One of the main reasons for the terrible Pathology Job Market has been the Pathology training programs. These programs have continued to train the same number of residents even though the job market has deteriorated badly. The Residency Program Directors should have known about the problem as far back as 1993, when the job market started deteriorating, but the decreases in residency positions have not kept up with the deteriorating job market.
So why train people who may never find jobs? BECAUSE OF THE TREMENDOUS AMOUNT OF MONEY INVOLVED. Keep in mind that Medicare provides Indirect Medical Education (IME) and Direct Medical Education (DME) reimbursements to hospitals that train residents regardless of what the job market is like. This is a considerable amount of money. There is an example available on the internet at the following address:
In the example given the DME is US $1,280,000/yr. and the IME is US $5,250,000/yr. Reimbursements are proportional to the number of residents. As a result, if the program substantially reduces the number of residents they have, there will be a proportionate decrease in reimbursements. The residency program in this example is much larger than any Pathology residency program - 80 Residents and 20 Fellows in the program; but it gives you some kind of idea of the amount of money involved. Medicare is paying this program US$65,300/resident/yr. However, the residency programs only pay each resident about US $25,000-35,000/yr. yet residents sometimes work 60 hours per week doing work that otherwise would have to be done by a Pathology Assistant making around US $65,000-85,000/yr. SO THERE IS A TREMENDOUS AMOUNT OF MONEY BEING MADE IN TRAINING PEOPLE TO BE PATHOLOGISTS EVEN THOUGH THERE IS NO CHANCE THAT THEY WILL ALL FIND JOBS IN THE FIELD.
If our math is correct the residency programs are making about US $80,000-$100,000/resident/yr.
The Balanced Budget Act of 1997 reduced some of these reimbursements but did not completely eliminate them. In our opinion Pathologists will be in oversupply until these reimbursements are completely eliminated. Here are a few more links on Medicare DMEs, IMEs, etc: