Thought Experiment: Borrow a Direct Loan as soon as possible in order to secure the possibility of PSLF

12.02.19 // Finance

Back when the Republicans held the Presidency, Senate, and the House, there was constant bellyaching about when the government would shutter the PSLF program. As we’ve discussed previously, despite various proposals, any practical discussion that suggested an imminent demise was either unfounded, misguided, and/or primarily promoted by news organizations who need advertising eyeballs or by those who profit from private student loan refinancing.

If you’ve been reading before, you’ll know that any upcoming changes won’t affect old/current borrowers, who will be grandfathered. PSLF is in your master promissory note.

That said, a program cancellation would change things for those who would be considered new borrowers after its implementation. For example, a high school student planning on one day being a doctor could find their future plans derailed, as might a college student whose parents have generously funded their education.

With Democrats controlling the House and most Democrat contenders for presidency supporting drastically expanded loan forgiveness, it would seem the odds of a program cancellation in the short term are lower than many would have anticipated even just a year ago.

But let’s do a thought experiment:

If someone wants to guarantee the ability to be eligible for the PSLF program, they should take out a student loan of some kind as early as possible.

Why? Because changes only affect new borrowers, and anyone with a current loan is automatically an old/current borrower. Someone who has already borrowed money with the expectation that it can be forgiven and holding onto a master promissory note stating the same should be safe from any future changes.

So a freshman in college who doesn’t really need a loan but qualifies for financial aid could take out even a token loan just to open that eligibility door. If you want to go to graduate school, perhaps one should fill out the FAFSA no matter what, even if your parents were planning on taking care of college for you.

Caveat 1: I’m not really recommending anyone do anything. It’s just an illustration of the world we live in and the system we work with.

Caveat 2: There’s no guarantee it would work that way fully. In the event of a PSLF-closure, a borrower’s outstanding/current loans would certainly qualify, and past proposals would also nearly guarantee that the loans required to finish their current course of study would also qualify. But the loans required for a future graduate degree? That wouldn’t necessarily have to make it in. The goal of taking an early token loan would be to give yourself the best chance of locking in forgiveness while not costing anything meaningful from accruing interest.

Caveat 3: Sometimes being an old borrower isn’t so great. PAYE was an improved income-driven repayment plan compared with IBR and was specifically not made available to old borrowers when it was released. Taking out a loan earlier than you need might keep the PSLF doors open, but it could close others, especially since the PSLF doors don’t seem to be closing yet. Given how long it takes Congress to do anything, one can easily see a scenario where imminent program changes are telegraphed way in advance.

Caveat 4: With regards to the Caveat 3, I personally think it is unlikely given the optics of recent PSLF denials and how loan politics have changed for any good new programs to be withheld from old borrowers in the future.

ABR wins lawsuit first round

11.24.19 // Radiology

On November 18, a federal judge has granted the ABR’s motion to dismiss for the lawsuit filed this February. Judge Jorge Alonso was unconvinced by the argument that the ABR has illegally tied its MOC product to its initial certification product, agreeing with the ABR that the two things are really two parts of the same thing (despite the fact that for lifetime certificate holders…they’re not):

Ultimately ABR sells only one product: certification of radiologists as having ‘acquired the requisite standard of knowledge, skill and understanding essential’ to the practice of medicine in their particular specialty or subspecialty. This was once a one-stage process, and it is now a multi-stage process, but it does not follow that the certification process consists of separate products; now as ever, there is only one product.

You can read a quick summary from Radiology Business.

Ultimately, there is a wide gulf between the things that are unethical or morally repugnant and those that are unequivocally illegal such that a court will reliably provide a ruling that coordinates with common sense or layperson expectations.

With how dysfunctional our national legislative bodies have become, people have forgotten that the courts are supposed to be more of a last resort than a primary hope.

Across all critical issues, we can’t rely on appointed judges to make things right.

Residents Are Underpaid, But You Knew That

11.19.19 // Medicine

A handful of notable free tuition experiments aside, the combination of rising medical school costs, vocational pressures, life-quality issues, and reimbursement battles has clearly had a chilling effect on many lower-paying specialties and continues to funnel medical students into procedural fields and surgical subspecialties.

An individual student’s personal calculus aside, the broader question is still worth answering, particularly as doctor’s compensation is once again in the news:

Taking into account the whole picture including student loans, a delayed start in the workforce, and high hours—is medicine worth it?

Well, we’re not going to answer that question today.

But we are going to briefly discuss one of the financial downsides of becoming a practicing physician: residency. This is perhaps compounded even more now with the blurring “provider” divide, where midlevels like NPs are increasingly able to create a similar if not substantially broader practice to resident physicians while also being able to make adult financial progress (paying off loans, meaningfully saving for retirement) immediately after school (and can even change specialties with little friction!).

