Every year when I discuss these reports, I point out that physicians ultimately control most of the spending in our health system and they are the primary determinants of your quality of care. Keeping them happy would seem to be important. Maybe piling increased regulatory and paperwork burdens on them isn’t a good idea. At least they are generally paid well, although many younger doctors have high student loan burdens. Doximity, a health IT company, has released a report on current compensation for physicians.
Overall, from 2023 to 2024 physician compensation rose 3.7%, a decline from the 5.9% increase in 2023 compared to 2022. A gender gap continues to exist with male doctors experiencing a 5.7% rise while female doctors saw only a 1.7% increase. This gap is largely explained by differences in working hours and difference in gender composition in various specialties. If you wonder why health care is so expensive in Minnesota, here is one reason, Rochester, Minnesota, home of the Mayo Clinic had the highest average physician compensation, $495,500 and also saw compensation grow by 8.7%.
St. Louis, Los Angeles, San Jose and Sacramento were all in the top five metro areas for average compensation and California has five of the top ten urban regions. The region with the lowest average doctor pay was the Durham, North Carolina, at $358,800. Other lower pay regions include Rochester, N.Y., Ann Arbor, Charleston, South Carolina and DC. No low average compensation region is in the western or even midwestern US. Cost of living can impact how far pay goes. Taking that into account moves all the California areas out of the top ten, replacing them with some Midwestern cities like Oklahoma City, Omaha and Kansas City. The lowest average pay after this adjustment is in Boston, DC, Seattle and Denver. Government payments to doctors for programs like Medicare and Medicaid tend not to have kept up with inflation, one estimate is that after inflation Medicare payments have dropped 33% since 2001.
Specialists are tending to see the highest average pay, with neurosurgery topping the list at $749,000, followed by several other surgery specialties–orthopedic, pediatric and plastic surgery. Among common specialties, cardiology weighs in at $587,000; urology at $559,000 dermatology at $508,000 and oncology at $505,000. At the other end of the spectrum pediatric endocrinologists are at $230,000 and the four bottom are all pediatric specialties, which seems crazy to me give how important children are. Also low are medical geneticists at $259,000, also surprising given the prevalence of genetics in medicine now; endocrinologists at $290,000, surprising in that these are the people treating diabetes, geriatrics at $291,000, surprising given the aging population and the family and general medicine disciplines at $319,000. We are overpaying surgeons and procedural doctors and underpaying those who are doing preventive medicine.
The good news is that some of the preventive specialties saw the highest increases in pay in 2024. Overall this pay gap has declined modestly in the last few years. Doctors in single specialty or multi-specialty practices had the highest average compensation, those working for government, the lowest. Doctors are concerned about the state of the profession, with many of the concerns revolving around compensation but also due to over-work and personal life balance issues. The work burden is partly due to physician shortages in certain specialties or geographic areas. (Dox. Rpt.)
I have noted before that part of our higher costs in the US is due to paying our physicians considerably more than they would earn in other countries. But I would be reluctant to change that compensation level due to their importance in the system.