Tuesday, April 8, 2008

Physician incomes - Income Comparisons

Whenever one talks to physicians about comparitive incomes and their standing in the economic scheme of things, sooner or later they come around to comparing themselves to professionals in other fields. These fields most commonly include sports figures, corporate executives, and hospital CEOs – fields where formal educational requirements are far shorter and less stringent than in medicine. Sometimes stock brokers and other financial types are mentioned. For good reason. According to Bloomberg News, the average Wall Street bonuses for 2007 exceeded $200,000 pr person.

Never mind that these other professionals function in different environments. Or that comparing physicians to these high-earners, matches apples against oranges.
The market judges sports figures by the television revenues and crowds they attract; corporate executives by the magnitude of enterprises and revenue they oversee; and hospital CEOs by what their boards, stacked with local businessmen, deem they deserve.

Physicians, on the other hand, generally practice on a one-on-one basis, making life and death and health decisions, in what critics often deride as a “cottage industry,” as indeed it most often is. You don’t attract hordes of fans, employ or oversee thousands of workers, or supervise sprawling health care enterprises.

Third parties, interested in containing costs, decide what physicians should be paid. Doctors generally enter medicine not for the money, but for the mission. A large element of altruism and idealism remains. Still, educational debts, malpractice premiums, staff, and college tuitions must be paid. Doctors are human. They want to enjoy the simple luxuries as much as other folk, and they want to do well while doing good.

This week newspapers published average salaries in other fields.

• Major league baseball players. $5.1 million, up 7.1%

Source: USA Today, April 2

• Corporate executives of 200 large companies, $11.7 million, up 5.0%

Source: New York Times, April 6

• CEOs of top ten hospital systems, $5.9 million, no comparison to
previous years

Source: Wall Street Journal, April 4.

I unearthed comparable figures for doctors and found these numbers,

• Average primary care incomes, 1995 to 2003, $121,000, -10%\

• Average specialty incomes, 1995-2003, $175,000 -2%

Source: American Medical News, July 24/31, 2006

These income figures seemed low to me, so I sought later figures being offered to physicians being recruited.

Income offered to top 15 recruited specialties in 2006.

1l Internal Medicine, $162,000
2) Family Medicine, $145,000
3) Radiology, $351,000
4) Orthopedic Surgery, $370,000
5) Cardiology, $342,000
6) General Surgery, $272,000
7) Hospitalist, $175,000
8) OB/GYN, $234,000
9) Gastroenterology, $315,000
10) Emergency Medicine, $230,000
11) Urology, $320,000
12) Anesthesiology306,000
13) Psychiatry, $174,000
14) Neurology, $210,000
15) Otolaryngology, $272,000
Average, $258,000, -1.1%

Source: Merritt, Hawkins, & Associates, Guide to Physician Recruiting (Practice Support Resources, Inc, www.practicesupport.com, 2007)

On the whole, physicians have nothing to complain about except their incomes remain flat and don’t keep pace with inflation. Except for some doctors on the lower rungs of primary care, doctors are still among society’s top earners Also we’re comparing here average incomes of physicians to top incomes of people in their respective fields. Markets drive incomes in other fields. In medicine, third parties like Medicare and health plans call the tune. Finally, it is unclear what top earners in medicine make, although I doubt their average top income exceed $1 million on average, at least I have never seen figures to that effect.

After all is said and done, this little comparative exercise , flawed as it certainl is, has some utility. It puts matters in context. Also note that ambitious young Americans are sharply aware of these differences in earning potentials. This may be why our best and brightest often select entrepreneurial, financial, technological, and managerial fields over medicine.

1 comment:

Gary M. Levin said...

Dr Reece, you have summarized the financial aspects very well regarding comparative income....some physicians increase their income by leveraging their facilities, insurance contracts and reputations by hiring other physicians to work for or with them. CEOs may have to answer to board's of directors. Physicians have to answer to state medical boards, patients, insurance carriers, CMS, malpractice insurance, Specialty societies, Maintenance of Certification, and if they run their practice business, the convoluted arena of tax management, attorneys, maintaining priveleges, attending mandatory staff meetings, to say nothing about giving up family and personal time for being on call.