goal in choosing between Honolulu and Toledo is to get out of debt and build up your net worth as quickly as possible, then there is no comparison.  There is a good chance that in Toledo you will find a better paying job with less work, less demanding clientele, higher reimbursement schedules, and lower living costs on all accounts.  Yet, there are still people who will opt to practice medicine in Honolulu over Toledo…

According to a recent Doximity poll, the majority of the income-favorable metro areas aren’t in the coasts:

San Jose may actually be an outlier on the map, but the Bay Area poses challenges mentioned above that aren’t necessarily compensated by a marginally higher doctor salary.  What polls typically don’t reflect is the rigor of the daily grind.  For instance, one of my colleagues currently works in a six-physician group in the Bay Area.  His group has five offices and two surgical centers to commute among during the week.  He takes practice call every three weeks since the practice has a rule that the senior three doctors do not have to take call.  In addition, he takes shared call for five regional hospital every five weeks.  Practice building events include lectures at monthly seminars and trade shows.

Using the Geographical Arbitrage Scale in job selection

I define the Geographical Arbitrage Scale (GAS) to be graded with five variables, each with a maximum score of two points (decimal points are okay!).  These are common variables that physicians consider when taking a job:

• Income — earning potential includes retirement options and benefits
• Work/life balance — includes access to family and friends
• Environment outside of work — weather and activities that you’d enjoy
• Career satisfaction — opportunities to innovate or lack thereof, depending on physician preference
• Cost of living — higher score means lower cost of living

The GAS comparison between Honolulu and Toledo might look like the following:

Find out what situation you are in, and adjust your career goals accordingly:

It would be interesting to see how long one could tolerate a low GAS score that might offer a very high income potential.  In a case like that, one could “rebalance” the GAS score after five years to achieve a happier medium.

What is your GAS score?