Dr. Josh Daily, MD – The Financial Blind Spot in Medicine

Dr. Josh Daily joins Dr. Michael Jerkins for a candid conversation about a quiet crisis in medicine—one hiding in plain sight on every trainee’s loan statement and every attending’s pay stub. As a pediatric cardiologist, program director, and co-director of a medical student course on financial essentials for physicians, Dr. Daily has a clear view of why only 9% of doctors say they feel extremely confident managing their finances—and why that number, troubling as it is, makes complete sense given how little financial training physicians actually receive.

Dr. Daily walks through the tools doctors are rarely given but desperately need: how to think about net present value when your debt looks bigger than your starting salary, why the timing of promotion can shape lifetime earnings more than the specialty you choose, and how recent federal loan caps of $200,000 could quietly reshape who gets to become a doctor in the first place.

The episode also takes on the harder cultural questions underneath the numbers: What happens when “medicine as a calling” becomes the language used to justify being underpaid and overworked? Why is the pay gap between pediatric and adult subspecialties widening at exactly the level where trainees decide their futures? And when does additional training actually pay off—financially and otherwise?

Throughout the conversation, one truth anchors the discussion: financial literacy is not the opposite of a meaningful medical career—it is what protects it. Understanding the math is how physicians stay in medicine, stay whole, and stay free to practice the way they always intended.

Here are five takeaways from the conversation with Dr. Josh Daily:

1. Financial Confidence and Debt Management

The survey reveals a significant gap in financial confidence among doctors, with only 9% feeling extremely confident. Most prioritize paying off debt, particularly student loans, over other financial goals. This underscores the importance of integrating financial education into medical training to equip doctors with the skills needed to manage their finances effectively.

2. Impact of Promotion Timing on Earnings

Dr. Daily highlights that the timing of promotions can have a profound impact on a physician’s lifetime earnings, sometimes outweighing the choice of specialty. Early promotions can lead to substantial salary increases, making it crucial for doctors to understand and navigate the promotion process strategically.

3. Changes in Student Loan Policies

The introduction of a $200,000 cap on federal student loans may push students towards private lenders, potentially limiting access to medical education for those without financial means. This change could affect the diversity of the medical workforce and influence career decisions, as students weigh the financial risks of pursuing a medical degree.

4. Balancing Medicine as a Calling and Career

Viewing medicine solely as a calling can lead to exploitation and burnout, as doctors may prioritize patient care over personal well-being. Dr. Daily advocates for a balanced approach, recognizing the importance of both the calling and career aspects of medicine to maintain a sustainable and fulfilling professional life.

5. Pediatric vs. Adult Specialty Pay Gap

The growing pay gap between pediatric and adult specialties, particularly at the assistant professor level, may discourage trainees from entering pediatric fields. This financial disparity highlights the need for systemic changes to ensure that pediatric specialties remain attractive and viable career options for new doctors.

Transcript

Dr. Michael Jerkins: Only 9% of doctors surveyed said they feel extremely confident managing their own finances. And 79% said paying off debt is their number one financial priority right now — not retirement, not buying a house. It’s the debt.

MJ: Welcome back to another episode of The Podcast for Doctors (By Doctors). I’m Dr. Michael Jerkins, joined by a special guest today. We’re joined by someone who’s actually been on the show before, Dr. Josh Daily. He is a practicing pediatric cardiologist at Arkansas Children’s Hospital and the University of Arkansas for Medical Sciences, where he serves as Program Director for the Pediatric Cardiology Fellowship. He also co-directs a medical student course — which is great, by the way — Personal and Professional Financial Essentials for Physicians. I’m not sure what the acronym is, but I’m sure it’s catchy.

That course equips fourth-year medical students with the essential knowledge and skills to manage their financial futures. Beyond the classroom, Dr. Daily has been leading a body of research using net present value analysis to model the lifetime financial implications of physician career choices, which is very cool. He looks at everything from how promotion timing affects earnings to whether an extra fellowship year actually pays off. His work has been published in journals including JAMA Network Open, Pediatrics, and the Annals of Thoracic Surgery. It’s the kind of research that really makes you rethink the questions we’ve been asking about money and medicine, which is incredibly helpful.

Dr. Daily, welcome back to the podcast.

Dr. Josh Daily: Thanks, Michael. It’s always a pleasure to be here.

MJ: Seems like you’ve been a bit busy, based on that introduction.

JD: I have. I wear a lot of hats, and that’s one of the things I really enjoy about my job. Clinical practice is a big part of what I do, but it’s only one part of it. I get to do a lot of different things, and I think that’s one of the unique selling points of a career in academic medicine, which I thoroughly enjoy.

