Physician Incomes Keep Rising, Albeit Modestly, Report Shows

Megan Brooks

April 11, 2018

Primary care and specialty physicians in the United States have seen a modest increase in earnings this year over last year, according to the Medscape Physician Compensation Report 2018.

Overall, the increases reflect a continued rise in physician income over the past 7 years. While there are multiple factors at play in this upward trend, the main reason still comes down to the basic rules of economics.

"The fact remains that the physician workforce is relatively stagnant in terms of growth and that demand for physician services keeps rising. The result, inevitably, is more spending and higher incomes for physicians," Tommy Bohannon, vice president of Merritt Hawkins, a physician recruiting firm, told Medscape Medical News.

The overall average physician salary — including primary care and specialties — sits at $299,000. The average salary for primary care physicians is $223,000, compared to $217,000 in 2017. For specialists, it's $329,000 this year, compared to $316,000 last year.

Last year's top-earning specialties are among the top this year. Plastic surgeons, who have experienced a boom in recent years, have the highest average annual salary of all specialties ($501,000), followed by orthopedists ($497,000), cardiologists ($423,000), gastroenterologists ($408,000), and radiologists ($401,000).

The lowest-earning specialties are internal medicine ($230,000), family medicine ($219,000), diabetes and endocrinology ($212,000), pediatrics ($212,000), and public health and preventive medicine ($199,000).

As in prior years, male physicians are earning more than female physicians. Male primary care doctors earn $239,000, almost 18% more than women ($203,000), while male specialists earn $358,000, about 36% more than female specialists ($263,000).

In this year's survey, as in last year's, white physicians earn the most ($308,000), and African American physicians earn the least ($258,000). Asian physicians earn an average of $293,000, and Hispanic/Latino physicians earn $278,000.

Who's Up, Who's Down? Is It Fair?

Psychiatrists are seeing the biggest gains in compensation this year (+16%). "We have never seen demand for psychiatrists this high in our 30-year history," said Bohannon. "Demand for mental health services has exploded, while the number of psychiatrists has not kept pace. The short version is that aging produces many mental health challenges, including dementia and its associated pathologies, and that societal ills, such as the opioid crisis, are driving the need for more mental health professionals."

Other specialists enjoying notable increases in pay are plastic surgeons (+14%), physical medicine and rehabilitation specialists (+13%), oncologists (+10%), and rheumatologists and critical care specialists (+9%). Specialties seeing declines in compensation include general surgery (-9%), urology (-7%), otolaryngology/diabetes and endocrinology (-4%), and pathology and neurology (-2%).

As in prior years, in 2018, self-employed physicians earn more than employed physicians on average ($356,000 vs $277,000). Twenty-six percent of respondents this year said they were self-employed, and 69% said they were employed. More male than female physicians are self-employed.

Overall, 55% of physicians feel that they're fairly compensated. Emergency physicians (74%), pulmonologists (70%), dermatologists (70%), and public health and preventive medicine doctors (69%) are among the physicians who feel the most fairly compensated.

For the third year in a row, physicians cited "gratitude/relationship with patients" as the most rewarding part of their job (27%), followed by "being very good at what I do/finding answers, diagnoses" (24%). This year, "knowing that I'm making the world a better place" was a larger factor (23%) than it was last year, when only 12% cited it as most rewarding.

What's the most challenging part of being a physician? Having so many rules and regulations top the list (27%), followed by long work hours (16%), dealing with difficult patients (15%), having to work with an electronic health record system (13%), and difficulties getting fair reimbursement (12%).

The amount of time physicians are spending on paperwork and administration has become mind-boggling. More than a third spend between 10 and 19 hours a week on paperwork; in total, nearly three fourths (70%) of physicians spend more than 10 hours per week on paperwork and administrative tasks. In 2017, that percentage was 57%. As for time spent with individual patients, most physicians (62%) reported spending between 13 and 24 minutes with each patient (not including psychiatrists), which is the same as last year.

Despite the challenges, medicine remains a desirable profession. Overall, 77% of physicians said they would choose a career in medicine again. However, only 62% of physicians overall would choose their specialty again. Orthopedists, plastic surgeons, radiologists, and oncologists were among the leaders in again choosing their current specialty (95%+). Nearly three quarters of primary care doctors would choose their own specialty again.

Are ACOs Falling Out of Favor?

In 2018, nearly three quarters (73%) of physicians participate in an insurance-based payment model, 38% in a fee-for-service model, and 27% in an accountable care organization (ACO). While participation in ACOs increased from 3% in 2012 to 36% in 2017, this year's survey results align with industry data that show waning interest in ACOs.

"The model has not yet proven that it can consistently enhance efficiency and improve outcomes while achieving the savings that participating physicians can share in," commented Bohannon of Merritt Hawkins. "There is still work to do when it comes to convincing physicians of the efficacy of the ACO model." This year, only 2% of physicians work in a concierge practice; 5% work in a cash-only practice.

The cost of treatment has become a major issue, particularly when options differ greatly in cost. Forty percent of physicians surveyed this year said they regularly discuss the cost of treatment with their patients, 45% occasionally do, and 15% never discuss cost.

The Medscape Physician Compensation Report is the most comprehensive and widely used physician salary survey in the United States for the eighth year in a row. This year, more than 20,000 physicians in over 29 specialties responded to the Medscape compensation survey. Respondents were required to be currently practicing physicians in the United States. The data were collected via online survey.

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