All of that is a massive, thorny issue. But for this short post, I’d just like to quickly share two interesting data points that vindicate all you residents out there frustrated with watching your loan balances balloon.

Funding is nice, but cheap labor is cheap labor

The first is from a (not new) paper by UC Berkeley’s Nicholas Roth titled “The Costs and Returns to Medical Education.” The paper looks at medical school and training as a combination of financial and opportunity costs and calculates the relative return for different fields (I discussed it at length here if you’re curious), but it has an interesting statistic toward the beginning.

After Congress passed the 1997 Balanced Budget Act, which capped government payments to hospitals for residents, hospitals added over 4,000 more residents than the government would support. This suggests that market forces are at work as hospitals try to hire residents until the marginal value of an additional resident is zero. It also suggests that hospitals profit from additional residents long after the point when our government stops funding resident education.

That’s fascinating because it dovetails perfectly with the narrative all residents believe that hospitals benefit from their cheap labor despite the ludicrous claims that it “costs more” to educate a trainee. (Right, because if that were the case, why ever hire a midlevel fresh out of school?)

The Residency Fire Sale

And if there was any further doubt, look no further than the recent Hahnemann bankruptcy fire sale for corroboration. When the hospital went under, they tried to sell their 570 residents slots as a tidy parcel to the highest bidder as if their residents were a commodity like office furniture. The winning bid was $55 million, meaning that even in an absurd market situation with a desperate seller, each resident was worth about $100k, not too far from what Medicare provides for each residency slot (again under the pretense that it costs about as much money extra to the institution to train a resident as they actually earn in salary).

Details Matter, But It’s Not Pretty

Of course, not all residents are created equal from a finance perspective. There are both intra-speciality and inter-specialty differences. While attending compensation is generally tied to the generated revenue, all residents of a given training level at an institution are paid the same amount. For an easy example, a radiology resident at a program that has 24/7 attending coverage provides much less bankable value than a resident who takes independent night call.

Of course, I see zero chance of this changing meaningfully in the near (or any?) future, but given the renewed political discussion of physician compensation and the growing role of non-physician providers, it’s worth pointing out that the reality on the ground (low trainee salaries, huge opportunity cost for additional training time) is a system construct that stakeholders should address when considering the future of medical training.

Parting Question

In the “non-profit” world of academic medicine, why do institutions need to profit from training doctors?

A Deep Dive into the Bylaws of the American Board of Radiology

11.09.19 // Radiology

In this post, we’re diving deep into the bylaws of the American Board of Radiology and picking out some choice quotations for perusal and discussion. Consider this part two of a two-part series (with the first being this enjoyable breakdown of the ABR’s tax returns).

You can download a word document of the ABR’s Bylaws in their entirety here. They were apparently last approved by a unanimous vote on October 20, 2017 (suggesting that the April 18, 2016 date on the current bylaws webpage is wrong).

The Party Line

For a bird’s eye view of what the ABR thinks the ABR is trying to do, look no further than Article II: Objectives and Purposes:

The objectives and purposes of this Corporation shall be as follows:
(a) To serve patients and the public by continuously promoting the competence of its diplomates;
(b) To improve the quality and safety of our disciplines through our requirements for primary and subspecialty certification;
(c) To create and conduct fair and valid examinations in our disciplines to evaluate accurately the qualifications of voluntary candidates for ABR certification;
(d) To issue certificates to qualified and competent candidates in the specialties and subspecialties of the ABR;
(e) To promote lifelong and continuous learning, professional growth, quality and competence through its MOC programs;
(f) To provide and administer programs for the Maintenance of Certification (MOC) of our diplomates;
(g) To promote professionalism within our disciplines;
(h) To establish and promote open and transparent multi-directional avenues of communication with our diplomates, medical societies, governmental and non-governmental agencies, and the public;
(i) To do and perform all things necessary or incidental to the foregoing objectives and purposes.

a) I think “promote” is probably the wrong verb. It suggests that the ABR serves patients or the public via marketing as opposed to something substantive. (Oh, I see what they did there.)

b), c), and d) are laudable goals that are unverified and hotly debated. e) is implausible. f) is factually undeniable. g) certainly not. h) transparency is not in the ABR’s vocabulary. Recent “multi-directional” communication has gone something like this:

ABR: Just trust us.
Everyone: Why would we?
ABR: Guys, we hear you, we are you.
Everyone: We don’t really see an empirical basis for that supposition.
ABR: Oh well. Worth a try. PS Your dues are due.

The Details

Section 4.3. Election of Governors. Nominees shall be solicited from the Board of Trustees and Board of Governors, and may be solicited from any appropriate professional organization. Professional organizations shall provide such nominations in writing. An affirmative vote of at least three-fourths (3/4ths) of the entire Board of Governors shall be necessary for the election of any nominee to the Board of Governors.

