Analyzing the 2024 Doximity Physician Compensation Report

Recently, Doximity published its 2024 physician compensation report. I always love going through this data, looking for trends and any sort of insight. Obviously, a major goal of mine with The Prudent Plastic Surgeon is to share my ongoing journey to financial freedom with a goal of helping all physician improve their financial well-being. I truly believe that a nation of financially free doctors would change healthcare for the better in amazing ways.

So, with that in mind, let’s see what the data for 2024 tells us…

Analyzing the 2024 Doximity physician compensation report

I’ll start with some overall trends before getting into the nitty gritty.

Overall compensation trends

In 2023, average doctor compensation increased by nearly 6%. This is a huge difference from 2022 when doctor pay actually contracted by over 2%.

While this is great for 2023, overall trends still do not favor physicians. Inflation is coming more and more under control. However, throughout 2022 especially, it ran rampant. With these inflationary pressures, doctor compensation has seen very minimal real growth.

This trend is then coupled with the fact that Medicare physician payment has decreased by 26% since 2001. Sustained compensation increase from physicians seems unlikely.

With this in mind, it’s important to remember the basic formula to build wealth: increase and invest the margin between what you earn and what you spend. With compensation appearing static, physician side gigs and other alternative streams of income become more important along with the implementation of intentional spending to limit expanses.

Compensation trends by region

It’s interesting to see that overall compensation broke down somewhat along geographic regions.

As you can see above, 7/10 areas with the highest compensation are on the west coast. Two more are Midwest while 1 only is along the east coast (Charlotte, NC).

However, an important factor is not taken into consideration in the charts above…cost of living.

When we study the map below, we see compensation adjusted for cost of living. As we might expect, lower compensation/COL clusters on the west and east coasts. Meanwhile higher ratios live in the middle of the country.

This is not surprising given the relatively lower overall compensation on the east coast we observed earlier. But we can see just how out of hand cost of living has gotten on the west coast where the ratios remain low despite overall increases in compensation.

Given these data trends, geographic arbitrage like Selenid and I used becomes a powerful strategy for accelerating your path to financial freedom…

Compensation by specialty

I always think this is one of the most interesting and also controversial portions of these reports.

Here are the results:

As noted in the Doximity compensation report itself, these trends in specialty compensation have stayed pretty consistent over the years.

In general, specialists get paid more. If you broke this graphic down by years of training, we would see that more years generally correlates with higher pay. Usually, but not always.

I have a privileged vantage point of this data as plastic surgeons are consistently in the top 3 of speciality pay. And in fact, after my recent contract negotiation (more on that later), I find myself above this average, even as a plastic surgeon who focuses on insurance based reconstructive cases.

Is it fair that plastic surgeons are compensated more than pediatric pulmonology or any other of the right hand column specialities. No way!

But, as I’ve talked about before, compensation in our society is not based on what is fair or even the most important. It’s based on how many people can do it. The less people that can do what you do, the more you are paid. That’s why these trends correlate with years of training. Not as many people want to train longer.

Either way, it’s also important to remember that intra-specialty pay in medicine tends to be even greater than inter-specialty pay. These are the 3 reasons why that is and what you can do to improve your compensation!

But things may be changing…

Here are the top 10 specialties with the largest increase in average annual compensation:

Of these specialities, only 3, including plastic surgery, are in the top 10 overall compensation list. The rest are in the right hand column above, including family medicine, a perpetually undervalued specialty.

I attribute this to better alignment of value as well as doctors within these fields improving in recognizing their value and negotiating to meet their value.

Gender pay gap

Here’s another hot button issue that I also can only talk about from a perspective of privilege as I reside on the higher compensated end.

The gender pay gap in medicine decreased from 26% in 2022 to 23% in 2023 according to the Doximity compensation report. A decrease is of course good. But the overall gap is still pretty astonishing. Especially considering that this results in an average pay gap of ~$100,000 annually.

For a female attending fresh out of training and planning to work 25 years, that $100,000 difference invested each year with a modest real return of 5% results in over $4 million!

Interestingly, orthopedics had the greatest gender pay gap while pediatric genetics had the smallest.

But how do we feel about this?

