Doctors make far less money than most people think

A video excerpt from The Vanishing Oath, a film directed by Ryan Flesher, MD.

The average physician salary in the United States is $146,000 — which is undeniably a lot of money at face value.

But it’s a lot less when you factor in the overhead costs that doctors incur.  And that’s not including the medical school debt which, on average, exceeds $150,000.

This clip shows how the take home pay of an average physician today can come out to less than $28 per hour.

Cutting physician salaries will save much less money than most health reformers think. They should best listen to noted Princeton economist Uwe Reinhardt who said as much in this New York Times’ letter:

Cutting doctors’ take-home pay would not really solve the American cost crisis. The total amount Americans pay their physicians collectively represents only about 20 percent of total national health spending. Of this total, close to half is absorbed by the physicians’ practice expenses, including malpractice premiums, but excluding the amortization of college and medical-school debt.

This makes the physicians’ collective take-home pay only about 10 percent of total national health spending. If we somehow managed to cut that take-home pay by, say, 20 percent, we would reduce total national health spending by only 2 percent, in return for a wholly demoralized medical profession to which we so often look to save our lives. It strikes me as a poor strategy.

Indeed.

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  • paul

    this is not one area where i would expect any public sympathy.

    oh, and i’ll pre-empt the obligatory rant about how we all drive lexuses by stating i drive a vw jetta. then again, i’m not really much of a “car guy.”

  • http://www.ptable.blogspot.com Bill Gleason

    My uncle, a specialist in adolescent psychiatry, drove a Volkswagen Beetle (the original) for many, many years…

  • PJT

    >>this is not one area where i would expect any public sympathy.>>

    Nor is it deserved, since the average 2009 medical school graduate had about $120K in student loan debt (those who graduated before 2009 averaged less than $120K in debt). The average 2009 COLLEGE graduate had about $23K in student loan debt and by many accounts has had great difficulty in securing employment (unlike medical school graduates – any unemployed physicians out there?).

  • http://www.drjshousecalls.blogspot.com Dr. Mary Johnson

    A few points for PJT:

    Why yes, there ARE un-employed physicians – for a variety of reasons that have NOTHING to do with money. There will be more.

    Since everybody is comparing notes, I drive a Camry.

    The average primary-care physician spends AT LEAST seven more years of their life training and/or in indentured servitude than the average college student – before they can aspire to the average physician salary.

    More and more of those physicians are coming out to work as employees – and, if they are unfortunate enough to work in a “right-to-work” state, can be treated no better than the average McDonald’s employee (before you sneer at my doctor-arrogance, I was one of those too) by your average hospital/practice CEO skimming his/her several-hundred-thousand-dollar salary off the top.

    When I sued my hometown non-profit hospital after getting the public-service screw, I was told by the lawyers upfront that getting ANY sympathy from the average Joe/Jane was going to be very hard – because doctors are all perceived as “rich”.

    It was true in the Courtroom and it’s been true with the MSM/blogosphere.

    • http://SemmelweisSociety.net Dr. Butler

      Thank you for your comment. Which states do you recommend? Is there a preferred order?

      If you were in college, would you choose law over medicine?

      • http://www.drjshousecalls.blogspot.com Dr. Mary Johnson

        Henry, it’s Kevin’s blog and I’m not playing 20 questions today.

        Neither law nor medicine (it’s not an either or). If I were in college right now I would follow one of my other dreams – zoology and environmental sciences.

        Unlike the days of yesteryear, it looks like there is going to be money in it for years to come.
        :(

  • http://thehappyhospitalist.blogspot.com The Happy Hospitalist

    I drive a BMW.
    Mrs Happy drives a Lexus SUV.

    But then again, I’m a hospitalist…

  • Jim

    As a subspecialist at a large Multi, I was paid $80/hr. This is about 6 years ago mind you. The residents who moonlighted were paid….$80/hr. Same as me, a subspecialist. How much does the plumber make, etc etc? At least $50-60/hr. At least. So wow, I was making little more than a plumber. Yes, as a DOUBLE BOARDED subspecialist. Like those caps? They are purposeful. Docs aren’t making that much money. The lawyer charges $200/hr.

    • Matt

      Jim,

      When you were a subspecialist, did you pay for any of the equipment you used? How about any of the staff? How about the staff’s benefits, or workers’ comp coverage? Did you have to collect from the patients you saw?

      Now, I don’t know where you live that the plumbers get that much, but you’re forgetting about overhead. When you see a lawyer charging $200/hr, you’re forgetting he’s paying the rent, the staff, the utility bills, the benefits for the staff, the costs of collection, and you’re assuming he collects every dollar. In short, you’re not comparing apples to apples.

  • patient

    I’m just a random patient, but I personally wish I could rework the healthcare system to give all doctors an annual income of $500,000 (whether they are PCPs or specialists, etc.). I realize that would be a decrease for a few, but it strikes me as a reasonable amount and one that is well-deserved by most doctors. (Some probably don’t deserve that much, but I’d be happy to let them get paid well anyway if it meant that the rest were too.)