MJ: Yeah, I think we’ve talked about this a lot on the podcast, but doctors have a lot of lanes we can go down. It’s not just clinical medicine — there are lots of ways we can help the community and help our fellow healthcare providers and physicians.

As you know, we at Panacea recently did a survey of physicians, dentists, veterinarians, and those in training to better understand how they feel about their personal finances. As you know, Josh, it’s not always a topic doctors openly talk about. So we wanted to give people the ability to respond anonymously.

A couple of interesting stats stood out to me, and I’d love to hear your reaction. Only 9% of doctors surveyed said they feel extremely confident managing their own finances. That means 91% don’t feel extremely confident. Even more interesting, 71% rated their confidence at a three or below on a five-point scale.

Another big finding: 79% of those doctors said paying off debt is their number one financial priority right now. Not retirement. Not buying a house. It’s debt. Does any of that surprise you?

JD: No. I’m actually encouraged by the numbers regarding confidence in managing finances because I think they appropriately reflect the skill level I observe among physicians day in and day out when it comes to finance.

The most dangerous combination is low knowledge and low skill paired with very high confidence. That certainly exists in some people, but at least among the respondents in your survey, it suggests the vast majority have low confidence in their financial skill set. And honestly, I think that’s appropriate given that most physicians never receive formal financial training.

Then we’re thrust into the market after residency or fellowship and expected to figure things out while juggling a busy clinical schedule. So that part doesn’t surprise me.

MJ: A healthy balance between confidence and competence is probably a good thing.

Another thing that stood out is how much stress doctors feel around finances, with debt being overwhelmingly the number one priority. In fact, 88% of respondents said student loans were both their largest source of debt and their biggest concern related to debt.

Obviously, I graduated with a lot of debt, and I think you had a decent amount too. Does that 88% figure feel normal to you?

JD: It doesn’t surprise me, especially when you look at the demographics of the respondents, which skew younger. If you’re surveying trainees and recent residency or fellowship graduates, that lines up with what I see every day.

If the survey had included more respondents in their 40s, 50s, 60s, or retirees, other financial concerns probably would have risen to the top. But for newer physicians, you’re often dealing with a relatively modest income while carrying debt that significantly exceeds it.

People naturally compare their debt to what they’re currently earning or to their overall net worth, which is often negative at that stage. That can make the debt feel insurmountable.

Then you add in all the uncertainty surrounding student loans — changing political landscapes, questions about forgiveness programs, fluctuating interest rates. When you combine uncertainty with a very large number, it fuels fear.

MJ: Yeah, especially during transitions into residency or fellowship, you haven’t really had to actively manage those loans before.

Then when you move into practice, you suddenly face all these new decisions: Do you pay more than the minimum? Do you switch repayment plans? Do you refinance? There are all these decision points that didn’t really exist in the previous stage of training.

I’m curious because your work focuses on net present value and these major career decisions physicians make. Walk us through how you think about physician debt compared to lifetime earnings.

JD: That’s a great question. The tendency is to simply add up all of someone’s lifetime earnings and compare that to debt today, but that’s not really an apples-to-apples comparison because of the time value of money.

A thousand dollars today is worth far more than a thousand dollars 10 or 20 years from now. So you have to account for that. One way to do it is through net present value analysis, where future dollars are discounted back to today’s value.

For example, I can look at the lifetime earnings of a pediatric cardiologist and discount those earnings into a lump sum in today’s dollars. In my case, depending on the assumptions used, that’s probably somewhere between six and eight million dollars in today’s value.

When you compare that to $200,000 in debt, the debt is dwarfed by lifetime earnings. But most people don’t intuitively think that way. Instead, we anchor on starting salaries.

So if a brand-new pediatric cardiologist earns $230,000 or $240,000 a year but has $300,000 or $400,000 in debt, that becomes the emotional comparison point. Even though, over the course of a full career, the debt is relatively small compared to total lifetime earnings.

There are actually other variables that have a greater financial impact than student loan debt.

MJ: It’s tough too because people compare the path they chose to what could have been if they had gone another direction. You wonder, “What if I’d chosen another career path? Would I be further ahead financially?”

We actually had a respondent in the survey — an orthopedic surgeon — say, “I like what I do, but I could be so much further ahead financially had I chosen another path.”

That’s orthopedic surgery, one of the highest-paying specialties in medicine. How would you respond to someone thinking that way?

