Compensation: Are Physicians Better Off Now Than 6 Years Ago?


These are difficult times for physicians, with pressures coming from many directions, including changes in the way they are paid, consolidation of healthcare systems, technology requirements, and a growing elderly population. Burnout rates are high among physicians—46%, according to this year’s Medscape Physician Lifestyle Report.

But there are signs that things may be getting better, and it isn’t all about the money. In this year’s Medscape compensation report, more physicians are saying they would choose medicine again than they did 2 years ago; the highest percentages are among family physicians and internists, who tend to earn less than most physician groups.

More women are entering the profession, and according to a 2013 survey, they are more optimistic than men are and tend to believe that health reform and electronic medical records will improve patient care.[1] And their income is rising at a higher rate than that of the men. The trend toward higher employment numbers, particularly among younger doctors, may be taking some of the stress off the profession. In this year’s report, those who were employed were far more satisfied with their income than those who were self-employed. The future of healthcare is still in question, but there are signs that we may be arriving at least at a breathing point

What’s Happening In Physician Compensation?

This year, Medscape posted its sixth annual compensation report. Nearly 19,200 physicians in over 26 specialties responded to this year’s survey and, as in every year since 2011, were asked to provide their compensation for patient care. For employed physicians, patient-care compensation includes salary, bonus, and profit-sharing contributions. For partners, this includes earnings after taxes and deductible business expenses but before income tax. They also answered questions that included number of hours worked, minutes spent with each patient, the most rewarding part of their jobs, and practice changes resulting from healthcare reform.

The physician groups at the bottom and top of the earnings list have not changed much over the past 6 years. This year the lowest earners, starting from last place, are pediatricians ($204,000), endocrinologists ($206,000), and family physicians ($207,000). In 2010, those physicians groups were also in the bottom three.

The top three earners this year are orthopedists ($443,000), cardiologists ($410,000), and dermatologists ($381,000). In the 2011 report, orthopedists were also first, followed by radiologists, anesthesiologists, and then cardiologists. Dermatologists were eighth 6 years ago.

Travis Singleton, senior vice president of Merritt Hawkins, a national physician search firm, shed light on dermatologists’ rise in compensation ranking over the past years. «The demand for dermatologists is driven by patient aging and, to some degree, by patient vanity, as the number of cosmetic procedures increases. The Merritt Hawkins’ Survey of Patient Appointment Wait Times indicates it takes an average of 72 days to schedule a dermatology appointment in Boston, 56 days in Minneapolis, and 49 days in Philadelphia—all markets with a relatively high number of physicians per capita. A severe need for the ‘nonglamorous’ side to dermatology, dealing with skin rashes and burn victims, is also driving compensation.»

How Much Has Physician Income Increased Over Time?

In the United States, inflation has grown by only 5.4% since 2011,[2] and according to the Social Security Administration, wages have grown between 2011 and 2014 by an annual average of only 2.77%.[3] The annual average increase for physicians, however, is much higher, according to Medscape surveys. Between 2011 and 2016, male physicians averaged an increase of 6%, and female physicians 7% (Figure 1).

Figure 1. Annual Average Physician Compensation: 2011-2016

In this year’s compensation report, when compensation is compared with the prior year’s figure, only two specialties—allergists and pulmonologists—experienced an important decrease in income (-11% and -5%, respectively). The compensation of pathologists and plastic surgeons was about stable. The rest of the physicians reported an increase, with the greatest appearing among rheumatologists and internists (12%), followed by nephrologists and dermatologists (11%). This year, several were in the double-digits, and most were above 4%.

When asked about the high increase in internist salaries, Travis Singleton commented, «The compensation increase for internists is really a dog-bites-man story in today’s market—it’s not a surprise. Traditional inpatient/outpatient internal medicine is an extremely challenging search to fill, because so many internists have migrated to hospitalist roles. The candidate pool is shrinking, while at the same time, over 10,000 Baby Boomers turn 65 every day—driving demand for internists, and their compensation, higher. Outside of traditional internal medicine care, we also see huge spikes in the need for geriatric care and home health, which require the full scope of care that internists can provide. In addition, more and more large integrated delivery systems employ internists vs smaller, independent group practices as in years past. They simply have more capital to spend on salaries and more return on investment to gain via downstream revenue than independent groups.»

