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Analysis

Mayo's Structured Compensation Model Tackles Gender Pay Inequality

By John Commins  
   January 02, 2020

A review of compensation for 2,845 Mayo physicians — including 861 women — affirmed pay equity in 96% of the cases.

Mayo Clinic's structured, salary-only compensation model appears to have successfully tackled the nettlesome issue of gender pay disparity, a review shows.

A review of the compensation model — which relies on national benchmarks, standardized pay steps, and increments — for 2,845 Mayo physicians — including 861 women — affirmed pay equity in 96% of the cases, according to the analysis, which was published in Mayo Clinic Proceedings.

"Our analysis is unique and to our knowledge the first to demonstrate that a structured compensation model achieved equitable physician compensation by gender, race and ethnicity, while also meeting the practice, education and research goals of a large academic medical center such as Mayo Clinic," study first author Sharonne Hayes, MD, a Mayo Clinic cardiologist said in a media release.

"The analysis of this long-standing salary-only model was reassuring, not only that it was equitable, but that we as an organization adhere to our own standards," she said.

Gender pay disparity has long been a problem for physicians, and in some specialties it may be getting worse.

In July, the Medscape Female Compensation Report 2019 found that more than 7,000 female primary care physicians reported an average annual salary of $207,000, compared to the average $258,000 compensation for men; a 25% pay gap that widened from 18% in the 2018 survey, with women earning $203,000 compared to $239,000 for men.

The gender pay gap for specialists narrowed from 36% in 2018 to 33% in 2019, with the average male specialist earning $372,000 and the average female specialist earning $280,000.

The researchers reviewed all permanent staff physicians employed at Mayo Clinic in Arizona, Florida and Minnesota in clinical roles as of January 2017; examining each physician's pay, demographics, specialty, full-time equivalent status, benchmark pay, leadership roles and other factors.

The few physicians whose salaries were not in the predicted range were re-examined and shown to have the appropriate compensation, most often due to unique or blended departmental appointments, the researcher said.

"Of the 80 physicians — 2.8% of the total — with higher compensation than predicted by the model, there was no correlation with gender, race or ethnicity. The same was true of the 35 physicians — 1.2% — who had lower-than-predicted compensation," the researchers said.  

Mayo adopted a structured compensation model more than 40 years ago, primarily to remove financial incentives for physicians to do more than is medically necessary. The model provides no incentives or bonus pay, and non-salary compensation and benefits are consistent across Mayo Clinic venues and specialties.

More men than women held compensated leadership positions or had past leadership roles — 31.4% of men were in that category, compared with 15.9% of women — and more men than women were in the highest compensated specialties.

Mayo Clinic CEO Gianrico Farrugia, MD, the study's co-author, said achieving "absolute gender pay equity will only be realized when women achieve parity in the most highly compensated specialties and leadership roles."

“The analysis of this long-standing salary-only model was reassuring, not only that it was equitable, but that we as an organization adhere to our own standards.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

The few physicians whose salaries were not in the predicted range were re-examined and shown to have the appropriate compensation, most often due to departmental appointments.

Of the 80 physicians — 2.8% of the total — with higher compensation than predicted by the model, there was no correlation with gender, race or ethnicity.

The same was true of the 35 physicians — 1.2% — who had lower-than-predicted compensation.


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