JD: First, I’d ask what they’re comparing themselves to. Are they comparing themselves to a college friend who became an engineer? Someone who started a successful company? Someone they see on social media with a huge net worth in their twenties?

Those comparisons fuel the “grass is greener” mentality.

When you actually look at the numbers, physicians do extremely well financially — especially orthopedic surgeons.

One thing I love doing with fourth-year medical students is showing them real income data before they transition into residency. Many feel frustrated by resident salaries and say they don’t earn enough to save. But then you show them that the median full-time worker in the U.S. earns around $63,000 a year, and the median household income is roughly $83,000.

Residents typically earn salaries in the 60s. And every full-time physician after training earns significantly more than that.

So objectively, physicians do very well. The issue is often comparison.

If you compare yourself to the rare person who became wildly wealthy at a young age, you’re comparing yourself to an outlier. That’s survivorship bias. You see the tech founder worth hundreds of millions, but you don’t see the countless people who tried similar paths and failed.

One of the wonderful things about medicine is that while you probably won’t make hundreds of millions of dollars, you’re almost guaranteed a good income as long as you don’t do something ridiculous.

Every physician who works full-time earns above the median income in America. You can live a very good life with that. The downside risk in medicine is incredibly low compared to many other career paths.

If you’re 23 years old deciding between medicine and another industry, the odds of consistently earning over six figures are dramatically higher in medicine. Once you get into residency, it’s almost impossible to fail out unless you do something truly ridiculous. And once you finish training, you’re very likely to earn a stable, high income.

I think many physicians underestimate how valuable that stability really is.

MJ: The completion rates are incredibly high too — over 99% of people who enter residency finish it.

One thing that stood out from the resident responses in the survey was what they said they needed most. One pediatric resident specifically said they wanted more financial literacy resources for resident doctors.

What I appreciate about that response is the self-awareness. They recognized, “I know there’s a lot I don’t know.”

At Panacea, we can actually help with that. We have a large financial education resource library — including some of your work, Dr. Daily — and we’ll make sure to link it in this episode.

But in my experience, most residents are so focused on surviving training and building clinical skills that they don’t even realize what financial knowledge they’re missing. They assume they’ll figure it out later, but often that “later” never really comes.

I’m curious what you see among residents and fellows.

JD: My experience matches what you described. I applaud that resident for recognizing the need for financial education, but I don’t think that reflects the experience of most residents.

Most are simply working hard and believing that if they can just get through residency and fellowship, they’ll suddenly have all this extra time available to focus on other things. So they defer everything — saving for retirement, paying off student loans, even learning the basics about finances.

But when you actually look at the data around burnout and physician wellness, this expectation that life dramatically improves after training doesn’t fully materialize. Many junior attendings still work very long hours — in some cases, schedules that look very similar to residency, especially as resident work hours have come down over time.

Then you add all the responsibilities that people don’t fully anticipate. Professionally, that may include things like owning a practice. Personally, it’s often marriage, kids, multiple kids, and life simply gets busy.

I certainly didn’t experience this sudden abundance of free time once I became an attending, and I don’t think most physicians do either. If you can’t prioritize financial learning during residency, you’ll probably struggle to prioritize it later as an attending too. You just have to intentionally make it a priority.

MJ: I agree with that, but how do you address the dentists in the audience whose schedules may look a little different on average? Most dentists and dental specialists I know work four-day weeks, and maybe the fifth day is administrative work or something similar. Their schedules may actually feel more like, “I finally made it.” How do you frame that for our dental colleagues?

JD: Well, first, I don’t have as much firsthand experience in dentistry, so I’ll defer somewhat to your expertise there.

But I do think the transition from training into your first job often establishes the trajectory for your life. If you immediately increase your spending to match your new income, work four days a week, and spend your extra time focused on consumption or lifestyle upgrades, while never intentionally building financial literacy or learning the basics of budgeting, then you’re probably not going to suddenly develop those habits later.

That transition period is incredibly important because times of transition are naturally ripe for change. Even behavioral science supports the idea that transitions are powerful moments to establish long-term habits.

So I suspect dentists absolutely have that same opportunity when they finish training and begin practice.

MJ: I was actually at a dental school yesterday speaking with dental students, and it reminded me a lot of the resident situation we just talked about. They’re trying to survive, develop clinical skills, and move forward. The assumption is that one day they’ll eventually figure out the student loan side of things.

But the amount of knowledge in the room around repayment programs and financial planning was almost nonexistent. And I’m not criticizing them at all — they’re busy learning to become clinicians.

There’s just a massive gap between where they are in training and what they’ll need to know once they’re practicing and making major financial decisions.

