Psychiatrists' Incomes Rise as Demand for Services Soars

Megan Brooks

April 18, 2018

Psychiatrists were in the lower half of specialists in earnings this year, but they saw the biggest gains in income (+16%), according to the Medscape Physician Compensation Report, released April 18.

"We have never seen demand for psychiatrists this high in our 30-year history," said Tommy Bohannon, vice president of Merritt Hawkins, a physician recruiting firm.

"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," he added.

At $273,000 in annual compensation for patient care, psychiatrists came in 11th from the bottom. They were sixth from the bottom last year, when annual compensation was $235,000.

Plastic surgeons are the top earners ($501,000 annual pay), followed by orthopedists ($497,000) and cardiologists ($423,000). Pediatricians and public health and preventive medicine specialists continue to earn the least ($212,00 and $199,000, respectively), according to this year's overall Medscape Physician Compensation Report, which covers US physicians as a whole. The survey included more than 20,000 physicians in over 29 specialties.

Other specialists (in addition to psychiatrists) who got big pay raises were plastic surgeons (+14%) and physiatrists (+13%). Decreases in earnings were evident in only six specialties this year, with general surgery (-9%) and urology (-7%) hardest hit.

Foreign-trained psychiatrists make more than US-trained psychiatrists (average, $308,000 vs $256,000).

Bureaucracy Major Driver of Burnout

Psychiatrists who are self-employed earn the same as those who are employed ($273,000). In addition, far more psychiatrists are now employed rather than self-employed (71% vs 19%), which reflects a national trend toward physician employment — hospitals and other entities have consolidated and absorbed private practices, and younger physicians have sought a steadier income stream and more regular hours.

However, there is some indication that the trend has plateaued, as hospitals reach staffing limits.

This year, as in all prior years, male psychiatrists earn more than female psychiatrists ($285,000 vs $250,000). Part-time work does not account for this difference.

About two thirds of psychiatrists (68%) believe they are fairly compensated, which is about the same as last year. More than half of psychiatrists feel they should be earning 11% to 25% more, and more than one quarter believe they deserve an increase of 26% to 50%.

More than half of psychiatrists report that they spend 30 to 45 hours each week seeing patients. Nearly a third spend less than 30 hours.

Bureaucratic tasks remain the primary driver of burnout among physicians. Nearly three quarters of psychiatrists (70%) report spending 10 hours or more on paperwork and administrative tasks.

What is most rewarding about being a psychiatrist? Relationships with and gratitude from patients top the list (29%), followed by making the world a better place (26%), being good at what they do/finding answers, diagnoses (23%), and making good money at a job they like (12%). Very small percentages cited pride in their profession and teaching.

Biggest Challenges

The most challenging part of being a psychiatrist is having to follow so many rules and regulations (26%), followed by dealing with difficult patients (20%), having to work with an electronic health record system (19%), having to work long hours (11%), and having trouble getting fair reimbursement (8%). Few cited worry about being sued (4%).

Despite the challenges, 83% of psychiatrists said they would choose medicine again and would choose psychiatry again.

Other key findings from the report regarding psychiatrists include the following:

  • Most psychiatrists are paid through an insurance carrier (66%). A little more than one quarter reimbursed on a fee-for-service basis (28%). Nineteen percent are paid through accountable care organizations (ACOs), and 10% have adopted the direct primary model (7%), which is gaining popularity compared with the cash-only model (9%) and concierge model (1%).

  • Of all physicians, psychiatrists have lowest level of participation in the Merit-based Incentive Payment System and Alternative Payment Models — 8% and 0%, respectively.

  • A minority of psychiatrists (26%) report that they would drop insurers who pay poorly.

  • Most psychiatrists (59%) report they will continue to take Medicare and Medicaid patients, 12% won't take new Medicare/Medicaid patients, and 17% aren't sure.

  • Increases in the number of physicians who participate in health insurance exchanges have stabilized since their introduction in 2014. There is almost no change from last year's survey in the percentage of participating psychiatrists (23%). A fair number, however, remain unsure about whether they will participate (41%).

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