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Both physicians in training and well-established physicians should stay abreast of healthcare industry trends, as they significantly impact physician compensation.
High earning potential is a huge draw for many individuals considering a physician’s career. However, earning potential is not a given and is significantly tied to industry trends. According to primary care sports medicine physician and founder of Care Money Moves, LLC, Altelisha “Lisha” Taylor, MD, MPH, both physicians in training and well-established physicians should stay abreast of healthcare industry trends, as trends can significantly impact compensation over time.
One medical trend is the increasing cost of medical school, which the Educational Data Initiative notes has seen exponential growth since the mid-1990s. Even after considering inflation, aspiring physicians pay a hefty sum to attend medical school—much more than medical students paid a few decades ago. As such, many medical students lean on loans to pay for school. According to Dr. Taylor, physicians typically graduate with loan debt upwards of $200,000, with some graduates owing up to $400,000. This leaves doctors with waning confidence that they can repay loans, resulting in many requiring federal student loan programs for forgiveness. However, such programs do not apply to all jobs, and relevant jobs—like those in nonprofit hospitals and academic centers—pay significantly less than other positions. Rising medical school costs, therefore, have led physicians to accept positions of lower compensation to be eligible applicants for loan forgiveness programs. This, in turn, could affect a doctor’s cumulative compensation.
Trends in Compensation
Physicians who elect to undergo training via fellowship face a particularly long period of medical training. Ironically, more training does not automatically equate to greater compensation. Dr. Taylor notes that the extra time devoted to training might not lead to greater compensation, as increased earning potential due to fellowship training only applies to certain specialties. What’s more, some medical fields require physicians to undergo fellowship training. One such field, mentioned by Dr. Taylor, is pediatrics. Until recently, a three-year residency was the only requirement for pediatricians wishing to work in pediatric hospitals, but current regulations require an additional two years of fellowship training. As a result, many pediatric specialists who participated in fellowship training earned lower compensation than those who did not participate in fellowship training.
Dr. Taylor also points out a growing trend of professionals looking to become nonphysician providers. According to a study published in the British Medical Journal, 26% of nationwide healthcare visits are characterized by patients speaking with either nurse practitioners, physician assistants, or other nonphysicians. This number is up from around 14% ten years ago. Hiring nonphysicians helps health systems save on patient-care costs, as an employer may hire one physician and one nonphysician (instead of two physicians) to save money. Fewer positions for board-certified physicians could hinder doctors’ abilities to negotiate higher compensation and bonuses.
Other growing trends experienced by some specialists are declines in reimbursements, increases in unpaid labor, and rising administrative burdens. According to Dr. Taylor, insurance companies seek to lower costs and raise profits by decreasing the services they reimburse. When insurance companies negotiate a pay rate down, employers often elect to lower physician compensation to make up for lost profits. With regard to unpaid labor and administrative burdens, physicians spend less time with patients when they have to tend to administrative duties. This lessens the time doctors can care for patients, increasing unpaid labor hours and decreasing physician compensation and revenue.
According to Dr. Taylor, growing administrative burdens coupled with waning reimbursement rates are just some factors contributing to the rising trend of physician burnout. Unfortunately, burnout has been the impetus for many physicians to devote fewer hours to work or, in several cases, to leave the medical field. Among those physicians, decreased compensation is frequently the final straw, as they struggle to honor financial obligations and pay student loans. Dr. Taylor emphasizes that there is a direct relationship between positive compensation trends and burnout, and the medical community would be best served to recognize it.
