Physician Compensation -- A Deeper Dive: Does Money Make Them Happy?

Carol Peckham

Disclosures

April 15, 2014

In This Article

The Rise of the Salaried Doctor

Among physicians overall, self-employed doctors earned an average of $281,000 compared with employed physicians, who earned $228,000. In primary care, the difference was less pronounced; self-employed physicians earned $188,000 and employed physicians earned $180,000. The most common payment method for employed doctors is straight salary, although physicians increasingly also have to meet productivity targets.

A New York Times article reported that 64% of positions looking to be filled last year were in hospitals, compared with only 11% in 2004.[17] In the recent Medscape report on physician employment, nearly 80% of those who are employed were either satisfied (49%) or neutral (30%) about their income, which could reflect that even if they were making less money than if they were self-employed, the benefits of a regular paycheck (and possibly doing less work for the same money) might compensate for not being self-employed.

Location, Location, Location: Does Setting Affect Income and Satisfaction?

Income by Practice Setting

Physicians in single-specialty group practices are the highest earners, while those in solo practices are third from the bottom, making an average of $57,000 less than those in group practices. Physicians who work for healthcare organizations are the second highest earners. The lowest earners are in outpatient clinics. A 2012 AMA report found that 60% of physicians now work in physician-owned practices, with a upward trend toward large groups, whether hospital employed or in independent practices.[18]

Hardly Anyone Likes Their Practice Setting

Income levels by practice setting do not appear to affect a physician's satisfaction with it. Only about a quarter of physicians would choose their own practice setting again if given the choice, and no setting proved much more appealing than another (Figure 4). There was a slight preference for office-based single-specialty group settings (where earnings were highest) and solo practice (earnings were third from the bottom), but no percentage favoring any setting exceeded 30%.

The Rise of the ACO

Between 2011 and 2013, there has been a dramatic rise in physician participation in Accountable Care Organizations (ACOs), with nearly a quarter of all physicians now employed in these organizations, compared with only 3% in 2011. ACOs are designed to deliver improved care for patients. Within these settings there are various payment models, including shared savings programs,[19] advanced payment models (mostly for rural providers),[20] and the Pioneer ACO Model, which is for organizations and providers with experience in coordinating patient care.[21]

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