    The hours you doctors work, the responsibility, the strain, the frustration, the expectations, the hidden demands on your family—all of that deserves generous compensation. If a reliable and high salary helps you do what you do, let’s give it to you. We need you so much. I’m sorry I have no authority to make this happen, but, in any case, it’s not true that all people want doctors to earn less than they do.

    (And who cares who drives what kind of car? I drive an ancient Honda, and it’s fine.)

    • BH

      Wow! I am a physician, and I applaud the patient above!..Thank you…I wish more people were understanding like you are, but….i sometimes avoid telling people what I do, exactly because I don’t want them to lump me in as “rich” (which I am NOT, though I wish I were :) Anyway, I had to call the plumber to fix a clogged bathroom–8pm on a thursday night–the bill???? 250 dollars cash! (take it or leave it)–well, I took it.
      So, I don’t know…I love what I do, and I am going to keep doing it…it will just be harder and harder… and I could afford to lease a BMW; instead, I drive a 10 year-old Honda (and like it quite a bit).

      Thanks again

      • Heart Patient

        BH:
        I agree with “Patient”. I think $500k would be fine with me. I see many Drs routinely, and truly appreciate what you bring to the table. I don’t believe enough of the “general public” appreciate what efforts and caring most physicians give to their patients. I’ve worked in health care finance all my life…maybe that helps in my appreciation and gratitude.

  • ninguem

    Dr. Butler “…..If you were in college, would you choose law over medicine?…..”

    For return on educational investment, MBA comes out best, law and specialty medicine tie for second, and primary care comes in a distant third. The numbers were run by accountants in a medical journal back around 1994.

    My building has two medical offices and two real estate businesses. In the parking lot, there’s no comparison. The real estate agents have the BMW’s, the jaguars, one Porche and a Mazerati no less. Subaru for this doctor, the other practice has one of those Honda CRV’s.

    I don’t begrudge the realtors their money. Why does everyone begrudge it of doctors?

    Primary care in the locum jobs BTW are about $50 an hour. I’ve done a few to make ends meet while starting out an independent practice.

    • Matt

      How can you possibly judge someone’s wealth by the car they drive? All that represents is their debt load, most of the time.

  • KP Internist

    Doctors do well, everyone. I don’t know how they came to the average doctor making 140K. Starting salary at KP NCal for a PCP is 180 with a total compensation package in the 230K range with benefits. That number seems awfully low if you include the subspecialists in the country.

    • Erin

      Doctors do well compared to the average US salary. However, when you say AVERAGE, you are talking National. It costs more to live in CA so you would expect doctors there to make a little more than the national average. Also, if you are a salaried KP doctor, you have a little less to worry about with overhead, malpractice, personal health insurance cost, etc. I think doctors are going to increasingly become salaried employees of someone just to survive the increasing paperwork and overhead costs, especially in rural towns where physicians can’t have a large practice.

  • http://dmleventhal@gmail.com Step 1 Med Student

    As a second year med student about 10 days away from taking my USMLE, I find this article and some of the comments a bit disconcerting. I would say most people might have a hard time understanding the mental turmoil that this process can produce. I’m not so sure more money is the answer, but I can say for sure that cutting salaries and stomping on the morale of this country’s healthcare workers is certainly NOT answer.

  • ralph

    Why don’t all you doctors go on strike, for a single payer system? You might not eliminate all your school debt or get the salary you think you deserve. At least you’d eliminate the high salaries of health insurance CEOs.

  • http://nostrums.blogspot.com Doc D

    Patients could care less what we make. Rightly so.

    And complaining does no good. The public’s perception is set in stone, based on stories about inverventional radiologists and the like.

    In 30 years I never made that average they talk about, and I didn’t really care. I do resent all the hassle about it–spending 20% of my time on documents and forms.

    My ride: ’99 Passat

  • weak and dizzy

    Erin,
    You would think doctors in California would make more than doctors in less expensive areas of the country but you would be wrong. I am a native Californian and physician practicing in the Southeast. To move back home I would take anywhere from a 15-30% pay cut and my cost of living would increase by about the same amount. So I stay here in the hot humid weather, waiting for retirement to possibly go back home. By the way I also drive a Camry. No Lexus or BMW for me, what a waste of money.

  • Patient

    Why would a doc in Cali make more. They have no prob recruiting docs to Cali, but Kansas (example) is another matter. Also, it may be cheaper to live in Kansas but it is more expensive to live nice in more rural areas. For example, a pool in cali costs next to nothing to maintain compared to a pool in western Kansas.

  • weak and dizzy

    Patient,
    They do have trouble recruiting docs to practice in California. Up until recently the cost of housing was a strong disincentive to relocating physicians. I have not looked for a job in California recently but a few years ago KP and others were having trouble recruiting the best and brightest due to poor pay compared to other areas of the country. As a good friend of mine who works for KP in the Bay Area says, ” They pay you in sunshine”. Good luck paying student loans, mortgages and kid’s tuition with that.

    • Matt

      This cannot be true. The key to recruiting doctors is tort reform. According to the docs, they leave every state without caps in droves. California, having had caps for 40 years, should have no shortage of physicians. If you believe the physicians that is.