And you and I have talked about this before, but I even mentioned it to the students yesterday: how many dentists do you know who look broke? Most don’t. They often drive nice cars, live in nice homes, and appear financially successful on the surface.

But does that mean their financial life is actually healthy? Not necessarily. We make enough money in healthcare to make poor financial decisions and still appear successful externally. But if you looked at retirement accounts or long-term savings, the story might be very different.

JD: I think that’s true not just for dentists, but for wealthy Americans in general.

There’s a great book called The Millionaire Next Door that explored who wealthy people in America actually are versus who we think they are.

The reality is that the people who spend the most money are often not the people who’ve accumulated the most wealth. Frequently, it’s the person next door driving a 10-year-old Toyota Camry who has tremendous wealth.

It’s not always the person driving luxury cars, living in a massive home, and constantly taking extravagant vacations. Many people who look wealthy actually have very little wealth.

MJ: And just to clarify, I wasn’t saying that’s unique to dentists. Physicians and veterinarians absolutely fall into that category too.

We’ve talked about this on the podcast before, and it comes from The Psychology of Money — not my original idea — but the concept that real wealth is the ability to control your time.

If you’re constantly living in debt and trying to keep up with other people through consumption, you’re not really creating freedom or control over your life.

I want to transition a little because we’ve talked about how stressful debt can be, how stressful financial wellness can be, and how stressful medical training is. Yet at the same time, when you look at the Match, we just had a record number of residency applicants on the medical side — over 53,000 applicants.

So despite the financial pressure, concerns about reimbursement, and rising debt, more people than ever are trying to enter medicine. What do you make of that?

JD: I think there are several factors contributing to that.

First, there are simply more medical students in the United States than ever before. A lot of new medical schools have opened, which naturally increases demand for residency positions.

Second, a large percentage of applicants are international medical graduates who may have opportunities for a significantly better life and career in the United States. So there’s strong motivation there as well.

But beyond that, medicine still offers a path to a very good life. Physicians often focus on the negatives — not earning as much as we think we should, seeing too many patients, administrative burdens — but at the end of the day, we still earn strong incomes and do meaningful work.

There’s enormous demand among people in their twenties and thirties for both of those things: stable, high income and meaningful work. And there really aren’t many fields where those two overlap the way they do in medicine.

MJ: That’s interesting because these conversations are often framed as, “Is medicine a calling or just a career?” Especially among older generations of physicians, there’s sometimes criticism that younger physicians don’t see medicine as a calling anymore.

But what I hear you saying is that maybe it’s not either-or. Maybe it’s both.

JD: Yeah, and I actually think it’s helpful to step back and think about three different lenses people use when viewing work: job, career, and calling.

A job is something temporary — like a summer job when you were 16. For me, it was being a lifeguard at the neighborhood pool. You do it for a short period of time, and the main goal is earning money.

A career is something longer term. It has growth, advancement, and longevity. But you may not necessarily find deep meaning in it.

A calling is work that deeply motivates you internally. It feels meaningful, purposeful, and connected to serving others in some way beyond yourself.

The tendency is to say, “Everyone should adopt a calling mentality.” But I actually don’t think fully embracing any one category is entirely healthy.

There are downsides to each mindset. For example, physicians who completely adopt a calling mentality can set themselves up to be taken advantage of. Hospital administrators know they’ll sacrifice personal time, family time, and boundaries because they feel morally obligated to always say yes.

That can absolutely contribute to burnout and damaged relationships at home. There are plenty of children of physicians who deeply resented how much medicine consumed their parents’ lives.

On the other hand, some physicians approach medicine with more of a job mentality — locums work is a classic example. You exchange a specific set of skills for a specific amount of money and time.

Others may approach it primarily as a career.

Personally, I think the healthiest approach is recognizing the benefits and limitations of all three. For me, calling probably still predominates, but not to the point where your entire identity depends on being a doctor.

That’s another danger of the calling mentality. If your identity is completely tied to medicine, then retirement, disability, or career disruption can become emotionally devastating.

Having multiple aspects of your identity — family, hobbies, friendships, faith, community — creates stability and resilience. I think it’s healthiest to bring all three perspectives together as you think about your work and your life.

MJ: Yeah, and eventually there’s a price point where people won’t pursue a calling anymore, right? I don’t know exactly where that threshold is, but things are about to become more expensive for trainees.

I want to pivot a bit because, as most people know, with the One Big Beautiful Bill Act, there were major changes to federal student loan policy. Medical, dental, and veterinary students entering school this July and August will no longer have access to Grad PLUS loans.