If you didn’t know, there are currently 8 Governors, and they basically run the show. Lincoln’s famous “team of rivals” approach this is not. The current people in power shall nominate their replacements and other organizations may, but the key for any hopeful member is making sure that you fit in with the cool kids, essentially guaranteeing that no one with substantially differing views would ever make it to the upper echelon.

Section 4.6. Conflicts of Interest. It is the policy of this Corporation that the legal duty of loyalty owed to this Corporation by a Governor serving on the Board of Governors of this Corporation requires the Governor to act in the best interests of this Corporation, even if discharging that duty requires the Governor to support actions that might be contrary to the views, interests, policies, or actions of another organization of which the Governor is a member, or to the discipline of which the Governor is a member. Consistent with a Governor’s duty of loyalty, a person serving as a Governor of this Corporation does not serve or act as the “representative” of any other organization, and his or her “constituency” as a Governor of this Corporation is solely this Corporation and is not any other organization or its members.

This is an impressive statement. Read it twice and digest.

The people who run the ABR and make strategic decisions are bound to serve only the ABR and to act only to benefit the ABR. No other constituency matters including the discipline of radiology itself. Essentially, any benefits to other groups or the diplomates should be coincidental. Formalized organizational input such as from the ACR? No. Opinions of program directors, residents, fellows? No. Best interests of the patients? No.

To me, this is the exact opposite of how a certification board should function. It should be a team of stakeholders representing all relevant interests and acting to better the field. That’s the only way to ensure that it can actually achieve its mission (at least as stated in Article II).

Section 4.9. Officers. The officers of this Corporation shall consist of a President, a President Elect, and a Secretary-Treasurer, each of whom shall be a member of the Board of Governors, and such officers as the Board of Governors from time to time may elect…

The head leadership can only be selected from within the ranks of the cabal.

Section 5.1. Board of Trustees. The Board of Governors shall create a Board of Trustees, a strategically selected body that advances the quality, relevance and effectiveness of the American Board of Radiology’s examinations and programs for Certification and Maintenance of Certification across all disciplines of Radiology. The Board of Trustees is responsible for making operational decisions, subject to review by the Board of Governors, including but not limited to, examination goals, format, content, assembly, delivery, scoring and feedback.

There are currently 18 Trustees. I’ll admit I’m naive here, but I’m not exactly sure why there are both a head-board and a separate under-board. This seems like people just passing on the hard operational work to a group of subordinates via mandate while they get to chill and make “strategic” decisions.

Section 5.3. Terms, Term Limits. All members of the Board of Trustees shall serve for the limited period provided. Individuals may be nominated by any member of the Board of Trustees, which may solicit appropriate professional organizations to provide candidates. An affirmative vote of at least three-fourths (3/4ths) of the entire Board of Trustees shall be necessary for selecting a nominee. All such nominations must be approved by the Board of Governors.

Continuing a trend, the current trustees nominate and elect their own replacements, but the Governors have veto power should any organization put forth an unacceptable candidate.

And how could that change, unless the ABR determined that becoming democratic served the best interests of the ABR itself? Anything else would demonstrate insufficient loyalty.

Section 6.1. Annual Meeting. There shall be an annual meeting of the Corporation held during each calendar year at a time and place to be determined by the President. The Board of Governors and the Board of Trustees will meet both separately and together at the annual meeting; the timing of combined meetings will be determined by the Board of Governors. Members of the Board of Governors may regularly attend the Board of Trustees meetings as determined by the President.

Apparently that place is Hawaii.

Section 6.2. Regular Meetings. Each Board may hold regular meetings at such place and time as shall be designated by the President. The Board shall transact such business as may properly be brought before its meetings.

Apparently that place is also Hawaii?

Section 6.4. Conduct of Meetings. Unless otherwise determined, all meetings of the Board of Governors or the Board of Trustees shall be conducted in accordance with Robert’s Rules of Order, Newly Revised. Every meeting of the Board of Governors shall be presided over by the President, or in the absence of the President, by the President Elect, or, in the absence of the President and the President Elect, by a Governor chosen by a majority of the Governors present.

Close your eyes and picture the lameness. Is there a second?

Section 7.2. Committees of the Board of Governors.
a) Budget and Finance Committee. The Secretary-Treasurer shall be assisted in his/her duties by a Budget and Finance Committee, which, in addition to the Secretary-Treasurer, shall consist of at least three Governors. The Secretary-Treasurer will serve as the chair of the committee. The duties of the committee shall include reviewing the annual budget, overseeing investments, recommending examination fees, reviewing personnel salaries and benefits and related matters as assigned by the Board of Governors.

