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Are Doctors Underpaid?

Phillip Miller, for HealthLeaders Media, July 17, 2008

For the last 15 years, Merritt, Hawkins & Associates has been reporting on the salaries offered to recruit physicians, and our most recent Review of Physician and CRNA Recruiting Incentives reveals an interesting new development. In the last year, salaries offered to recruit certified registered nurses anesthetists (CRNAs) were higher than salaries offered to recruit primary care physicians. On average, CRNAs were offered $185,000 a year, compared to $172,000 for family practitioners. CRNAs also were offered more income, on average, than general internists, pediatricians and hospitalists.

The fact that nurses (albeit it those with advanced training) are paid more than some physicians is eyebrow raising and has sparked a good deal of heated online discussion. Some physicians argue that CRNA salaries demonstrate how relatively poorly doctors are paid, while non-physicians maintain that the six-figure salaries doctors earn are nothing to complain about regardless of what CRNAs make.

Do physicians who maintain that they are underpaid have a case? Or should doctors be happy with their current earnings?

First, consider average salaries being offered to physicians in various specialties as reported in Merritt, Hawkins' 2008 Review:

  • Orthopedic surgeons: $439,000
  • Radiologists: $401,000
  • Cardiologists: $392,000
  • Urologists: $387,000
  • OB/GYNs: $255,000
  • Psychiatrists: $189,000
  • Hospitalists: $181,000
  • General internists: $176,000
  • Family practitioners: $172,000
  • Pediatricians: $159,000

One point brought home by these numbers is the striking disparity between the pay of primary care physicians and surgical and diagnostic specialists. Current payment systems reward physicians who perform procedures at a higher rate than physicians who employ cognitive and consultative skills. This is one reason why fewer medical school graduates are choosing primary care, fueling a shortage of primary care doctors that some observers feel could soon reach crisis proportions.

Independent of disparities between specialists, most physicians earn upper middle class incomes, while a few doctors are outright millionaires. Apparently, some people are not happy with this state of affairs, since the pressure to cut physician reimbursement is unremitting. The government and private payers wouldn't find cuts quite so easy to impose if the public at large objected. There is little demonstrable outrage, however, over declines in physician reimbursement.

Maybe there should be.

Many doctors can argue with some justification that they are underpaid. Eleven or more years of collegiate and post-collegiate training set a high bar to professional entry, particularly when they result in $150,000 or more in debt, as often is the case. Once in practice, physicians shoulder an extremely high level of professional responsibility, are highly scrutinized and regulated, and are frequently sued by patients expecting results that cannot reasonably be achieved.

While some might question the value to society of stock brokers, lawyers, or even public relations executives like me, the benefits physicians bring to society are beyond dispute. By delivering, enhancing, and prolonging life, and by easing its passage, physicians provide a service worthy of considerable reward.

Of course, money itself is not the only, or even the primary, sticking point for many doctors—empowerment is. Unlike just about everyone else trying to earn a living, most of you reading this cannot raise yours fees when your cost of doing business rises. Unlike the rest of us, you cannot even submit a bill with any expectation that it will be paid. Perhaps most frustrating of all, you cannot suggest a course of treatment for your patients with the assurance that it will be approved by someone with far less medical training. Little wonder that many doctors feel powerless and marginalized.

The upshot is that a growing number of physicians are looking for a way out, either by retiring, finding non-clinical jobs, limiting access to their practices, working part-time, working as temps or circumventing third parties through direct-to-patient contracting.

Despite prevailing notions, medical practice today often is inequitable to doctors, and many physicians are not as well off as the public may perceive. For every plastic surgeon making millions from elective cosmetic procedures, there are dozens of primary care doctors unable to afford the cost of implementing electronic medical records or even raises for their staffs.

This is not a good prescription for attracting the best and brightest people society has to offer to a profession that eventually affects all of us in a profound way.

These reimbursement woes are one of the drivers of a looming nationwide physician shortage, and payment disparities have already made primary care physicians scarce in many areas.

If you believe physicians are overpaid now, wait until no one wants to be one. That is the point at which we will all be paying a high price, not only with our wallets, but with our health.


Phillip Miller is vice president of communications for Merritt, Hawkins & Associates, a national physician search firm and a division of AMN Healthcare. He can be reached at pmiller@mhagroup.com.

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