Physician Earnings: Modest Increase but Frustration Remains

Carol Peckham

Disclosures

April 21, 2015

In This Article

Disparities in Compensation

The PCP vs Specialist Compensation Disparity

Physicians 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 were also asked about compensation for non–patient care activities, such as expert witness duties, product sales, and speaking engagements.

As in the past, the highest earners were specialists who performed procedures. At the top of the list this year (and last year as well) are orthopedists ($421,000) and cardiologists ($376,000), followed by gastroenterologists ($370,000). The lowest earners, as always, are those in the primary care professions and the specialists who treat chronic illnesses. In last place are pediatricians ($189,000), followed by family physicians ($195,000) and endocrinologists and internists (both at $196,000).

Orthopedists, who make the most from patient-care work, are also at the top of the list for compensation from non–patient care activities ($29,000). Non–patient care activities include expert witness duties, product sales, speaking engagements, and other activities. They are followed by urologists, plastic surgeons, and dermatologists ($26,000 all). Those who make the least in this category are radiologists ($6000), pediatricians ($7000), and anesthesiologists ($8000). Physicians (and notably primary care physicians [PCPs]) who are at the lower end of patient-work compensation also tend to trail in non–patient care compensation.

Data from a major 2009 study suggested that, at that time, PCPs earned a cumulative average lifetime income of about $6.5 million compared with over $10 million for specialists.[3,4] The study reported a gap of more than $135,000 separating the median annual subspecialist income from that of PCPs, and that the gap had widened steadily since 1979. According to this year's Medscape survey, the average mean compensation for a PCP is $195,000 and for a specialist is $284,000, a difference of only $89,000. Of course, one cannot assume improvement based upon a comparison of these two differently conducted reports, although they might provide some reason for optimism.

When comparing compensation in this year's Medscape report vs the prior year's, family physician compensation increased by 10% and internist earnings by 4%. It should be noted that most other physicians reported an increase as well, with the greatest increases appearing among infectious disease physicians (22%) and physicians who work mostly in hospitals: pulmonologists (15%) and emergency medicine physicians and pathologists (both at 12%). Only rheumatologists experienced a large decrease in income (4%). Urologists were the only other specialists to see a decline, but by only 1%.

The Regional Disparities

In setting Medicare fees, the challenge for the Centers for Medicare & Medicaid Services (CMS) is to address the higher cost of living in certain areas against the need to attract physicians to underserved places with a lower cost of living. Fee-for-service Medicare payments are adjusted for geographic differences in costs associated with physician work, practice expense, and malpractice insurance. Policy adjustments are also made; for example, compensation may be higher depending on physician shortage in certain areas. These calculations are adjusted every 3 years and can present difficulties for physicians. For instance, if fees in one region go up, budget neutrality requires that another region's fees must go down to balance out the costs.[5]

As a result of these policies, surveys indicate that higher incomes are found in poorer regions.[6] In line with this, the three top-earning states in this year's Medscape report are North Dakota and Alaska ($330,000), and Wyoming ($312,000) (Figure 1). The lowest-paying locations were the District of Columbia ($186,000), Rhode Island ($217,000), and Maryland ($237,000)—all on the East Coast, where nonphysician incomes in general are higher than in other parts of the country.[7] In fact, the only non-Eastern states in the bottom 10 were New Mexico and Utah.

Figure 1.

Average compensation by state.

The Gender Disparity

This year, as in all previous years of the report, male physicians are earning more ($284,000) than their female counterparts ($215,000). According to our survey, a majority of women choose the lower-paying specialties. For example, 50% of pediatricians are women and 35% of internists are women, but only 9% of orthopedists are women and only 12% are cardiologists. The overall percentage advantage of men compared with women has decreased only slightly since the 2011 Medscape report, from 28% in 2011 to 24% this year.

The gender disparity between men and women does not vary much between self-employed (23%) and employed (22%) physicians, but it does by specialty (Figure 2). In the current survey, the percentage differences between men and women ranged from 9% (gastroenterologists, radiologists, nephrologists, and pathologists) to 28% (plastic surgeons and general surgeons).

Figure 2.

Percent difference between male and female physicians by specialty.

Nearly a quarter (24%) of female physicians who responded to the survey work part-time compared with only 13% of men, although the earnings reported are for full-time workers only, so this would not explain the disparities observed in this survey. The survey, however, did not control for hours worked, and data suggest that even women who are full-time work fewer hours each week and see fewer patients than their male colleagues, which might contribute to the compensation disparities reported.[8,9]

It should be noted that, given the disproportionate number of part-time female physicians, the shorter hours, and the growing physician shortage, the increasing number of part-time female physicians raises concern, particularly because nearly half of all medical degrees are now being earned by women.[9]

The Employment Disparities

In this year's Medscape report, 63% of physicians said they are now employed, with less than a third (32%) in private practice. This follows the trend reported by a major physician recruiter, which revealed a hospital employment rate of 11% in 2004, rising to 64% in 2014.[10]

Employed PCPs make an average of $189,000, which is only $23,000 less than the average reported by their self-employed counterparts ($212,000). However, PCPs make far less than the average specialist, whether employed ($258,000) or self-employed ($329,000). Gender might affect the disparity among employed vs self-employed physicians, with 72% of women and 59% of men responding that they worked for a salary. Slightly over a third of men (36%) and about a quarter (23%) of women are self-employed. (In the 2014 Medscape report on employed physicians, only 22% of physicians who reported self-employment were women).

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