What that means is students can borrow up to $50,000 annually from the federal government, with a total cap of $200,000. The problem is that not all medical, dental, or veterinary schools cost only $200,000. Many actually cost $300,000 to $400,000 or more.

So in my estimation, probably around half of borrowers entering medical, dental, or veterinary school will need to turn to private lenders because they’ll max out their federal loans at $50,000 per year and still need additional funding.

When you first heard about this new cap, what was your reaction?

JD: Honestly, a lot of confusion and uncertainty.

Thankfully, I no longer have student loan debt, so there wasn’t the same level of personal fear that I probably would’ve felt had I been about to start medical school. If I were entering school under these new rules, I think I absolutely would have been anxious.

But from where I sit now, I also recognize that there’s still a lot of uncertainty about how all of this will actually play out. Whenever there’s a major policy change, the headlines tend to catastrophize and focus on worst-case scenarios.

Now, we absolutely need to take this seriously, but it may not end up being quite as catastrophic as people fear.

Companies like Panacea Financial and others may recognize what we discussed earlier: if you get into residency, you’re generally a very safe financial bet. Physicians, dentists, and veterinarians tend to earn stable incomes over time.

So it’s possible that private lenders step in to help fill some of that gap with reasonable lending options. It’s also possible the political landscape changes again in the future. I’ve learned over time that many things I expected to happen didn’t, and other unexpected things did.

So we’ll see. It could absolutely become a major issue, but my suspicion is that while it will matter, it may not significantly reduce the number of students pursuing medicine, dentistry, or veterinary medicine. But I could certainly be wrong.

MJ: Yeah, and I think that could very well be true.

Internally, we estimate there may be around 14% to 15% of first-year medical students who will need private loans but may not qualify because they don’t yet have a well-developed credit history. They’re young and simply haven’t had enough time to establish credit.

That creates a real concern because if those students can’t secure financing, you could theoretically end up with empty seats that eventually get filled by students who don’t need loans at all.

And then the downstream question becomes: Are we unintentionally making medicine even less accessible to students from lower-income backgrounds? That has major implications for workforce diversity and representation.

One quote from our survey really stood out to me. A physician respondent said:

“I accepted the debt burden when I started medical school because I knew I had repayment options like IBR and PSLF. But if I were forced to take out six figures of private student loans, that would be a significant barrier, and I’m not sure I would take that risk.”

That’s really the crux of the issue. It’s not just the debt amount itself — it’s also the flexibility and protections tied to federal repayment programs that students may lose access to.

I’m very curious to see how this affects people after residency down the line.

JD: Yeah, I honestly don’t know exactly how this will shake out, but there are some very significant implications here — especially around workforce diversity, like you mentioned.

I think these changes deserve serious thoughtfulness and careful consideration, rather than arbitrary policy shifts that sometimes seem to happen without fully considering long-term consequences.

MJ: Yeah, and I don’t want this conversation to sound entirely negative or doom-and-gloom.

So if you were talking to a pre-med, pre-dental, or pre-veterinary student who’s about to start school this fall, what practical advice would you give them as they face these new federal loan caps?

JD: Are you referring specifically to students who will likely need to borrow beyond the federal cap?

MJ: Exactly. Students who are staring at tuition bills that will require borrowing more than the new $50,000 annual limit.

JD: First, I’d encourage them not to panic.

I think it’s unlikely that a student would suddenly start medical school and then find themselves with no viable way to continue paying for it. There are too many stakeholders involved — including the schools themselves — who don’t want students dropping out halfway through training.

Even if institutions are motivated partly by self-interest, there are still strong incentives for systems and lenders to find ways to keep students moving forward.

And I’d also remind students that if you successfully complete medical school and residency, you’re very likely to earn a substantial income over your lifetime.

Now, if your expectation is to immediately live like a stereotypically wealthy doctor and spend heavily on consumption, then yes, you may feel frustrated. But if you maintain reasonable expectations, even a larger student loan burden — including private loans — can still be manageable.

You can still pay off that debt, have a fulfilling career, and build a great life.

MJ: What’s interesting too is that this extends beyond medicine. We also have veterinarians and dentists listening.

Veterinarians, for example, often graduate with very large debt burdens relative to income. According to AVMA data, the average real income for veterinarians in 2024 was around $154,000, while new graduates entering full-time work in 2025 averaged around $130,000 starting salary.

Many dentists and veterinarians entering private practice also won’t qualify for PSLF because they won’t work for eligible nonprofit employers.