There are many reasons this gender pay gap could exists. Women could work less due to family responsibilities. Women may not negotiate as much as men. Or women could just be discriminated against in the work place.

None of those reasons are valid.

But there is an issue. In the Doximity compensation report, they includes a poll of men and women that I’ll share below asking if they believed a gender pay gap existed:

Well, the data shows in a very real way that it exists. So ignorance of it on the part of my sex may be one of the bigger reasons for its existence in the first place.

Medicine needs to come to the forefront and aggressively work on fixing this.

Doctors’ feelings about their compensation

This hard data is great. But how do doctors see their compensation?

As we can see, the majority of doctors are not happy with their compensation and do not believe their compensation reflects their value.

As an interesting side note, an equal percentage of men and women demonstrate satisfaction with their compensation (around 40%).

Anyway, some of this can be chalked up to the axiom that no one is ever happy with their compensation. Some of it can be attributed to the fact that doctors notoriously spend up to their salary and therefore also feel they need more.

But some of it is also the fact that many doctors are not compensated up to their value. I am satisfied with my pay. But I also worked very hard to define my value in these ways, track my value, and then negotiate my contract very aggressively.

As we see from the below poll, many doctors did not do this!

An astonishing 39% of doctors have never negotiated or re-negotiated their salary package. They just took what the employer offered! Moreover, greater than 50% only had partial success.

This is a travesty.

Every doctor needs to be able to concretely define their value and should negotiate to reach that value as closely as possible. If your practice does not support this or an employer will not meet this, a change is likely necessary.

Here are some tips for doctor contract negotiation: How to Negotiate Your Physician Contract

These are the steps we need to take as a field!

What do doctors want to see change?

In this 2024 Doximity compensation report, 80% of polled doctors feel overworked. As a result many are looking for a change or thinking of leaving medicine altogether.

Also within the poll, doctors identified factors that would improve their work. The top three things identified were:

• Reduced administrative burden,
• Increased compensation, and
• Reduced patient load

These all make sense. And there are actions we can all take to improve these. For example, Doximity offers incredible tools like an AI scribe to reduce the burden administrative tasks.

However, at a certain point even these “dream changes” are a bit antithetical. If we reduce patient load, we provide less value. And thus our compensation will decrease. If we increase compensation, we will need to increase patient load. It seems we could have only one or the other.

At least that is what healthcare systems and insurance would like us to believe. But it is not truly the case!

Doctors bring value beyond just the widgets that we create (patients that we treat). And even then, our widgets are more valuable than what we get on the market currently. As a field we need to continue working together to demonstrate this value and achieve it.

However, I’ll go back full circle to the beginning of this post

As physicians, no matter where we are in the pay spectrum, we are high income earners. And while many of these variables may seem and somewhat are out of our control, one thing is in our control.

That is our ability to create and achieve financial freedom.

Imagine if you were financially free right now. That you could practice medicine because you want to, not because you have to. Imagine you can reduce your workload – including patient load and administrate tasks – without worrying about a decrease in compensation. Now imagine you could leave a toxic job and find a better one without worrying about the need to make money.

All of a sudden, you would be able to take back control of your professional life. And a nation of doctors like this could take back control of healthcare in general!

Final thoughts on the 2024 Doximity physician compensation report

Some things look like they are slowly improving for physicians in terms of compensation. Overall pay is up. The general gap is decreasing. The middle of the country is seeing excellent compensation/cost of living ratios.

However, lots of work remains to be done. Doctors are overworked and systemic change does not appear to be imminent.

The important and encouraging things however is that we now have this data. And with this knowledge we can join together to start making changes as a field. You can see the full 2024 Doximity compensation report here.

In the meantime, we can also work hard at an individual level to improve our own financial well-being and take back control of healthcare!

Here are some resources to help:

• How Much Is Enough Retirement Savings?
• Physician Side Gigs to Make You Passive Money
• Building Your Investment Waterfall as a Physician
• Is Decision Fatigue Responsible for the Bad Financial Habits of Doctors?

What do you think? How do you analyze the 2024 Doximity physician compensation report? What’s the good? And the bad? Let me know in the comments below!