Finance vs. Medicine: The Cost of Choosing
- 5 days ago
- 5 min read
Dear Colleagues:
What follows below is a post by our Clinical Research Coordinator this year. Devin M. Vasquez made the move from investment banking to healthcare and is applying to medical school this cycle. Here are his insights and thoughts into the differences between these two vocations, inspired by the attached article.
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It is difficult to think of a career after college where opportunity cost feels more tangible than choosing between finance, specifically investment banking, and medicine.
I entered banking as a fresh college graduate and immediately felt the pull of a yearly six-figure salary and annual performance bonuses with promotional bonuses and stock options on the horizon. For many, the pursuit of financial success becomes the career itself as it becomes harder to escape the security of a high compensation and the inevitable “golden handcuffs.”
If one enters medicine out of college, and without family wealth to support the path, one can easily find themselves in nearly half a million dollars of student loan debt. It may take over seven years (depending on the specialty) before earning a stable income and years afterwards to finally pay down your own debt. These opportunity costs are certainly worth acknowledging and can be a pivotal reason why many decide to delay, reconsider, or pivot from pursuing a medical degree despite a genuine desire to care for others.
Despite this difference, the overlap between finance and medicine is not immediately apparent, yet there are important conceptual parallels that exist in both fields.
Defining Successful Outcomes
In medicine, clinical decisions, both non-operative and operative, are guided by existing literature and scientific evidence, yet successful outcomes are never guaranteed. The risk of complications is inherent since individual patient responses vary across interventions. Success, therefore, depends not only on survival, complication rates, or disease resolution, but also on functional recovery, quality of life, and alignment with the patient’s preferences. Moreover, true success often requires long-term follow-up to fully understand the impact of an intervention.
In investment banking, financial models and assumptions lead to valuations that guide transactions such as mergers, acquisitions, and capital raises. A successful deal is one that achieves the client’s strategic and financial objectives through strong execution, appropriate valuation, and effective management of diligence and negotiations. However, the risk of a deal “dying” and becoming “dead” in banking is always high due to constant shifting market conditions, financing and regulatory issues, no buyer interest, poor execution, or simply waiting until the time is right. However, once a deal is approved by all parties and considered “closed”, fees are generated for the advising bank, and the deal strengthens its credibility for future mandates.
In both fields, there is inherent risk that parties must mitigate. Decisions rely on imperfect information and using past successful outcomes to guide future ones. In one field, success is measured in financial returns and institutional reputation. In the other field, it’s measured in human lives and experiences.
Efficiency
As defined, “efficiency” is measured based on the ratio of work output to work input. When one enters the field of investment banking, high efficiency and communication are arguably the baseline expectations. Junior analysts are often expected to respond to emails from their seniors within minutes, turn comments on marked-up decks or models, and immediately switch gears to another account without hesitation. In this environment, communicating to your senior teammates that you don’t have capacity can be perceived as a lack of prioritization, or maybe just inefficiency.
Thus, efficiency in banking becomes intertwined with managing perception. Trust matters, but so does signaling that you are always available to push through comments or walk through a deck or model. The reality is that the analysts who are seen as "top bucket" are usually the ones who take on the most work, rarely push back, and execute despite the 90+ and 100+ hour work weeks. One quickly learns that success at the junior level often depends not only on output, but on signaling constant availability and reliability. Being vocal and speaking up to try to improve team dynamics doesn’t help you; navigating the workload with no complaints and keeping others confident in you does. Many junior analysts and associates must play the political corporate game.
In medicine, efficiency isn’t just about working faster. It’s about being able to optimize the resources and structure you’re given by a healthcare system. Physician productivity is shaped by compensation models and bureaucratic institutional policies, with some models incentivizing high volume of care through relative value units (RVUs), and others rewarding outcomes, preventive care, or research. These structures can create competing demands for many physicians. At certain large academic medical centers (AMCs), a volume-driven compensation model can discourage time spent on research or other meaningful activities incentivizing surgeons to perform surgery—yet a surgeon might still face inefficiencies such as not having enough operating room time or being unable to add additional surgical cases due to institutional policies.
True efficiency in medicine, then, requires alignment at every level. Hospitals must create systems that allow physicians to maximize their skills and time, while physicians must remain focused on delivering exceptional care to their patients. Unlike banking, where efficiency is individualized and perception-driven, efficiency in medicine is innately systemic.
Value and Scale
The concepts of value and scale are foundational in the financial world. Metrics such as equity value or enterprise value are important to determine specific financial valuation ratios that allow investors to compare profitability across companies and industries. Investment banking and private equity professionals advise companies on strategies to expand market share, optimize cost structure, and drive growth. Scale, in this context, amplifies company growth and financial returns to maximize profitability and deliver high returns for its stakeholders.
Similarly, we can apply these two terms to the surgical field of medicine. Value can be defined as achieving the best possible patient outcome at a relatively low cost, emphasizing both effectiveness and efficiency of care for the patient and the hospital. Scale emerges through the diffusion of reproducible techniques and innovations, such as complex tendon transfers or new tools for care, that allow more patients to benefit from high-quality care.
Although the concept of value remains almost identical in the financial and medical worlds, the purpose of scaling slightly differs. Scaling in the medical field is a means of disseminating new knowledge to other providers without compromising patient care. In economics and finance, scaling is primarily a means of increasing revenue and returns faster than costs.
Finally…
There is no doubt that the professionals occupying the fields of investment banking and medicine operate in high-stakes environments that are defined by uncertainty, incentives, and performance. However, they diverge in what they ultimately optimize. On one hand, banking is designed to provide the best financial advisory services to companies, rewarding speed, scale, and execution. On the other hand, medicine is designed to care for patients, relying on knowledge, technical skills, and ethical judgment.
Unequivocally, the opportunity cost between the two paths is hard to ignore. But, beyond compensation and time, the distinction lies in what success represents. In finance, success compounds in financial returns and institutional reputation among others. In medicine, success is a combination of different factors measured in the lives affected over time.
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Thank you Dr. Warner for providing me the opportunity to contribute to CSS.
Devin M. Vasquez is a former investment banking analyst and current clinic research coordinator for Massachusetts General Hospital’s Shoulder Service. He is applying to medical school this upcoming cycle.
*Chat-GPT was used for the production of the cover image.
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