The rise in hospital medicine has been particularly significant for internists. According to a quote by Joe Mill, a senior vice president of the Society of Hospital Medicine, «Hospitalists continue to be in demand, demonstrating a steady increase in compensation. This, combined with the steady growth of the specialty, indicates that US hospitals continue to value the work of hospitalists.»[4]

The Ongoing Issue of Gender Disparity

According to government data, the percentage of male physicians (65%) is still considerably higher than that of female physicians (35%), although the number of women physicians is catching up and even surpassing that of men at younger ages.[5,6] In the current Medscape report, 30% of those who responded were women, similar to the national data. The highest percentages of women responding to the survey were ob/gyns (55%) and pediatricians (53%), followed by pathologists (42%), and psychiatrists and dermatologists (both 38%). About one third of primary care physicians (PCPs) are women: 36% of family physicians and 31% of internists. Women still tend to join nonsurgical specialties, with the fewest women choosing urology (7%), orthopedics (9%), and cardiology (12%).

In our 2016 report, men still earn more than women, whether they are PCPs ($225,000 vs $192,000, respectively) or specialists ($324,000 vs $242,000, respectively). In 2012, male specialists made $242,000 vs $173,000 for women. Male PCPs made $174,000, and their female peers made $141,000. On an encouraging note, women’s earnings increased more between 2012 and 2105 than did men’s: 40% for female PCPs and 34% for their male peers. For specialists, the percentage increases between those years were 36% for women and 29% for men (notably, the lowest increase in all groups).

Overall, female physicians make 24% less than their male peers do, although the disparity is less among PCPs (15%) than among specialists (25%). When asked about this disparity, Travis Singleton of Merritt Hawkins said, «The persistence of these disparities is puzzling, because we see no contractual bias from our clients against female candidates, and in primary care and ob/gyn, there often is a preference for female physicians.» He observed that disparities may exist in work schedules, «particularly with younger female physicians who are in their peak child-rearing years and require flexible schedules, including part-time.» He also thought disparities can be tied to productivity patterns (eg, number of patients per day, and hours per week.) Of note, however, the compensation given in the Medscape reports is based on full-time salaries.

The Challenge of Gender Differences in Part-Time Work

In 2010, 48% of medical degrees were earned by women. Given the growing physician shortage, it is concerning that over one quarter of female PCPs are part-time. In this year’s report, 12% of men and 25% of women say they work part-time, which has not changed since last year’s report. «Part-time» is defined as working less than 40 hours per week. When the percentage of male and female part-timers is examined by age, the percentage of men who work part-time is generally low and increases slowly over time (from 3% to 16%). Among women, however, part-time percentages are never under 12% and first peak at 27% among those aged 40-44 years, when many have children in school, and then again when they reach age 55 years and over (27%-29%) (Figure 2).

Figure 2. Part-Time Physicians, by Age and Gender

Location, Location

This year, the highest earnings were reported in the North Central ($296,000) and Southeast ($287,000) regions, whereas the lowest were in the Northeast ($266,000) and Mid-Atlantic ($268,000) regions. Geographic supply and demand continue to play a role in compensation. Uneven distribution of physicians to patient volume, particularly in primary care, has been a problem for decades in rural and poor communities.[7]Numerous government policies are aimed at improving access to physicians in these areas. As a result, higher incomes are found in these regions.[8]

Nevertheless, according to Travis Singleton of Merritt Hawkins, «Although government programs certainly influence physician compensation, it is largely socioeconomics and competition that drives compensation on a macro scale. Rural markets tend to have standard fee-for-service arrangements that drive compensation higher. However, we are seeing the compensation gap between rural and urban areas diminish. Where it was once routine to see salaries 10%-15% higher 2-3 hours outside of the metropolitan market, now you see urban markets with large delivery systems raise salaries to level the playing field. The demand is no longer just a ‘rural’ problem. In turn, that has caused smaller, more rural markets to add more compensation via salary, signing bonuses, and loan forgiveness.»

Compensation by States

Top-earning states. The weather may be less than inviting, but the pay may make up for it. In line with government efforts to attract more physicians to rural and poor areas, the three top-earning states in this year’s Medscape report are North Dakota ($348,000), New Hampshire ($322,000), and Nebraska ($317,000). Last year, this also held: The top earners were located in North Dakota, which was then tied with Alaska (both at $330,000), followed by Wyoming ($312,000). Travis Singleton of Merritt Hawkins observed, «The oil boom in North Dakota has been driving demand and compensation for physicians in this state through the roof, but with current oil prices that trend can be expected to cool considerably. As a largely rural state, Nebraska has traditionally seen relatively high physician compensation, whereas New Hampshire has not and high compensation numbers there may be a 1-year anomaly.»

Low-earning states. The same three states/areas held the dubious distinction of ranking at the bottom in terms of compensation this year as last year. In this year’s report, the lowest-paying locations are Rhode Island ($224,000), District of Columbia ($226,000), and Maryland ($231,000), all on the East Coast. In last year’s Compensation Report, similarly, physicians fared worst in the District of Columbia ($186,000) and Rhode Island ($217,000). Still, despite these states’ low ranking for compensation, Maryland was the only one of the three that showed a decline in income this year (from $237,000)

What’s Happening to Physician Practices?

