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How COVID-19 Has Impacted Doctors’ Personal Finances


By pure chance, the timing of my exit from medicine occured just months before a nasty novel coronavirus started circulating. As such, I’ve been on the sidelines for what has become the greatest infectious disease crisis this world has faced in a century.

I’m not the most qualified person to discuss the financial impact of this pandemic, let alone the numerous other impacts on the profession, the day-to-day lives of physicians, and the amount of stress so many are under.

Fortunately, with several promising vaccines likely available late 2020 to early 2021, there is an end in sight. Unfortunately, the financial burdens brought about by COVID-19 may persist.

An anonymous reader and writer inquired about me publishing a piece of theirs on this very topic. This is that post. Let’s dig into how doctors’ finances have been and may continue to be impacted.




How COVID-19 Has Impacted Doctors’ Personal Finances


What does the long-term impact of the coronavirus pandemic look like for physicians? Even after the public health crisis has subsided, physicians—like the rest of the world—will feel its effects long after quarantine has been fully lifted.

The pandemic marks a cataclysmic shift in how the world operates, and personal finances have certainly not been immune to the change.

On top of the lasting financial disruptions caused by lay-offs, furloughs, and pay cuts, physicians and other medical professionals will likely need to restructure their approach to money in order to maintain their current way of life, both today and in their retirement years.

Let’s dig into some of the most prevalent trends circulating in a post-pandemic world, their implications in the future of physician work, and how you can make the best of these trends in your own financial situation.



Recovering from Pay Cuts


The beginning of quarantine marked unprecedented numbers in healthcare lay-offs and furloughs, totaling to a 1.4 million job loss by April. Without income from regularly scheduled procedures and routine check-ins, physicians’ offices were hit hard by these cuts in the medical workforce.

Even worse, what was first estimated as a month-long stint at home has stretched over the better part of a year, with some offices still working through their re-hiring freezes.

If your position was affected by the pandemic, the question you need to ask yourself is how you can not only survive until your first day back in the clinic or hospital, but also fully recover from months without your primary source of income.

The first step is to research the types of resources that are still available for COVID-19 financial relief and create a strategy for leveraging these support channels.

As an example, let’s look at student loan debt, which averages around $192,000 for physicians upon leaving medical school. The federal government’s recent announcement of forbearance on all federal student loans until the end of the year has allowed students still grappling with their debt to think more strategically with how they are spending their money.

Though typically you might want to tackle these loans quickly and aggressively, the forbearance—which includes a complete suspension of loans and 0% interest rates—will give you leeway to stow away some cash for riding out the rest of your unemployment or tackling other fixed expenses.


Living Like a Resident


Although you’ll more than likely have a different approach to spending than other physicians in the field, times of financial hardship will require frugal and lavish spenders alike to adopt a money mindset they held during their residencies.

At the first sight of their attending paycheck, many medical professionals experience what is known as lifestyle inflation, which is typical in the world of physicians and other high-earning careers. Lifestyle inflation is, essentially, when you increase your spending as your income goes up.

The disparity between your last residency check and your first attending paycheck is a substantial one. If you’re not careful, you’ll soon find yourself purchasing a luxury car, a sizable home, and a membership at the local country club rather than cautiously allocating funds to necessary expenses.


In normal times, lifestyle inflation means you aren’t putting your money where it needs to go for your future—in a retirement account, toward medical school debt, or in your savings. In the midst of a pandemic, however, lifestyle inflation could mean a complete disruption of your financial roadmap, including early withdrawals from your retirement contributions or investment portfolio.

Riding out the financial shockwaves caused by the pandemic requires you to once again live like a resident. There’s a good chance you were raking in the same salary as the average American during your residency stint, anywhere from $40K-$60K. What do you need to do to once again live under these financial restraints?

Although it is hard to cut back on a lifestyle you already have, adopting this mindset will be critical to financial success in a post-pandemic world. Americans are already more concerned with saving than ever before, with personal savings rates hitting a record high of 33%.

Since doctors should already plan to save roughly 10% more than their non-doctor peers, spending like you’re living on a resident’s paycheck is the only way you’ll have enough in the bank for both your future and other emergencies situations along the way.


Leaping to Telehealth


But what happens if you aren’t able to cut your expenses? How can you expect to preserve the health of your personal finances with a pay cut or complete suspension of your income?

That’s where telehealth can come into play. Like many other industries, COVID-19 has effectively accelerated the rate in which healthcare has adopted new technologies into its existing practices. In the early months of quarantine, a significant majority—71%—of patients considered telemedicine as a new means of receiving treatment and care from their doctors.

But what’s even more noteworthy is that the telemedicine trend shows no sign of stopping after social distancing sanctions have been fully lifted. Even in 2017, one out of every five consumers said they would switch to a doctor that offers visits over video conferencing, and the demand has infinitely scaled since the start of quarantine.


What does this mean for you?