What I would give to be a fly on the wall during this committee’s meetings.

b) Bylaws Committee. The Bylaws Committee shall be responsible for reviewing the Bylaws and recommending appropriate modifications in them to the Board of Governors. The Committee shall consist of three Governors, as well as a Chair appointed by the President. The Chair of the Board of Trustees shall serve on the Bylaws Committee.

I initially assumed that shady COI stuff was standard jargon, but apparently this document has its own committee.

h) Executive Compensation Committee. The Executive Compensation Committee will carry out the Board’s responsibilities for designing, managing and annually reviewing Executive compensation and the Executive compensation policy. This committee will consist of the President, President Elect, and at least one additional member from the Board of Governors appointed by the President. The President will chair the committee.

I love that the committee that handles executive compensation is chaired by the president and then attended by the president-elect and “at least one additional” presidential appointee. Good thing that a conflict of interest for the ABR is just when a Governor cares about something outside of the ABR.

Section 9.1. Revocation of a certificate or placing a diplomate on probation.

There are a bunch of reasons the ABR can revoke your certificate. They all seemed reasonable, and I’m not reprinting them here. I read them pretty carefully and was relieved that writing critical sarcastic posts on your personal website was not listed.

ARTICLE XIII Indemnification of Trustees, Officers and Others. The Board of Governors may exercise the full extent of the powers which this Corporation has under the laws of the District of Columbia, as such law exists from time to time, to indemnify members, Trustees, Governors, officers, examiners, employees, including the Executive Director, Associate Executive Directors, volunteers, and agents for expenses incurred by reason of the fact they are or were Trustees, Governors, officers, examiners, employees, including the Executive Director, Associate Executive Directors, volunteers, or agents of this Corporation. Such expenses shall include attorneys’ fees, judgments, fines, amounts paid in settlement, and amounts otherwise reasonably incurred. The Board of Governors may make advances against such expenses upon terms decided by it. The Board of Governors may exercise the full extent of the powers which the Corporation has under the laws of the District of Columbia, as such law exists from time to time, to purchase and maintain insurance against the risks above described, on behalf of its Trustees, Governors, officers, examiners, employees, including the Executive Director, Associate Executive Directors, volunteers, and agents.

Imdemnify is legalese for covering personal liability expenses, so this is saying that the ABR may cover fines, legal fees, settlements, etc that its brass could otherwise be accountable for due to their actions relating to their work for the ABR. The ABR’s got its own back.

While none of its members have been personally named in any suit that I know of, it remains in perfect irony that the inflated certification fees the ABR collects are absolutely funding the defense against a class-action lawsuit about those very same fees.

Summary

So those are the highlights.

That COI policy would make more sense for a Fortune 500 company, and the executive compensation “committee” sounds farcical.

Does this document really matter? Does it really guide the actions of the ABR leadership? I don’t know. But as with MOC, the issues are predominately ones of principle.

The ABR’s outreach to its constituents is composed mostly of attending radiology meetings where they don’t meaningfully address common concerns and releasing a newsletter that is 90% transparent propaganda. In their collective mind, the ABR knows what we want and is giving us more (from the recent BEAM newsletter):

Starting in November, publication frequency of The BEAM and several formatting and content enhancements will occur. We are embarking on a six-times-per-year schedule instead of three times per year to help us remain more current with important news…We’ll be including short write-ups about people who work for the ABR, so diplomates and candidates can get a better idea of who’s here to serve them. The first is on the Certification Services tam [sic].

Spell check is a rough mistress.

These core problems are almost certainly amplified by the ABR’s policy of self-selecting its leadership from…dedicated…volunteers. I estimate a 0% chance that anyone with radical ideas or a desire to change the status quo would be selected. And, unlike many professional societies, the ABR top brass aren’t exactly unpaid volunteers.

Conclusion

I suspect that the ABR is composed of smart, caring, and dedicated individuals who probably want to do the right thing. But as an organization, the blinders are on and groupthink reigns.

I suspect that–from within–the ABR feels misunderstood, that they are doing their best to carry out their mission in an imperfect world where there are no perfect tests and drawing sharp lines feels like a messy process.

But the ABR is not misunderstood.

Instead, it functions within a meticulously-crafted bubble with its own reality-distortion field, preventing its leadership from seeing where things went wrong and where they’re going.

What bugs me?

It’s the pettiness.

It’s a few doctors doing things on behalf of constituents without their input and against their wishes, flaunting their mandate, slinging meaningless slogans, and appearing to profit in transparent and frankly embarrassing ways.

As a profession, we can do better.

Guesting about PSLF on the Financial Residency Podcast

11.05.19 // Finance, Medicine

Listen to me and Ryan Inman of the excellent Financial Residency podcast nerd out about PSLF and why you should 1) be diligent and 2) ignore the clickbait/majority of what you read online.

