The rate of return to a pharmacy education investment in the U.S

Analysis of 10-year income trends for pharmacists and other select health professionals

PURPOSE

To evaluate income trends among pharmacists and other select health professions (dentists, nurse practitioners, registered nurses, and physicians) in the US for the 10-year period of 2012 to 2021, with special attention given to the first 2 years of the COVID-19 pandemic (2020 and 2021).

METHODS

A retrospective analysis was conducted of 2012 to 2021 income data for select health professions, collected from the American Community Survey. Univariate time series analysis was conducted using exponential smoothing to examine income patterns over the 10-year study period and forecast income for the next 5-year period (2022 to 2026) for each health profession. Additionally, time series regression models were constructed for each health profession. Descriptive statistics (mean percent change in income and SD) were calculated for each health profession for the prepandemic era (2012 to 2019) and the first 2 years of the pandemic (2020 and 2021).

RESULTS

Goodness-of-fit statistics for each forecast model indicate highly accurate forecasts. The model for each health profession indicates a significant positive trajectory in income (P < 0.001), although pharmacists are projected to have a lower rate of income growth among the 5 health professions for the next 5-year period, 2022 to 2026. During the first 2 years of the pandemic, pharmacists had the lowest mean percent change in income (mean, 2.0%; SD, 2.0%) among the 5 health professions.

CONCLUSION

Growth in pharmacist income is projected to lag behind that in other health professions in the near future. Individual-, organization-, and profession-level strategies may facilitate opportunities for income growth among pharmacists.

A Theoretical Framework for Estimating the Rate of Return to a Pharmacy Education Anywhere

Undertaking a pharmacy education is an investment in human capital. Candidates trade off present versus future costs and benefits. They make this investment with the expectation of earning enough income throughout their worklives to make their undertaking financially worthwhile. Whether or not this occurs is determined by the rate of return. The aim of the current study was to construct a theoretical model to estimate the rate of return to a pharmacy education investment. Specifications for model assumptions, inputs, and outputs are discussed. The outputs are the rates of return, the inputs are the costs and benefits of a pharmacy education, and the assumptions illustrate the circumstances of the individual or group for whom the model is built. The rate of return is the annual percentage that equates the streams of benefits and costs over the investment span. The higher the value of the rate of return to a pharmacy education is, the more profitable is the investment. This theoretical model may be used to estimate the financial viability of pharmacy and compare it to the viability of other professions or to the viability of pharmacy among various locations.