Telehealth is a huge, mostly untapped market that is in high demand from your patients, and it could be a way to add a new stream of income to your household (or replace your old one completely). Depending on your specific practice, you may be able to provide care that is equivalent or even better than an in-office visitation, thanks to reduced waiting times for patients and greater accessibility for those who live far away from your office.

Before you begin your electronic visitations, it’s important to review your contract to understand any limitations or restrictions to telehealth opportunities at your practice.


Reimagining the Household


Telemedicine is predicted to permanently change the way that physicians work, which includes where they work. The ability to see patients effectively, regardless of location, means that many doctors have left areas with high costs of living for neighborhoods that are more affordable and more private.

Add to this remote work trend an immediate demand for suitable home office space and it’s no surprise that the pandemic is both rapidly increasing the homebuyer’s market and changing the features that homeowners want in their homes.

As with any major purchase, here are a few financial considerations to keep in mind as you reimagine your home space for a post-COVID lifestyle.

Perhaps the greatest contribution to the increased interest in home ownership has been the unprecedented low-interest rate mortgages flooding the market, which dropped as low as 3%. Although purchasing a new home isn’t always the best financial plan of action, a low, fixed-rate mortgage could end up saving you thousands or tens of thousands of dollars during your repayment period.

Compared to paying your monthly rent to a landlord, home ownership is also a way to build up your financial assets.

A home’s equity, or the value of your interest in your home, is a formidable resource in your personal finance toolbox. Your house’s equity can increase over time from fluctuations in the market or from home renovations, making home ownership not unlike any other type of investment. Home equity can also be loaned out for immediate relief should the need arise in future situations.

Which leads to our final point—the opportunity physicians and other high earners have to invest in a secondary home.

As this article from CNN highlights, secondary homes are one of the most unusual trends to come from life during a pandemic. For professionals in the city, a home away from densely populated areas is a way to stay safe. Remote workers have found that secondary houses give them ample space to set up a professional working environment while away from the office. And others have used their time away from the office to renovate a property for vacation rentals.

If you are considering a second home as an investment for any of these reasons, be sure to understand the pros and cons of taking on this debt, particularly through a doctor loan.


Protecting Your Assets


Times of uncertainty require even greater due diligence when it comes to protecting your finances. That’s why you need to operate with a heightened sense of awareness as you make any decisions that involve your assets, income, or expenditures.

Here’s why it matters: physicians have notably been a primary target for online scammers in the past months, and the threat shows no signs of slowing down. Social distancing has forced doctors to communicate with patients and coworkers over email instead of in person, and scammers have capitalized on this trend by creating targeted phishing and identity theft campaigns.

Whether you work from home in a part-time or full-time capacity, experts recommend that doctors remain extra cautious to ensure that their financial information stays out of the wrong hands. This includes everything from generating unique, lengthy passwords for each of your accounts to avoiding any unusual links you receive in an email.

The increasing threat of financial attacks online for physicians also aligns with other scams that are centered around the coronavirus. Some of the most popular threats include “expedited stimulus checks” and fake loans for small businesses that are seeking financial assistance. These scammers rely on disinformation around current events, as well as desperation from consumers to be successful.

Make sure you are well aware of these risks in order to protect the privacy of your patients, your practice, your co-workers, and yourself. With this information on hand, you will be well-equipped to face any changes to your financial situation that come your way.



How have your personal finances been affected by COVID-19? Are you posititioned for a full recovery?


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4 thoughts on “How COVID-19 Has Impacted Doctors’ Personal Finances”

  1. Luckily I am no longer in private practice, having sold out to our local hospital 2 years ago. I cannot imaging going through this being a partner in a practice. I wonder if covid has swung the pendulum even more toward more physicians being employed. I haven’t heard that many practices have folded though because of covid.

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  3. This anonymous author is a good writer. I enjoyed the post, and feel like they hit on a lot of the big trends we’ve seen this year.

    The hardest thing for me as a surgeon has been the whiplash of restrictions going from one surge to the next. We went from cancelling almost all surgeries in the spring, to gradually doing more procedures than ever to catch up in the fall. Now, with the worst surge hitting us in time for the holidays, the brakes are quickly being pumped on elective procedures again. The logistics of cancelling and rescheduling hundreds of surgeries in my hospital is just an awful exercise and really disheartening.

    • Totally agree! Going through the same issues with elective surgeries as of today. Logistically difficult but thankfully already saving/living like a resident.

      Great piece!

  4. I think covid has accelerated the adoption of telemedicine for those practices that did not incorporate it before.

    I actually wrote a post on my experience of utilizing telemedicine for my daughter’s post op visit as well as using telemedicine personally for my follow up visit and have to say it is far more convenient for me. I prefer using it covid or not and I am sure the general public agrees.

    It was a tough time for me this year. I took a 60% paycut during the lockdown period that I believe was relaxed in July or August.

    Radiology volumes were so low during March and April that my partner and I incorporated a self furlough program so that we were making efficient use of our time

    Volume has now rebounded tremendously as people try to cram in the studies they missed during the height of the pandemic.


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