Readers have seen my ambivalence about high physician compensation. Doctors have a hard job, they run up medical debt, they work hard at an emotionally challenging job. So they deserve to be paid well. But how well? The high pay, particularly for certain specialties, is a factor in our excessive health spending and health insurance costs. A new report describes some of that compensation. The report focused on 2026 compensation for specialists, who averaged pay increases above inflation, led by rheumatology at 10.4%. Child psychiatry rose 9.7% as did adult primary care with obstetrics and infectious disease was 9.6%. Adult medical specialties rose an average of 7.2%. Over the last five years compensation has risen over 25%. So we are seeing rapid growth in physician compensation, and other sources report higher utilization. The combination is why health spending is rising at a torrid pace, and is reflected in health insurance premiums. (SC Report)
It is becoming harder and harder to stay independent in medicine.
Over the last two decades, the cost of running a medical practice has skyrocketed. Rent, staff wages, technology, and malpractice insurance have all gone up with inflation. Yet, Medicare and insurance reimbursements for independent doctors have actually dropped by nearly 30% when adjusted for inflation.
Hospitals get automatic inflation adjustments every year, but independent doctors are tied to strict federal budget laws that slice our payments to balance the government’s books. When independent practices get squeezed, they are forced to sell to giant hospital chains or close their doors entirely.
The result? Patients lose their trusted local doctors, and healthcare costs go up for everyone because big hospital systems charge massive facility fees for the exact same care. I love being a doctor, and I love our community. But the system is broken, and it’s being balanced on the backs of independent physicians who just want to take care of their patients. MD, AZ
I agree and think the primary objective of the health system should be to support a strong relationship between the clinician and patient. We should eliminate private equity, hospital and insurer ownership of or employment of physicians and return to a competitive market of independent practices. I would note that the compensation numbers I am quoting are the actual pay to the physician, after expenses. I do think some specialist compensation is far too high.