Check it out.

I would normally give the disclaimer that I had a cold, but I have a four-year-old and now an infant in daycare, so I’m always either sick, recently sick, or about to be sick. Clearly my verbal tick of the day was “at the end of the day,” so mentally subtract that from your listening and it’s a great episode!

Dealing with Test Anxiety and Demoralization

10.25.19 // Medicine, Miscellany

For as long as I’ve been taking multiple choice question tests, I remember when I’d get a question wrong, a lot of the time I would say:

Oh wait, that doesn’t count, I really knew that one.

But the fact is that there’s more than one way to get a question wrong. Most people think of really being “wrong” as when they’re totally clueless, but that makes up a minority of cases. Many times you will actually know the learning point being tested even when you get the question itself wrong. You got the question wrong because you couldn’t link up the facts you know with how they’re requested through a question stem. Other times you went too fast or got played by a plausible alternative choice. Those are good reasons for why doing high-quality practice questions is a critical component of any exam prep: you need to continually pair up facts in your brain Rolodex with answers as framed on multiple-choice questions. It takes time, and there’s no shortcut.

One of the difficulties some of my former students had with studying through questions is that getting questions wrong is demoralizing. And if you’re using questions relatively early on in your developing mastery of the subject matter, you’re going to get a lot of questions wrong. I would encourage you to consider this bottom line: when you’re studying with any qbank, your goal isn’t really to get questions right; your goal is to learn. There’s almost as much to learn from the questions you answer correctly as the ones you get wrong. You need to see the information in its “native“ environment.

Demoralization and test-anxiety

Unfortunately, for many students, this process of demoralization and self-doubt feeds into test-anxiety. For high-stakes tests like the Step exams, that dread could easily ruin months if not years of your life. It’s a hard cycle to break.

One thing I believe (and I do mean believe, no science/data here) is that when it comes to performing on the big day, the more you care, the worse you do. If each time you’re not sure about an answer shakes your overall confidence, it’s going to be a very long test. Being blindsided by a question doesn’t make you an idiot. Derealization is a helpful skill, because dispassionate nonchalance is a better mindset than “this test determines my future.”

So, you need to start by not beating yourself up. Your specific goal of [insert high number here] is awesome and I hope you get it, but you need to know that goals are only helpful as a means of motivation. Not something to tie your entire self-worth into. When you check your performance and get demoralized, you are doing yourself a disservice. A friend’s performance, peoples’ posts on SDN—absolutely none of that matters.

When you get questions wrong, flag them and do them again. There are lots of reasons to get questions wrong and you need to approach the explanations as a chance to learn, not a chance to be disappointed.

I want to repeat that. The reason a high-quality qbank is such a good tool is twofold. 1) Your knowledge is only helpful (in this narrow artificial context) if it helps you answer a question. The best way to see how to apply it to a question is with a question. 2) The explanation teaches you both the key facts, additional competing/confounding information, and the context/test-taking/pearls/trends/etc.

A lot of people shortchange themselves on #2. They rush through with a focus on getting through them to get more volume instead of savoring the explanations. They get upset when they get a question wrong and don’t use it as a learning opportunity. You should almost want to get questions wrong because then it means you have an opportunity to improve, a potential blindspot to weed out. (Okay fine no one wants to get questions wrong). It’s depth, not breadth.

Emotional valence and overreading

The flip side is when people use that negative emotional valence from being wrong to overread the explanation. They take an exception and turn into a new rule. They generalize too much and try to apply something specific on one question as a generic teaching point to another question where it doesn’t apply (“but last time I guessed X and it was Y; this time it’s X, wtf!”). All of this comes from stress and self-doubt.

Remember, learning is a process. Stop paying so much attention to how you’re doing. Whether you do bad or good or your score changes with each practice exam doesn’t really matter except to help identify things to learn. This is how you’re going to study and you’re going to embrace it. You’re going to take the test one day and do your best on it. Agonizing over the data on the way is just self-flagellation.

As you get close to game day, you can switch to timed blocks to simulate the exam. Get into a groove. Find the confidence to go with your gut, not agonize, not get stressed by a long question stem, etc. If one particular thing seems like you’ll never learn it, then don’t. Your score on any exam you take in your whole life will never hinge on a single topic.

The most intimidating part of taking a high stakes exam like the MCAT or USMLE may be your nerves more than your fund of knowledge.

Reframing anxiety as excitement

During your dedicated review, one way to avoid burnout is to work on reframing your attitude from fear to excitement.

Anxiety is different then dread. If it was going to be a disaster, you would feel dread. The fact that you are anxious means there’s a chance it might go well.