So how do you advise those professionals — and even physicians in certain specialties — who realistically won’t have access to PSLF?

JD: The bottom line is they need to take their debt seriously.

They need to assume they’ll be responsible for paying it back rather than relying on forgiveness programs.

Personally, I benefited tremendously from Public Service Loan Forgiveness, and I’m incredibly grateful for that. It made my life significantly easier. But there’s a very real possibility that future borrowers may not have access to the same opportunities.

Because of that, students and early-career professionals need to approach debt repayment intentionally — especially during major transitions like moving from training into their first attending job.

Those early years are incredibly important. If possible, they should direct a meaningful portion of their increased income toward eliminating debt quickly.

Debt can feel like a millstone around your neck. It weighs on people emotionally and practically. Having a clear plan to eliminate it matters enormously.

And honestly, I think that’s reflected in the survey results you shared earlier. Young physicians, dentists, and veterinarians understand how heavy debt feels, and they’re taking it seriously.

MJ: And part of taking it seriously is learning to evaluate debt in the context of lifetime earnings — not just your current financial snapshot.

You have to step back and evaluate the investment you made over the course of an entire career.

That brings me back to some of your research around net present value analysis and lifetime career earnings. One finding from your research — honestly, I think it should be required reading for every medical student — was around promotion timing in academic medicine.

Your research published in JAMA Network Open found that in many specialties, promotion timing had a larger impact on lifetime earnings than specialty choice itself.

That surprised me. Delayed or absent promotion could cost physicians hundreds of thousands — even millions — of dollars over a career.

So how do most trainees currently think about promotion, and what should they be asking that they aren’t?

JD: When I finished fellowship, I honestly don’t think I fully understood the difference between assistant professor, associate professor, and full professor. I vaguely understood it mattered academically, but I didn’t appreciate the financial implications.

For anyone listening who may not know how this works, academic physicians are typically hired at the instructor or assistant professor level and then move through a series of promotions over time.

Those promotions are not simply based on being a good doctor. They’re often tied to things like research productivity, teaching contributions, clinical output, RVU generation, and institutional expectations. It depends somewhat on the institution and the role you were hired into.

But if you navigate that system successfully and earn promotions, the financial impact can be enormous.

For example, in my specialty, moving from assistant professor to associate professor can mean a $60,000 to $70,000 annual raise. Then moving to full professor may add another $80,000 annually.

And once you earn those raises, you carry them forward for the rest of your career.

I’ve been fortunate to be promoted relatively quickly. I’m about 11 years out from training and recently became a full professor. If I work another 25 years, that means I’ll spend 25 additional years earning full professor-level compensation compared to colleagues who may remain assistant or associate professors much longer.

Financially, those promotion raises are far larger than most incremental gains from clinical productivity bonuses or RVU targets.

What’s also interesting is that this doesn’t affect all specialties equally. Pediatric subspecialties, for example, tend to have compensation more tightly tied to academic rank, whereas adult specialties often have tighter salary clustering regardless of title.

That’s actually one factor contributing to pediatric-adult compensation differences.

One thing I encourage pediatric specialists to prioritize is intentionally pursuing promotion earlier because it can significantly narrow that compensation gap over time.

MJ: Especially on the pediatric side, I guess. And I want to talk about that because your research looking at the pediatric versus adult pay gap found that the gap has widened over the past decade. It’s also most pronounced at the assistant professor level, which is exactly the point when trainees are deciding what path to pursue.

So are these financial signals actually steering early-career doctors away from pediatric subspecialties and pediatrics in general?

JD: It’s not “maybe.” They absolutely are.

There’s a lot of research looking at trainee attitudes and what influences specialty choice, and compensation is consistently one of the biggest factors. Trainees tend to anchor heavily on starting salary, and the pay gap between adult and pediatric specialists is widest at the starting assistant professor level.

Broadly speaking, pediatrics and pediatric subspecialties have struggled significantly with recruitment in recent years. Many fellowship positions are going unfilled, both in general pediatrics and across pediatric subspecialties.

MJ: Is that true equally for surgical and non-surgical pediatric specialties?

JD: No, and that’s actually really interesting.

I have another paper coming out that looks at something called “market optionality.” The concept is basically this: pediatric surgical specialists often have the option to work in the adult world, while pediatric medical subspecialists usually do not.

For example, as a pediatric cardiologist, I make roughly 25% to 30% less than my adult cardiology counterpart at the same academic rank. That’s driven largely by the fact that many of my patients are on Medicaid while adult cardiologists have a different payer mix. Productivity measurements like RVUs also tend to be built around adult medicine and don’t always translate well to pediatrics.