The Rise of the Employed Physician

This year, as in all previous Medscape compensation reports, both self-employed and employed male physicians earn more ($341,000 and $277,000, respectively) than their female counterparts ($261,000 and $217,000, respectively). The percentage differences in earnings between men and women do not vary much between self-employed (31%) and employed (28%) physicians. However, when looking at employed PCPs, for whom the playing field is more even, men still earn 15% more than women.

Employed physicians say they’re glad they don’t have the business responsibilities of employed physicians, One negative to employment is lower average income. PCPs make $207,000, only slightly less than their self-employed peers ($229,000). Self-employed specialists earn much more than employed specialists; both groups earn more than PCPs. Compared with last year’s Medscape compensation report, however, employed PCPs experienced the highest percentage compensation increase (10%) vs self-employed PCPs (8%) and all specialists (6%).

Nevertheless, physicians who answered this survey and are employed, both men and women, had much higher satisfaction rates with their compensation than those who were self-employed. Almost three quarters (72%) of employed women compared with only 23% of self-employed women felt fairly compensated, as did 59% of employed men compared with 35% of those who are self-employed (Figure 3).

Figure 3. Physicians Who Feel Fairly Compensated

In this year’s Medscape report, as in last year’s, more women than men were employed (72% and 59%, respectively). Thirty-five percent of men and 23% of women were self-employed. The percentages were virtually identical to those reported last year.

Younger physicians in particular are heading toward employment rather than private practice. Reasons for this include a reluctance to deal with the business side of medicine and a desire for a predictable work schedule.[9] In the current Medscape report, at least 90% of those aged 34 years or younger are employed, and over three quarters (77%) of those between 35 and 39 years of age work for others (Figure 4). According to an American Medical Association report, practice ownership went down from 61% in 2007-2008 to 53% in 2012. Ownership was highest among surgical subspecialties and lowest in pediatrics, emergency medicine, and family medicine.[10]

Figure 4. Employment, by Age

Specific Payment Models Over 5 Years

Cash-Only and Concierge Practices

Despite considerable enthusiasm, cash-only and concierge practices are still not significant payment models.[11] In fact, as Medscape compensation surveys have revealed, concierge practices have stayed at around 3% for the past 3 years. The proportion of cash-only practices went up slightly this year (6%) compared with last year (5%).

Travis Singleton commented, «In lieu of changing to concierge medicine, many physicians have opted out of traditional private practice to become employees. That is their escape hatch from the pressures of private practice. However, as reimbursement systems become more arcane and more value-driven, we anticipate that a growing number of physicians will embrace the concierge model. We have seen a continual increase, albeit a small percentage, of physicians migrating toward a direct-pay model. Whether truly concierge or just removing a third-party payer from the equation, the driving forces tend to be the same. Urgent care delivery systems have also given a safe haven for those providers who might otherwise have chosen concierge or direct-pay practices.

Accountable Care Organizations

In early 2015, Sylvia Burwell, secretary of the Department of Health and Human Services, unveiled a timetable for moving Medicare further from fee-for-service to pay-for-performance. Burwell said that Medicare would funnel 30% of reimbursement to physicians and hospitals through alternative payment models, such as accountable care organizations (ACOs) and medical homes, by 2016, and 50% by 2018.

According to the Medscape survey, current and future participation in ACOs is indeed still increasing, at 39% this year compared with 37% in last year’s report. Thirty-seven percent of specialists participate or plan to participate this year in ACOs, which is much lower than PCP participation (45%). More PCPs (39%) also reported being in ACOs this year than in last year’s report (35%). According to some experts, as of late 2015, the results on ACOs still leave questions as to whether meeting quality metrics translates into meaningful improvement in patient care. In addition, they don’t seem to have reduced costs at all.[12,13]

Impact on Practice of the Affordable Care Act?

As of February 2016, 12.7 million Americans selected plans through the health insurance marketplace—about 4% of the population.[14] There are few data to date on the number of physicians who are participating. Often they have no choice, and many may be locked out of networks.[15] According to the 2015 and 2016 Medscape Compensation Reports, last year 16% of physicians said they were participating in the exchanges and 84% were not. This year, 19% said they would be participating, 29% were not, and slightly over one half (52%) were uncertain.