Telling yourself that you’re calm or to calm down does not work. You aren’t calm, you can’t calm down. At least not before the event starts. Heightened awareness is a sympathetic response, it cannot simply be tamped down with a little wishful thinking. But that heightened response can be reappraised. When you feel something you don’t like, don’t fight it: re-label it. Consistently.

So.

You’re doing this so you can learn, and–before you know it–you’ll be done.

That is astoundingly exciting. It’s a huge milestone.

You need to study, do your best, and be proud of yourself.

Budget and law proposals don’t matter: PSLF will work for people who already have loans

10.08.19 // Finance

If you took out federal student loans after 2007, the master promissory note—the legal contract between you and the US government—had this buried in it:

A Public Service Loan Forgiveness (PSLF) program is also available. Under this program, we will forgive the remaining balance due on your eligible Direct Loan Program loans after you have made 120 payments on those loans (after October 1, 2007) under certain repayment plans while you are employed full-time in certain public service jobs. The required 120 payments do not have to be consecutive. Qualifying repayment plans include the REPAYE Plan, the PAYE Plan, the IBR Plan, the ICR Plan, and the Standard Repayment Plan with a 10-year repayment period.

That’s the part that makes your loan eligible for PSLF if you meet the requirements. You’ll notice there are no loan amount caps, needs testing, or other caveats. The program is in the fine print.

And this is precisely why every budget proposal from Obama (who wanted to cap the forgiven amount) and Trump (who wants to cancel the program) has specified that any change would affect new borrowers. (This is not to mention the variety of recent Democratic presidential candidate proposals to dramatically expand student loan forgiveness).

Who is a “new” borrower? Basically someone who borrows money after the law is created and doesn’t already have older loans. To illustrate how the feds have used this term in the past, look no further than the language in the MPN regarding the Pay As You Earn (PAYE) repayment plan.

The PAYE Plan is available only to new borrowers. You are a new borrower for the PAYE Plan if:

*(1)* You had no outstanding balance on a Direct Loan or a FFEL Program loan as of October 1, 2007, or you have no outstanding balance on a Direct Loan or a FFEL Program loan when you obtain a new loan on or after October 1, 2007, and

*(2)* You receive a disbursement of a Direct Subsidized Loan, Direct Unsubsidized Loan, or student Direct PLUS Loan (a Direct PLUS Loan made to a graduate or professional student) on or after October 1, 2011, or you receive a Direct Consolidation Loan based on an application received on or after October 1, 2011. However, you are not considered to be a new borrower for the PAYE Plan if the Direct Consolidation Loan you receive repays loans that would make you ineligible under part *(1)* of this definition.

Now, even the legal nuances may all be moot for at least the short term, because democrats have been more interested in expanding loan forgiveness than canceling it, and most of the gazillion of the current presidential candidates have been trying to promote free college. With Democrats controlling the house, the chances of PSLF being destroyed in the short term are pretty low. Congress couldn’t even get this done with republican majorities in the house, senate, and a sitting president.

Now, in a couple more years in when the forgiven amounts balloon, the issue may come to a more heated debate no matter who is in charge. Because the overall student loan situation, PSLF or not, is untenable, unsustainable, and rapidly robbing young Americans (and thus the future of our country) of their chance at economic prosperity. Something has got to give.

But to give you an idea of how not imminent this is, keep in mind the Republican congress passed a temporary expansion of the existing program to help people who didn’t read the fine print.

However, the long-term health of the program is irrelevant if you’re already in school. Because the changes, whenever they come, should not affect you.

Websites and news outlets love to play up PSLF-doom-stories because they make for great clickbait (and also encourage private refinancing referrals from which many of them profit). But the clear take-home message from both the MPN and political proposals is that it does not matter what happens to the program if you’ve already made the decision to borrow money for school based on the program’s existence. When people rely on a program, you can’t pull the rug out from underneath them (not just because it’s unfair, it’s actually illegal).

And, for the hyper-cynical among you, when Trump’s Department of Education tried to do so in a very limited fashion recently (by retroactively denying some lawyers who fell into a gray zone of non-501(c)(3) nonprofits that must be approved on a case-by-case basis), the courts shut them down pretty robustly. You can’t change the rules of the game if people are already playing.

Goals and Consequences of Private Equity

10.05.19 // Miscellany

A couple of interesting reads from Matt Stoller’s BIG newsletter about private equity. Given the current flood of PE group buyouts and market consolidation in healthcare, it’s not hard to draw parallels between radiology practices ten years from now and what happened to Toys R Us in 2018 or to identify the obvious issues that arise over the long term when the frontline and c-suite have zero overlap.

From “Why Private Equity Should Not Exist”

The goal in PE isn’t to create or to make a company more efficient, it is to find legal loopholes that allow the organizers of the fund to maximize their return and shift the risk to someone else, as quickly as possible.