But at the end of the day, I can’t simply tell my institution, “You’re not paying me enough, so I’ll go practice adult cardiology,” because I’m not trained to do that.

Now compare that to something like congenital cardiac surgery. If a pediatric congenital surgeon felt underpaid, they could potentially move back into adult cardiothoracic surgery. They have market optionality.

Because of that, children’s hospitals often have to pay those surgical specialists at least similarly — or sometimes even at a premium — to keep them in pediatrics.

So the pay gap doesn’t really exist in pediatric surgical specialties the way it does in pediatric medical subspecialties. And I think that’s largely driven by supply, demand, and market flexibility.

Ultimately, hospitals will pay what they have to pay in order to recruit and retain people for those roles.

MJ: What’s fascinating is how many training decisions ultimately come down to this “one more year” question.

You see it constantly, especially in pediatrics. There’s always another fellowship year, another research year, another credential that someone says you should do.

I remember during Med-Peds training, pediatric hospitalist fellowships were becoming a huge thing. I still don’t fully understand why that became necessary — though I’m sure someone listening could explain it to me.

But when you think about lifetime earnings, delaying your attending salary by even one year can have a huge financial impact.

So when is additional training actually worth it financially?

JD: I can speak most confidently in pediatrics, though there are parallels in adult medicine.

When we modeled the net present value of pediatric fellowships, only a few specialties actually resulted in a positive financial return compared to becoming a general pediatrician immediately after residency.

Those were pediatric cardiology, neonatology, critical care, and emergency medicine.

Everything else was financially negative. From a purely financial standpoint, you would’ve been better off becoming a general pediatrician instead of spending an additional three years training to become, for example, a pediatric infectious disease physician or nephrologist.

And interestingly, when you look at which fellowships consistently struggle to fill positions, it closely mirrors those compensation patterns. That strongly suggests trainees are absolutely factoring pay into these decisions.

MJ: That’s wild. I knew pediatric cardiology was one of the few financially favorable ones, but I didn’t realize emergency medicine was also in that category.

JD: It’s not dramatically advantageous financially, but it’s at least slightly positive.

And I think it’s important not to overemphasize one variable. Sometimes we look at two options and say one is financially better than the other, but if the differences are relatively small, they’re functionally pretty similar.

I certainly wouldn’t tell someone to choose pediatric cardiology solely because it pays more. There are many other factors that matter much more than income alone.

MJ: Which pediatric subspecialty had the most negative net present value?

JD: If I remember correctly, it was either infectious disease or adolescent medicine. They were both near the bottom.

Interestingly, and this ties directly into the conversation we’re having, there was a major announcement just a couple of weeks ago that pediatric subspecialty fellowships may transition from three years to an optional two-year model.

The details haven’t really been worked out yet. Honestly, I found out at the same time everyone else did — and I’m a fellowship program director. Most fellowship directors are still trying to understand what this will actually look like.

But supposedly within the next couple of years, this transition could happen.

A major driver behind the proposal is exactly what we’re discussing: pediatric fellowships are struggling to recruit trainees. The thinking seems to be that shortening fellowship training may make subspecialties more appealing.

Whether that actually works, nobody really knows yet. But this is clearly being recognized as a major workforce problem, and leadership is trying to address it somehow. I’m just not convinced this is necessarily the best solution.

MJ: Do you think you can adequately train a pediatric subspecialist in two years?

JD: Speaking specifically from the cardiology perspective — no, I don’t think so.

Now, I also recognize my own bias. I trained for three years, and most people who went through difficult training naturally believe that training was necessary.

But if anything, the complexity of our field has increased dramatically over the last 10 to 20 years. There’s more knowledge, more technology, and more procedural complexity than ever before.

So the idea that we can compress all of that training from three years into two — while trainees are simultaneously working fewer hours overall than previous generations — I struggle to see how that produces the same level of confidence and competency on the back end.

But I could be wrong.

MJ: That’s interesting. Going back to the $200,000 lifetime cap for borrowing for medical, dental, or veterinary school, it’s going to be interesting how that impacts career choices. We actually surveyed this. We asked respondents whether they would choose medicine again if they were starting under a $200,000 borrowing cap.

27% of respondents said they would not choose medicine again if they were starting over with that cap. Another 26% said they were unsure. That’s over half either out or undecided.

Are you surprised by that? Do you think that number is low? Do you think this will actually affect career choice?

JD: A lot of that relates to uncertainty. That question is being asked in the middle of a policy environment where no one really knows how things will ultimately play out, and uncertainty tends to increase fear.

