ASRA News, May 2021

Regional Anesthesiology Fellowship: A Half a Million Dollar Opportunity Cost?

Feb 1, 2021

James D. Turner, MD; Jacob A. Matthews, MD; Wake Forest Baptist Medical Center

The decision to pursue a fellowship as an anesthesiologist should not be based on financial factors alone. The decision ought to weigh career trajectories and goals, passions and pursuits, and ultimately what produces the most satisfaction while taking care of patients. Yet, in the push toward ACGME accreditation for Regional Anesthesia and Acute Pain Management (RAAPM) fellowships, financial considerations are being more frequently discussed among trainees. In general, PGY-5 salaries are often lower than the salaries offered in non-accredited fellowships. Zooming out even further, one must consider the aggregate opportunity cost, including the loss of an attending salary and wealth-building potential, when pursuing a RAAPM fellowship. For a fair analysis, we must also consider the return on investment (ROI) of a RAAPM fellowship. That is what this article aims to address.

Opportunity Cost

Opportunity cost is defined as the potential loss of money that results from choosing one alternative over another. In this case, it is the financial loss felt by choosing a lower-paying fellowship versus directly entering practice as an attending physician. What produces this opportunity cost? It comes from two different factors. The first is a loss in salary. The second is the lost opportunity to build wealth with the money you stood to make.

Lost Salary

The obvious opportunity cost most consider when pursuing a fellowship is the opportunity to make an attending physician salary compared to a fellow salary. In other words, lost salary = attending salary – fellow salary.

The financial opportunity cost is only one-half of the full story when weighing the merits of pursuing a RAAPM fellowship.

In ACGME accredited positions, as a PGY-5 physician in training, fellow salaries typically range from $60,000 to $70,000, though higher salaries can be found in fellowship programs in more expensive cities. Non-accredited regional fellowship salaries typically range between $75,000 and $150,000.1 Of course, both accredited and non-accredited positions can be supplemented with moonlighting income, if desired.2

When comparing the total compensation provided in Table 1 (non-academic) and Table 2 (academic) by the 2020 Medical Group Management Association (MGMA) Reports from 2019 data, you can start to understand the opportunity cost of a fellowship in terms of lost salary.

Yet, calculating the lost salary is not as straightforward as it seems. Many people hold that it is the first year’s salary as an attending that should be used to calculate lost salary. However, this is not accurate. Your peak earnings salary at “professor” or “partner” is what truly counts. You will have one less year at that pay at the end of your career.

Table 1: Non-academic total compensation from the MGMA 2020 Report (2019 Data).3

13_Finances_Turner_Table 1

Table 2: Academic Total Compensation from the MGMA 2020 Report (2019 Data).3

13_Finances_Turner_Table 2

Using the “Years 2+”, or mid-career, MGMA data one can find an estimate for lost salary. For example, assuming a non-accredited fellowship salary of $125,000 and using the median incomes provided by the MGMA data, the lost salary cost, assuming a median academic position nationally, is about $267,000. For non-academic positions, the potential lost salary is about $350,000. Between the two, this produces an average lost salary of $308,500.

Building Wealth

Interestingly, long-term satisfaction and happiness do not increase above a household salary of $75,000.4 Arguably, then, the lost salary mentioned above is not the “end all, be all” it seems in terms of opportunity cost. In actuality, the loss is much greater than simply salary when the loss of wealth building is considered, which is needed to secure a financial future.

The most common surrogate for wealth is Net Worth (Net Worth = Assets – Debts). Most graduating residents have little in terms of assets yet carry considerable debts; namely student loan debt where the average debt burden for graduating medical students is now above $200,000, which compounds over a four-year anesthesiology residency.5

However, once you become an attending physician, you now have an opportunity to build wealth by improving your net worth. This is where the second, and arguably more powerful, opportunity cost presents itself. For example, if $60,000 of your attending salary (eg 20% of a $300,000 salary) were invested in the market with an expected nominal return of 6% interest over their 30-year career, this one-time deposit would result in $340,000.

