Published May 10, 2023
Most physicians remember the day they discovered where they would spend the next several years in residency training. Many also remember the moment elation gave way to reality as they began to calculate the cost of living and loans (averaging nearly $200,000) and realize it was more than their future salary. The annual salary for a first-year resident physician averaged $61,000 in 2022. Despite working up to 80 hours per week, resident compensation is lower than other professional occupations that require fewer years of specialized training (e.g., flight attendants, electricians, police officers, dental hygienists, registered nurses). As a result, many residents have turned to unions to advocate for better compensation, matched retirement plans, and childcare support. Others have opted to advocate for change within their own program without union support. With physician burnout affecting an estimated 40%–50% of physicians, fair compensation is one of many avenues that can improve resident physician job satisfaction and sustainability at a time when many health care workers consider leaving healthcare altogether. Compensation alone will not fix burnout, but it can relieve financial stress and help residents feel valued.
Salaries in graduate medical education are supported largely by funding from the Center for Medicare and Medicaid Services (CMS). Each accredited residency program receives a per-resident amount (PRA) of reimbursement for each academic year. The formula used by the CMS to calculate the PRA is still based on the hospital’s cost per resident in 1984, adjusted for inflation, with minimal change in the last four decades. Although the PRA is not directly linked to the salary a resident receives, the use of an outdated formula implies an indifference to the important role of residents and the changing and challenging context in which we work.
In fact, since this formula’s inception, few studies have systematically analyzed the cost per resident that an institution incurs or quantified the benefits residents provide. We know that residents provide direct patient care, teach medical students, and contribute to scholarly work for their institution. Without accurate calculations, however, program leadership is left with a lump sum of federal funding and no clear method to determine how much each resident should be paid.
Because residents are placed in their jobs through the Match and not via a free market process, competitive salaries do not necessarily attract the best residents. As a result, resident salaries are often set to match nearby programs. In 2022, resident physicians and fellows filed a class-action lawsuit against this practice but the lawsuit was dismissed after the Senate passed legislation protecting Match and residency programs from federal prosecution after extensive lobbying by the Association of American Medical Colleges (AAMC) and other stakeholders.
About 15% of resident physicians are represented by the Committee of Interns and Residents, the largest union of its kind and a part of the Service Employees International Union. However, it is unclear if unions address the above issues and improve resident well-being. In a 2021 study among surgical residents, salaries in unionized and nonunionized programs did not differ significantly. Residents in unionized programs had slightly better vacation and housing stipends, but this did not translate to reduced physician burnout.
In our own pediatric residency program (Boston Combined Residency Program), residents are employed by two different institutions — one with and one without a house staff union. The nonunionized program offers a higher salary with more out-of-network healthcare benefits and the unionized program offers an educational fund but less comprehensive and more affordable healthcare coverage. Although much has been written about the pros and cons of unionizing, whether unions are more effective in promoting change than nonunion advocacy remains unclear. Nevertheless, unions are one method for organizing and gaining a seat at the negotiating table. Residents from University of Pennsylvania, Montefiore Medical Center, the University of Vermont, University of Massachusetts, Stanford University, and Keck School of Medicine of University of Southern California have all proposed house staff unions in the last year.
Residency training can be expensive to programs. Faculty take time to teach and mentor, educational conferences require planning and money, and recruiting and paying resident physicians all come with costs. However, residents are first and foremost employees of their sponsoring institution and are covered under federal labor law. As such, residents have the right to unionize and receive benefits that are offered to other employees.
To address the often-conflicting roles of trainee and employee, we offer the following recommendations for negotiations between postgraduate physicians and their institution or program:
Hear all sides: The topic of compensation is often emotionally charged. Residents can feel trapped when negotiating because they are dependent on their institution for training and switching to another program is difficult. Administrators often have a scarcity mindset and limited flexibility regarding resident salaries because the primary source of funding is Medicare and other federal funds. Residents and administrators alike must recognize these limitations and remain open to new perspectives.
Be data-driven: Just as we practice evidence-based medicine, discussions of employee compensation should also be driven by data. Although data on resident value is lacking, it is helpful to share information such as average rent costs, salaries at neighboring institutions, and examples of benefits from comparable programs to inform a discussion about appropriate compensation. In our case, sharing the finding that rent prices in Boston have risen dramatically and far outpaced the rate of salary increases, led the program to investigate need-based housing stipends for all residents.
Make an ask: After doing research, make a specific ask regarding benefits or salary. Leaders often want to support residents but do not know which changes will make a difference. For some residents, childcare support is a primary concern, for others, loan repayment is a priority. Finding consensus and prioritizing requests will improve the chance of a successful negotiation. At our institution, residents asked to include first year residents in an annual bonus program. This targeted ask was ultimately honored because it gave administrators a specific action for which to advocate.
Residents benefit from residency training but are also critical to hospitals. Early career physicians need to be offered fair compensation to continue to attract diverse talent to the medical field. Advocating for systemic change is necessary for physicians to attain long, fulfilling careers.