There’s also something called the focusing illusion. When you ask people detailed questions about a specific variable — like debt caps — it becomes more salient in their mind. So when you immediately follow that with, “Would you choose medicine again?” their responses are naturally influenced by what they were just thinking about.

And most respondents are younger — trainees or early-career physicians — so debt is already a very central concern for them.

At the end of the day, we really have to look at behavior, not stated intention. Behavior depends not just on what medicine looks like, but what alternative pathways look like as well. And right now there’s a lot of uncertainty across the broader economy, including things like AI and other labor market shifts. So we’ll see how it all shakes out.

MJ: I’d like to close out with some rapid-fire true or false statements — though they’re really more statements. You just tell me whether you think they’re true or false. Some are easy, some are harder.

True or false: nobody ever actually taught you how to read your first attending contract.

JD: True. Nobody did that for me either. I don’t know many physicians, dentists, or veterinarians who actually had formal training in that.

MJ: True or false: at some point during medical training, you made a financial decision you still think about.

JD: (laughs) If you’re framing it as a mistake, I’m not sure. But if you mean a major financial decision, then yes — choosing medicine is the big one I think about. And I’m grateful I did.

MJ: That kind of leads into the next one: true or false, you would still choose medicine again.

JD: True.

MJ: Would you still choose pediatric cardiology?

JD: Yes… not as definitively, but yes.

MJ: What would be your alternate-universe specialty? If you weren’t a pediatric cardiologist, what would you be?

JD: I’m honestly not sure. There are a lot of types of work I think I would have found meaningful and intrinsically motivating. I think I would have been able to build a good life in several different paths.

MJ: You know what’s funny — I could actually see you as a pediatric nephrologist. But those two fields are basically rivals.

JD: (laughs) We are.

MJ: True or false: doctors are more financially savvy than they give themselves credit for.

JD: There’s a confounder there — gender.

Among male physicians, I think confidence often outpaces actual financial knowledge or skill. Among female physicians, I think the opposite is more common — they tend to underestimate their own competence, even when they’re very capable. So I think gender plays a big role in that perception.

MJ: I’m not surprised I asked a simple true or false question and got a nuanced answer.

I always end with this question — though you’ve kind of already answered it — what’s something you’ve recently changed your mind about?

JD: This is very specific, but I’m currently writing a book on how Christians make decisions, and I’ve been wrestling with the role of the Holy Spirit and how that interacts with cognitive bias.

I think I previously leaned too heavily toward a purely rational framework — where I could analyze decisions and attribute them to bias rather than spiritual discernment.

I’m starting to recalibrate that and allow more space for both perspectives. That shift has happened very recently — within the last few days.

MJ: Wow, a few days? That’s pretty fresh. Does that mean you have to rewrite your book?

JD: No, I think it just means I need to rebalance it a bit and not swing too far in one direction.

MJ: That’s a sneak peek for your book.

JD: (laughs)

MJ: I didn’t get to ask you this earlier — would you pick medicine again?

JD: Would you pick the same specialty?

MJ: Yes, I would. I was actually on the campus of my medical school just yesterday for the first time in a while, and I felt a wave of anxiety walking in. A lot of memories came back.

But despite that, I agree — there’s no other job I can think of that provides the same level of meaning. For me, medicine still feels worth it. I’d choose Med-Peds again because I like the variety.

JD: Would you still have gone the route of founding Panacea at the time you did?

MJ: Probably earlier, honestly. I know a lot more now than I did then, and I’d probably try to accelerate it. But the goal has always been the same — help doctors solve financial problems.

JD: It’s interesting — you pursued two very different career paths: medicine, which has relatively predictable financial outcomes, and entrepreneurship, which has a wide distribution of outcomes.

In a way, combining those two gives you both stability and upside. That’s a powerful combination.

MJ: That’s interesting you say that, because I actually deferred medical school for two years to teach middle school. Someone once calculated the lifetime earnings impact of that decision — and it wasn’t financially optimal.

But it was an experience I wanted. It was about opportunity, not optimization.

JD: That’s fascinating, because you’re effectively combining two distributions — one stable and one highly variable — and that can actually create a strong overall portfolio.

MJ: You just turned the tables on me there.

JD: (laughs)

MJ: Where can people find more of your work?

JD: The easiest place is my website, joshdaily.com. I have links there to blog posts and academic work.

MJ: Amazing. Dr. Josh Daily, thank you for joining us.

JD: Thanks, Michael. Always a pleasure.

MJ:

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