If we combine this $340,000 with the average lost income mentioned above ($308,500, subtracting out the $60,000 invested so that we do not “count the same dollar twice”), it seems that fellowship could stand to cost over $588,500. This is a realistic financial opportunity cost of pursuing a fellowship; this does not include any negative compounding, such as any interest gained by debt. It is, therefore, a conservative estimate.

Return on Investment

In other specialties, there can be a marked difference in compensation for fellowship and non-fellowship trained physicians. This information can be utilized to determine the number of years required to “break-even” on the investment in your fellowship, utilizing net present value functions.6 While this calculation may be helpful for our chronic pain colleagues who do see a marked difference in pay following a chronic pain fellowship, in most situations, a RAAPM fellowship typically does not offer a substantial difference in pay.

Not all hope is lost, however. As a RAAPM fellowship director, I value the additional education that my fellows undertake! Therefore, the financial opportunity cost is only one-half of the full story when weighing the merits of pursuing a RAAPM fellowship. What other considerations might be included in receiving an adequate ROI for those who choose to pursue a fellowship?

To start, a RAAPM trained anesthesiologist may have more opportunities to tailor their career because of their fellowship training. For example, if a group is interested in starting an acute pain service line, one could argue that a RAAPM fellowship-trained anesthesiologist would be the best person to do this. Additionally, in light of the opioid epidemic, job opportunities may be specifically available for those who have a background in RAAPM and the skill set of a graduating regional anesthesiologist. Ultimately, if a career in academics is a goal, a fellowship is often necessary before joining a regional anesthesia section. This provides an opportunity for a vast depth of experience in regional anesthesia in all three facets of academia (clinical practice, teaching, and research).

These additional opportunities can aid a physician in securing a position that best reflects their priorities. This can lead to career satisfaction and even longevity. Financially speaking, nothing matters more in investing than “time in the market.” The longer you can save 20%-30% of your income, the more time the magic of compounding interest has to work. This is why finding an enjoyable and sustainable role matters most when it comes to any true ROI discussion.

Ultimately, the decision to pursue a RAAPM fellowship need not be based on finances alone. Truly, the financial considerations are secondary. All else being equal, it may prove to be a helpful exercise to consider the monetary aspects of this decision. When doing so, make sure to include both the opportunity cost and the potential for a return on your investment in a regional anesthesiology and acute pain medicine fellowship.

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James D. Turner, MD, is a regional anesthesiologist and fellowship program director at Wake Forest Baptist Medical Center in North Carolina, and also a personal finance blogger and podcaster at The Physician Philosopher, life and career coach for doctors, and the author of The Physician Philosopher's Guide to Personal Finance. You can find him on Twitter @TPP_MD.

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Jacob Matthews, MD, serves as chief anesthesiology resident (PGY-4) at Wake Forest Baptist Medical Center. An early follower of the White Coat Investor, Jacob enjoys studying the intersection of money and medicine. In his free time, he and his wife take every opportunity to explore the nearby Appalachian Mountains. He can be reached at


  1. Fellowship Directory. Pittsburgh, PA: American Society of Regional Anesthesia and Pain Medicine. Available at: Accessed August 8, 2020.
  2. Accreditation Council for Graduate Medical Education. ACGME program requirements for regional anesthesiology and acute pain medicine. Accessed August 8, 2020.
  3. Medical Group Management Association. MGMA 2020 Report (2019 Data). Englewood, CO. 2020.
  4. Kahneman D, Deaton A. High income improves evaluation of life but not emotional well-being. Proc Natl Acad Sci USA. 2010;107(38):16489-93.
  5. Association of American Medical Colleges. Medical student education: debt, costs, and loan repayment fact card for the class of 2020.
  6. Gaskill T, Cook C, Nunley J, Mather RC. The financial impact of orthopaedic fellowship training. J Bone Joint Surg Am. 2009;91(7):1814-21.
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