Why financial illiteracy is bad for doctors’ health

There are many studies about divorce, burnout, suicide, and substance abuse among medical providers. There are nowhere near as many about what personal financial stress causes for physicians. And when it comes to the prescription to relieve the burden—something to improve their financial literacy and decision-making—the doctor has largely been out.

Now a Johns Hopkins Carey Business School professor has been part of the first literature review aimed at understanding the relationship between doctors and personal financial literacy.

“Doctors have the potential to earn a great deal of money, but they also incur a great deal of debt from their education and from the costs of setting up a practice,” said Yuval Bar-Or, a professor of practice at Johns Hopkins Carey Business School who has written several books related to physician financial literacy.

The Association of American Medical Colleges reported that the median debt from medical school alone for the medical Class of 2021 was $200,000. Whether previous graduating doctors carried that median load or not, life goes on. Add homebuying, family needs, and other expenses, and it’s not hard to understand how debt balloons, even for a professional group generally believed to be well-off.

According to Bar-Or, doctors are not immune to poor financial decisions that have the same impact for their health as they do for the rest of us, namely stress and anxiety. Fortunately, the historical resistance to financial training in medical school is giving way, in the name of improving overall physician wellness.

Bar-Or collaborated with Sammy Zakaria, an associate professor of medicine at Johns Hopkins School of Medicine, and recent Carey graduate Joel Akachukwu Igu to conduct a systematic review of scientific literature on financial literacy and doctors. Their analysis was published in BMJ Open.

The researchers identified 49 articles that met their search criteria. Of these studies, 10 specifically described personal finance literacy curricula for medical students or graduate medical education trainees. Topics and outcomes varied, but all of the studies reported that their subjects were ill-prepared for making financial decisions, and very interested in financial literacy education.

“The literature reflects physician concerns about existing education mechanisms,” said Bar-Or. “Many times, the so-called education is offered by an insurance agent or someone else who's credentialed in finance but may not even have a fiduciary duty to their clients. Everybody knows they're trying to sell financial products and services, so why are they allowed access on campus? Why do we even open the door to let the foxes into the hen house? Medical programs need to have proper personal finance education budgets, comprehensive curricula, and a process for identifying credible financial instructors.”

So, Bar-Or and his colleagues outlined a 14-module personal finance curriculum, which included learning objectives and standardized curriculum that schools can implement to improve their medical students’ financial literacy. The modules cover topics such as formulating a basic financial plan, budgeting, understanding liabilities and debt, investing basics, and retirement planning.

Bar-Or adds that future research should focus on validating the effectiveness of financial training for physicians with the development of valid testing instruments, selection of credible instructors, and delivery formats.