From “WeWork and Counterfeit Capitalism”

Across the West, the basic problem of a corrupted productive process is becoming a quiet crisis. The reason is simple. The people that do the work in organizations are increasingly excluded from the decision-making about the work. That is why Boeing is losing its ability to build planes, why we can’t build infrastructure, and why New York City is on the verge of disaster.

ABR OLA MOC: The First-Year Experience

10.01.19 // Radiology

2019 was the initial offering of ABR’s MOC of the future: Online Longitudinal Assessment (OLA). I wrote about it earlier this year, but to recap: All Diagnostic Radiology ABR diplomates including those fresh off their Certifying Exam victory lap were immediately thrust into the new paradigm. This amounts to answering a whopping 52 multiple choice questions over the course of the calendar year in whatever subspecialty composition you prefer. Questions are released 2 per week and expire after a month.

It’s…fine? Sorta I guess?

The website works (mostly), and the questions are questions (undeniable). Some are pretty good, some certainly less so. People on the internet grumble about content relevance more than I personally would, but then again the minute I got a lame low-yield Core-style GI fluoro question I switched to 100% neuroradiology.

The ABR hasn’t released the passing thresholds yet, which is the most interesting facet of the whole ordeal: recall that the Core and Certifying Exams are “criterion-referenced” by magical Angoff committees that can infallibly determine what a “minimally component” radiologist can do. The ABR just doesn’t seem to have that same confidence when it comes to MOC, presumably because they have no idea how many people would fail if they had logically employed that exact same Angoff method, and failing an unknown number of already dissenting practicing radiologists is a much bigger deal than embarrassing some more trainees.

Now before you say that each diplomate needs to hit 200+ questions to hit the psychometric validity threshold, the ABR could still tell people if they were on track to pass or fail based on their current performance. There are apparently plans to release preliminary feedback soon (which may do just that now that there is some real-world data to calibrate with), but all of us will need to do another few years of OLA to learn if we’re truly maintaining the magic.

In case you were wondering, I did get one question wrong (the software buries additional images in tabs you have to click through; I kept forgetting, though it only burned me the one time).

Drip-Feeding

There are no secrets as to why the ABR chose to release two questions per week that subsequently expire a month later. I finished my required questions in August, less than a year from when I took (and presumably destroyed) the Certifying Exam (but we’ll never know because they don’t release scores for that exam).

What I can tell you is that I spent approximately one hour satisfying the OLA requirements for the year. Without the forced drip-feeding, I could’ve accomplished the entire process during a single generous lunch break.

Some of you reading may be thinking, hey, that’s not so bad. And you’re right, the process is relatively painless. I didn’t learn anything, but at least it didn’t take a lot of my time.

Ultimately, that’s also what makes MOC a meaningless box-checking endeavor and blatant money grab.

The argument that something isn’t stupid, bad, useless, or wrongheaded as long as it doesn’t suck is spurious. Just because it could be worse doesn’t mean that it shouldn’t be better.

And the fact that many doctors are scared that these unelected unaccountable pseudo-governing organizations will punish any dissent by making tests harder and MOC more arduous is toxic and should not be accepted. We shouldn’t treat the relative ease of a profit-seeking exercise as a thrown bone from the shadow lords that can be taken away at any time or a secret to keep quiet so the “public” doesn’t find out.

The Anti-MOC Wave

I am actually not really part of the large and growing cohort of physicians adamantly opposed to any third-party validation of demonstrable skill or the mere idea of a certification-granting organization that can reliably establish minimal competence. In fact, if board certification wasn’t a de facto requirement in many contexts (and thus akin to licensure itself), I wouldn’t even mind if the supposed threshold was greater than minimal competence.

The ABMS was founded in 1933. The ABR was founded in 1934. We’re still waiting on evidence that anything these people do means anything. If the intellectual underpinnings of initial certification are up for debate, then the “maintenance” of said certification is doubly so (hence the lawsuit).

The new system may be no worse than the 10-year exam it replaced; it would seem to me that it’s likely significantly less hassle. Less studying, less travel, less time, less effort, and more relevant (in that you can exclude broad categories of radiology irrelevant to your practice). However, cumbersomeness (or lack thereof) is not a component of psychometric validity.

A lack of rigor may serve as a salve for diplomates injured by losing out on years of rightfully-earned respite after a recently passed 10-year exam, but it doesn’t change the fact that gradually adding strata of multiple-choice questions on a foundation of more multiple-choice questions creates a weak structure that teeters in the winds of change.

PSLF is also a partial federal match for pretax retirement contributions

09.24.19 // Finance

For those who qualify, PSLF can make an incredible difference in your long-term financial health by wiping away your student loans well before and for less money then you may be able to accomplish for yourself.

