Physician compensation rose just 1.5% in the past year, according to Doximity’s annual physician compensation report for 2020. Because inflation for 2019 was 2.3%, this means physicians are likely effectively earning less than they were a year prior, the report noted.
One caveat to this report is that it includes survey data from roughly 44,000 licensed physicians that was collected during a time period that spans before and after the COVID-19 pandemic started in the U.S. Doximity says roughly half of the data is from before COVID-19 and the other half is from after the pandemic began.
“We saw large swings in compensation across a number of specialties, so without a clear understanding of the data points across the time axis, this year should have an asterisk when looking at long-term trends,” says Seger Morris, DO, MBA, the division chief of Mississippi Internal Medicine Programs and internal medicine program director at Baptist Memorial Hospital-North Mississippi in Oxford.
Doximity’s 2019 report, which was released in March 2019 and included data from 2017 and 2018, noted that physician wages had “begun to plateau.” Dr. Morris talks more about why this may be happening below.
A separate physician survey from the American Medical Association focused solely on the pandemic’s impact on practice revenue. Eighty-one percent of physician practices reported that their revenue was still lower in July and August than it was pre-pandemic, with an average revenue drop of 32%. The AMA surveyed 3,500 physicians, who also reported a 28% average decrease in patient visits (including in-person and telehealth visits). At the same time that less money is coming in, physician practices are spending an average of 57% more on PPE, the survey found.
Amid this uncertainty, many physicians are wondering what to expect financially in the coming years and how to protect themselves from steep income drops. The DO spoke to Dr. Morris and another DO expert about compensation considerations during and after COVID-19.
Will physician compensation normalize?
Britton Jewell, DO, MHA, says he expects patient visits and physician compensation levels to bounce back once a vaccine is widely available.
“In my opinion, the main factor with lower physician compensation is the pandemic,” says Dr. Jewell, co-author of Field Guide to the Business of Medicine and associate medical director of clinical services at Desert Oasis Healthcare in Palm Springs, California. “Once the pandemic is over, the trend of flat compensation should reverse itself.”
Dr. Morris also doesn’t see the pandemic having a long-lasting impact on physician compensation.
“The per-encounter number is fixed in contracts and the Medicare standards,” he says. “For employed physicians, you will see contracts change to a lower base and more pay based on productivity because a lot of institutions got burned in the pandemic. In the long term, the other issue is that multiple states passed temporary provisions expanding scope of practice for nonphysician clinicians. Unless we are able to reverse those, that is going to put downward pressure on physician compensation.”
Choosing a specialty in 2020
The pandemic created greater demand for some specialties—emergency medicine, critical care—while others, particularly the surgical specialties, saw their patient and procedure volumes significantly decrease. Dr. Jewell advises medical students not take this into account when choosing a specialty.
“I always tell students I work with to choose a specialty that you absolutely love and you can’t see yourself doing anything else,” he says. “If you’re a med student looking at your whole career, I would caution you not to base your specialty choice on any factor involving the pandemic.”
Dr. Morris also says students should still try to pursue a specialty that suits their interests and their lifestyle. He notes that as the health care system continues to transition away from fee-for-service pay, the pay difference between specialties will likely get narrower, meaning the salaries of specialties like neurosurgery and orthopedic surgery may not be quite so attractively high at some point in the future.
“If every specialty was paid the same, which would you choose?” he asks.
One longstanding issue with physician compensation that will still be in play after the pandemic is the fact that Medicare does not adjust physician pay for inflation, notes Dr. Morris, who wrote about this issue more extensively last year. This problem will be particularly pressing in the coming years, he notes.
“The trillions of dollars the government printed this year are going to lead to higher inflation,” says Dr. Morris.
Protecting your compensation
Physicians who are looking to protect their compensation in uncertain times can develop additional skills beyond patient care, Dr. Morris says. Among many options, this could be an extra degree like an MPH or MBA—to learn about programs that offer a tuition discount to AOA members, go here—or it could be leadership or teaching experience.
“In the pandemic, the health system turned to physicians who were also trained in other things,” he says. “We needed physicians with public health degrees and epidemiological skills. We needed physicians with advocacy skills to make sure organizations were best-positioned to lobby to get what they needed. Medical education is also protected. People recognize that we still need to train physicians.”