In the current Medscape report, when physicians who participated in health insurance exchanges last year were asked whether their income was affected, 63% reported no change and 11% said it had increased. About one quarter (26%) experienced a decrease. There are still few national data, however, on the effects of the Affordable Care Act (ACA) on physician income. Many variables will play into the ultimate results.[16] One study from the Robert Wood Johnson Foundation reported a 3% increase in reimbursement in states that expanded Medicaid eligibility and 3.3% in nonexpansion states.[17]

Nearly one half of PCPs (49%) and 30% of specialists report having more patients because of the ACA. Of note, emergency medicine physicians have been particularly hard hit, with more than one half (55%) reporting seeing new patients because of the ACA. Orlee Panitch, MD, chair of the Emergency Medicine Action Fund, who commissioned a poll on this issue for emergency medicine physicians, said, «There is strong evidence that Medicaid access to primary care and specialty care is not timely, leaving Medicaid patients with few options other than the [emergency department].»[18]

Of interest, a 2015 report analyzed how physicians viewed their ability to provide high-quality care 1 year after implementation of the ACA.[19] It found no association with lower- or higher-quality care, whether or not patient load had increased. Among those who said quality had worsened, 21% had a higher patient load and 18% saw no increase. Over three quarters (78%) of physicians whose number of patients increased said that quality had stayed the same or improved, and 82% who experienced no increase reported the same experience.

Are Physicians Working Harder?

Hours per Week Seeing Patients

The number of hours spent seeing patients has shifted over time. In the 2012 Medscape survey, 22% of physicians spent 30-40 hours per week seeing patients, and nearly one half (49%) spent more time than that. This year, over one half (51%) spent 30-40 hours per week with patients and about one third (34%) spent more time (Figure 5).

According to a government analysis, middle-aged physicians work harder than their younger and their older peers. In fact, those between age 46 and 55 years work more hours now than they did in previous years, whereas doctors aged 36-45 years work fewer hours than previously—perhaps because of the increase in women in those age groups, many of whom are working part-time.[6]

Figure 5.

Hours Per Week Spent With Patients: 2012-2016*
* There were no data on this question in 2015 for all physicians.

Minutes Personally Spent With Each Patient

The amount of physician face time with a patient is often an issue, and lately both physicians and patients complain that this time has been getting shorter. However, results of our 2016 survey were consistent with all surveys since 2011: The largest time category of patient visits with the physician is 13-16 minutes, followed by 17-20 minutes. Previous research found that female physicians spend more time with patients than their male counterparts.[20] Indeed, in the 2012 Medscape Compensation report, 55% of female physicians spent more than 17 minutes with their patients, compared with 48% of men. This of course is influenced by some of the specialties more commonly chosen by women; there are very few female physicians in critical and emergency care, which have shorter physician visits. In this year’s report, however, the difference had diminished, with 41% of men and 49% of women spending over 17 minutes, and there were only slight differences in the other time categories.

Hours per Week Spent on Paperwork and Administration

Bureaucratic tasks were the prime cause of burnout, according to this year’s Medscape Lifestyle Report(as in previous ones as well). Second was spending too many hours at work. Medscape compensation reports suggest that the paperwork problem is only getting worse. In the 2014 report 35% of employed and 26% of self-employed physicians spent at least 10 hours a week on paperwork. This year, over one half of physicians spent this amount of time, with slightly fewer self-employed (54%) than employed physicians (59%).

A 2005 study on family physicians reported that 55% of their time was spent with patients, with only 34 minutes (or 6.5% of their workday) spent on paperwork. Almost one fifth of their time was spent on patient-related work not involving care, such as writing up notes, making calls, and interpreting laboratory results.[21]

Do Physicians Feel Fairly Compensated?

Slightly over one half of all physicians (52%) believe that their compensation is fair. Less than one half of women (49%) believe they are fairly paid, compared with 54% of men. Of interest, the percentage of physicians overall who feel fairly compensated has not varied much over the past 5 years (Figure 6).

Figure 6.

Physicians Who Feel Fairly Compensated

As in every year since 2012, among physician groups, those who felt most fairly paid were dermatologists (66%), who are also the third-highest earners this year. Pathologists (63%) and emergency medicine physicians (60%) followed in satisfaction, even though their earnings were toward the middle range among physicians. The least satisfied with compensation are urologists (42%), followed by allergists and endocrinologists (both 43%). There seems to be very little difference among age groups (Figure 7).

Figure 7. Physicians Who Feel Fairly Compensated by Age

Are Physicians Becoming More Content With Their Careers?

Every year, the Medscape survey has included the statement, «If you had to do it all over again…» and asked physicians to respond with three options: whether they would choose medicine in general, their specialty, and their practice setting a second time. The percentage of physicians who would choose medicine again was at a high of 69% in 2011, but then decreased to a low of 51% in 2014. On a positive note, however, the percentage has been increasing since then, holding steady at 64% in 2015 and 2016. Satisfaction with specialty was also highest in 2011 (61%), but has since remained much lower—ranging from 41% in 2012 to 46% in 2014, and sliding back slightly to 45% in 2015 and 2016. Satisfaction with practice setting has been dismally low (around 25%) after decreasing from 50% in 2011 (Figure 8).



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