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Giving Context to Recent Physician Compensation Data

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The physician-payment numbers Medicare released in April are what’s known as “decontextualized data,” writes James Hamblin at The Atlantic. These numbers implied that many physicians are millionaires, in some cases thanks to Medicare Part B.

Hamblin makes four points about physician pay that are well-worth remembering, especially for the job-seeking physician.

First, the numbers taken on their own lack context, since “they represent revenue, not profit.”

“Like so many doctors, knowing there's a difference between revenue and profit is around the upper limit of my financial acumen,” writes Hamblin. “…According to Medscape, right now the average pediatrician makes $173,000, the average neurologist makes $217,000, general surgeon $279,000, radiologist $349,000, and, at the highest end, the average orthopedic surgeon makes $405,000.”

Second, “doctors are earning very solid salaries, once they are done with their training.”

Take note of “once they are done with their training.” This is key, since “[t]he average graduate carries a debt of $169,000. Less talked about is the salaries doctors make during their first years after finishing medical school, before they begin independent practice, known as residency and fellowship.”

Which leads us to…

Third, “Doctors are spending more and more time in residency and fellowship programs—sometimes up to a decade—but their salaries during those years (accounting for inflation) haven't increased in 40 years.”

In fact, one study, Hamblin writes, concluded that it would have been a wiser choice for a female PCP to become a physician assistant than a PCP, because her total career income would be higher.

Finally, “[i]n the face of a potentially staggering physician shortage—the Association of American Medical Colleges warns of a deficit of 130,600 doctors by 2025—people who want to go into medicine (particularly primary care) have to envisage financial viability in their grand mission.”

Physicians are a noble breed, but consider that after taxes, a doctor earning $51,000 who routinely logs 80 hours each week and only receives four weeks of vacation is really only making $13.28 per hour.

This is why you should seriously consider salary and benefits, not just in the short-term but also the long-term, prior to accepting a position, even if every other element of the job is perfect for you.

As physicians looking for jobs, how do you realistically assess what is a fair wage for your skills? What do you want to earn, and how many hours each week do you want to work to earn it?

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