This year, I’ve been awaiting the results of this report with extra interest given the unique circumstances occurring in 2020 including COVID-19 and others (it’s best not to rehash them all I think…).
What did the Physician Compensation Report show?
Here are the main hard-hitting points:
- Average national physician compensation in 2020 was $383,340
- This represented an increase in physician compensation of 1.5% compared to 2019
- The gender gap in pay increased to 28% in 2020 from 25.2% in 2019
- Female physicians are paid on average $116,289 less than their male counterparts in 2020!
Whew, there’s a lot to unpack there so let’s get right into it…
What the Physician Compensation Report says about doctors’ pay
First, no one is going to be crying for physicians. I totally get that. An average annual salary of $383,340 puts anyone in the top 1% of compensation nationally. As I’ve said before, if you can’t live comfortably and reach financial freedom with a salary that high, you have a spending problem, not an income problem. (Thankfully, the fix to this is easy using my simple system.)
But remember, not all doctors are making this salary, it’s an average. That means 50% are making less.
But, let’s dig into the numbers a bit. Because to leave it at this doesn’t do this great data set any justice.
Physicians lost money in 2020
Yup, I did say earlier that compensation increased 1.5% from 2019 to 2020. And I also did just say that doctors lost money in 2020.
How can that be?
Easy answer: The Consumer Price Index inflation rate over the past year was 2.3%.
Simply put, the increase in physician compensation did not keep up with the rate of inflation. Doctors lost real money, or purchasing power.
Why did doctors lose money?
This is not a simple question to answer, obviously.
However, it is a bit grating that physicians lost money during a time period when a huge number of them were on the frontlines defending our country and world during a pandemic.
It is also interesting that healthcare costs constitute a significant part of the rising rate of inflation. But these rising costs are obviously not passing to physicians.
The obvious answer is that the pandemic resulted in significantly decreased “elective” procedures and treatments being provided by hospitals and medical centers/offices. Thus, there has been decreased reimbursement leading to decreased compensation.
Unfortunately, I think this trend of decreasing compensation identified in the Physician Compensation Report may just be the tip of the iceberg as there tends to be a lag effect with these kinds of things.
What does this mean for you as a physician?
Data that is not applied is useless. (Maybe an overstatement but I’m making a point, OK?)
What I mean is that in this case, if we don’t try to use these numbers to better ourselves, then the effort of those involved in creating the report is pretty much in vain.
So, what do the numbers mean to me?
To me, the first thing that smacks me in the face is that financial well-being for physicians is more important now than ever.
What leads to burnout and moral injury? Feelings of lack of autonomy, control, or perceived ability to make a difference, just two name a few
Well, we are in the middle of a pandemic, many doctors face increasing regulation and responsibilities from administrations with little say of their own, and their compensation has at best effectively decreased and at worst been cut significantly or lost totally.
That’s a recipe for burnout if I’ve ever seen it.
How can we combat these compounding issues?
In my mind, financial well-being is the answer.
Let me get out in front: I’m not saying that we should reach for financial freedom to all of a sudden quit the game and get out of medicine.
Quite the contrary.
I’ve expressed many times how even just creating a path to financial freedom has made me a better doctor. It allowed me to focus more on the patients and the reasons I got into medicine rather than worry about making ends meet or what would happen if my pay decline (or evaporates).
So, here are my recommendations for you:
- Start your financial education
- Come up with a written plan for financial freedom
- Make sure you are saving enough for retirement
- Consider pursuing a physician side gig to make passive money
- Develop the simple habits that will make you financially successful
A nation of financially well and free physicians empowers itself to make the changes necessary to improve healthcare in our country.
Deep breath. Let’s talk about the gender gap
Disclosures: I am a white male.
But these findings of the Physician Compensation Report really surprised and upset me.
A gender gap of 25% is absurd (as it was in 2019) but at least it had been improving. And now to see a regression to a gap of 28.2% is a real kick in the gut.
I wish that there was a way to parse things out more to determine the etiologic factors contributing to this widening of the gap (beyond the standard issues female physicians have been battling for decades).
Unfortunately, this is not possible with such a large and heterogenous data set.
But what I will say is that Doximity is doing a huge favor to female physicians.
Armed with this data, you have evidence to bring to administrators, especially at the time of contract negotiation. You now know what fellow physicians in your specialty are making, both males and females. And you obviously know what you are making or what they are offering you.
Take the data to your administrators, negotiate aggressively, and get compensated fairly!
(Here are some tips to help in your next contract negotiation.)
Let’s review some other interesting data from the Physician Compensation Report
- I was shocked (in a good way) to see my city, Buffalo NY, as the metro area with the 4th highest average compensation (behind Milwaukee, Atlanta, and Jacksonville)
- I was shocked (in a bad way) to see Buffalo, NY nowhere in the top 10 for metro areas with the highest average compensations for female physicians
But, enough about me.
- The top 5 cities with lowest average physician compensation were: Oklahoma City, Hartford, Memphis, Virginia Beach, and Providence.
Compensation by specialty
- The highest compensated specialty was neurosurgery at $746,544 (Plastic surgery was 4th with $539,208).
- The lowest paid specialties were preventative medicine ($234,587) and pediatrics ($243,253).
- Isn’t a pound of cure worth an ounce of prevention? Rhetorical question…
- Vascular surgery, rehab medicine, geriatrics, genetics, emergency medicine, and oncology all saw an increase in compensation over 4%.
Compensation by gender
- The two specialties with the largest gender gap were ENT ($493,888 for males vs. $384, 983 for females) and orthopedic surgery ($614,447 M vs. $491,770 F).
- Nuclear medicine and hematology had the closest gender pay gaps (although women had equal or better pay in no specialties).
Compensation by practice type
- Last, multi-specialty group (followed by HMO and Industry) was the employment type with the greatest increase in compensation.
- The worst practice employment pay growth was the government (preceded by hospital and academic).
Where do we go from here?
It is easy to look at these numbers and dismiss them as out of our control.
How can we control administrators?
No one could have predicted COVID-19.
What am I supposed to do?
These superficial responses take the locus of control away from us, the physicians, and put it onto external factors. This is not the response that I hope you take.
The Doximity Physician Compensation Report is empowering
In fact, the way I see it, the report gives physicians even more power and control than ever before. How can we better ourselves and our systems in the dark, without knowledge? We can’t.
The locus of control rests with us. We can become better doctors by improving our financial well-being using this knowledge. We can improve the system by negotiating from a position of power as financially free doctors.
No matter where you are in the process, it is never too late. There are innumerable amazing resources available to you including many on this blog.
Get started today!
What do you think? What do the findings of Doximity’s Physician Compensation Report mean to you? Have you started your path to financial well-being? Why is the gender gap increasing? Share your thoughts in the comments below!
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