Due to the way income-driven repayment plan monthly payments are calculated, PSLF also acts as a government subsidy on your pretax retirement contributions. If you are currently using an income-driven repayment plan, every dollar you contribute this year to a pretax account will not only save you money on taxes this year (at your marginal tax rate) but will also “lower” your income for the year and then save you ten cents the following year.

Why?

Because IDR loan payments are calculated according to your discretionary income. Less income, smaller payments. For the two most common plans for recent borrowers, PAYE and REPAYE, it’s 10% (for borrowers on the old version of IBR, 15%).

For loans eventually forgiven via the PSLF program, every single dollar less you spend on your loans during the 10 years of repayment is another dollar that you save. This amounts to a partial federal match on your 401(k)/403(b)/traditional IRA contributions and an automatic 10% return on your investment.

Theoretically, the relatively low income of a resident is generally ideal for making post-tax Roth contributions (either to a Roth 401(k)/403(b) or Roth IRA). This is because doctors are felt to likely want to retire on more annual “income” than they earn as a resident, so that paying taxes now in a lower bracket is better than paying taxes later when in a higher bracket (not to mention the possibility that tax brackets may be higher across the board in the future). That said, a life in retirement without constant car payments, a mortgage, or student loans would cost far less than a similar lifestyle as a young professional. The bonus “match” is a reason to consider making pretax contributions against the more conventional wisdom.

Note that even without PSLF, pretax contributions still reduce monthly payments. For people actually paying off their loans, lower payments generally aren’t a good thing (just more money spent in the long term on interest), but in the setting of REPAYE and negative amortization, the lower payments would also mean more unpaid interest and thus more unpaid interest waived via the 50% unpaid interest subsidy and a lower effective interest rate.

For example, if you were somehow able to max out your personal contribution ($19,000 in 2019), then you would reduce your payments by $1,900 the following year in PAYE/REPAYE (or $2850 in IBR). That’s $158 per month. And that kind of savings over 10 years definitely adds up.

Extending $0 payments

Things can get really creative. If you were lucky enough to have a working spouse who earns enough to pay for your family’s living expenses (or are so hyper frugal that you live in the call room and eat saltine crackers pilfered from the ER for the majority of your meals), you could even pull a clever trick and zero out your loan payments for your first two years of residency. How?

Well, if you read my beloved (free) book, this helpful post about consolidating your loans after graduation, or remember the bit about this from a few paragraphs ago, you’d recall that payments under an IDR plan are calculated as 10% of your discretionary income based on last year‘s taxes under PAYE/REPAYE. A graduating medical student / new intern generally made little to no money the prior year and can secure zero dollar monthly payments for their intern year that nonetheless still qualify for PSLF.

Now here is where the retirement contribution component comes in. Normally, a second-year resident who consolidated after graduation will make payments based on a tax return that combines the last half of their fourth year of medical school and the first half of their internship. This means that it essentially based on a half year of income, say $25-30k instead of $50-60k.

Discretionary income takes your adjusted gross income and subtracts 150% of the poverty line. So PAYE = 10% (AGI – 150% x Poverty Line) / 12. For example, in the contiguous 48 states in 2019, the poverty line for a single person is $12,490. As a practical matter, this means that a single borrower must make around $19k per year in order to have a non-zero payment. Therefore, if you can put away enough money in the first half of your intern year to reduce your gross income to the poverty line, then your payments the following year will also be zero dollars.

(Note: it’s actually probably better to have a token payment of a few dollars so that there is an easier paper trail of payments for PSLF as well as no chance of your servicer not applying the 0.25% interest rate reduction for setting up auto-pay).

Roth conversions can be a useful hedge

Consider a Roth conversion to be a hedge. Now if a light bulb just went off and you’re thinking you could place money in a pretax 403b/401k to get the income-lowering benefits for IDR/PSLF purposes and then immediately convert that money to Roth in order to take long-term advantage of their low current income bracket, that’s not how it works. The IRS treats the Roth conversion amount as income for your taxes, so it undoes the income lowering.

But while in REPAYE, you could make pretax contributions during your early residency years as we discussed to get the lowest effective rate possible. Then, during your final training year—if you now know you’re not going for PSLF and have enough money saved up—do a Roth conversion and pay the taxes at your low resident income bracket before you become an attending. A senior resident and an intern are in the same tax bracket unless a lot of moonlighting is taking place, so you don’t lose money that way due to higher marginal taxes. In this setting, you’d likely follow this with a student loan private refinance, so the increased AGI for the following year wouldn’t matter.

Take Home

So, in addition to providing uncapped tax-free loan forgiveness, don’t forget that PSLF also functions as a government subsidy on your retirement accounts as well.