  • Alice

    I read last week that the average doctor make five times more than their average patient. I don’t think it really matters what one drives. It, basically, doesn’t mean anything as far as income. We drive a new Edge, and I am guessing we make half as much as the average doctor (six kids, one income). It seems to mean nothing. Some people are cheap, and some are extravagant irregardless of their income.

    I am not sure why doctors proclaim this stuff. I care more about their empathy, skill, and care giving. I really don’t care what my doctor drives, or what his new extension on his home cost! :)

    • Vox Rusticus

      Alice, you might not care, but there are plenty of people who exercise a very curious double standard of peevishly resenting doctors while not caring a bit about what other professionals and even tradespeople earn. I never hear the resentful griping about what dentists earn. Same for plumbers and electricians.

      The only difference I can see is that the ones less resented are also the ones that commonly don’t accept any third-party payment. Go figure.

      I think making the case that doctors don’t make as much as much money as “people think” is a waste of time. No one cares what your educational debt is or how much it costs to start and run a practice. No one cares, and we should stop worrying about that. No one would suggest paying doctors more just because some other less-vetted occupation earns better.

      Refusing third-party payment might be the only way to re-connect patients with the notion of value for service, a principle that works both ways.

      • anonymous

        I think the “peevish” resentment of physician salaries may come from the fact that doctors are idealized as having a noble vocation, a calling to care for people for their own sake, and so people resent (and fear) the notion that their doctors might be motivated by money. It’s the same category into which ministers and, maybe, teachers are placed. Ministers and teachers usually make low or average salaries, however, so people aren’t inclined to throw their nobility in their face the way that they do to doctors. I think this is at least part of the dynamic of resentment. (Fairly or not, we expect to be financially screwed by lawyers. The issue of nobility isn’t even on the table when it comes to lawyers. And so they aren’t resented, just reviled.)

        I myself believe that most doctors genuinely care for and about their patients (when they aren’t too crazed and distracted with paperwork) and ALSO want to live a comfortable life outside of the hospital or clinic. It’s not a matter of one or the other. I don’t want my doctors to have any financial struggles outside of work. I want them to be happy! I consider the $$ that I give doctors not so much as fees for services rendered but as contributing to the material support of people who are leading the sort of life we all want and need. It’s more like giving alms.

        Cars don’t mean much to me so long as they don’t break down, but if a nice car makes my doctor feel calmer and happier as he or she drives to work, that strikes me as a good thing.

        • Matt

          Actually, people don’t expect to get screwed by THEIR lawyer. They expect to get screwed by their opponent’s lawyer. They typically see their lawyer as their lifeline.

          I feel for physicians, but only they can fix the cycle of dependency they created with the third party payment system. It only works if they agree to it (until the govt. institutes single payer). It may cause them some financial stress in the short term to break from it, but it will likely have huge long term benefits. To everyone.

  • KP Internist

    There is no problem recruiting doctors to come to California. I believe we get 15 qualified applicant for every job we post. The cost of living problem is not a big issue. Doctors who go to underserved areas generally get better salaries and lower cost of living. That number quoted does seem low. Most doctors don’t work in rural areas anyways. If they did, they usually get paid more (not adjusted for cost of living either). I have a friend that has a place in Kentucky where he works 1 week on and 1 week off and flies home to stay with his family in Chicago. The compensation is so much better, that it makes since for him to do this.

    • weak and dizzy

      KP,
      you might not have trouble now but I was at a meeting in SF three years ago when an MD sitting next to me saw my name tag, noting I was from North Carolina. He asked me if I wanted a job in Orange County, CA. I asked him how much his group was paying. He told me and I almost fell out of the chair laughing. I told him ,” I’m from California, I know what it costs to live out here”. He told me he was having trouble recruiting U. S. trained MD’s. Almost all of the applications he was receiving were from foreign trained MD’s. I am not bashing foreign trained MD’s, I have several close friends who are MD’s that hail from various spots on the globe. They are all good doc’s. You may not be having trouble recruiting at KP now but I know many MD’s who avoid California jobs ( and fellowships as well) due to the ridiculous cost of living there. Like I said before ” they pay you in sunshine”.

  • Matt

    Every profession is making these same complaints:

    http://pajamasmedia.com/instapundit/101311/

    And I don’t think the public feels bad for any of them.

  • family doc

    “Why don’t all you doctors go on strike, for a single payer system?”

    Ralph, you really don’t understand this do you? The current system is horrible, a single payer monopsony would be worse.

    “For return on educational investment… … primary care comes in a distant third. The numbers were run by accountants in a medical journal back around 1994.”

    The situation was much better for primary care in 1994, your study is way out of date. I’d love to get 1994 level income in primary care now. Primary care is collapsing quickly and will until we get paid more than lip service.

    Cash practice is the only likely solution as long as the bureaucrats don’t cripple it with restrictions or require Medicare acceptance. If they do, I’ll likely become just a hospitalist or work in New Zealand for a few years.

  • Scott Rutherford

    I’m not a doctor. I don’t even play one on TV. I didn’t even finish college, much less med school. But as a business owner, I get it. Doctors are paid a lot less than the general perception and have to shovel out a sizable portion of what they do receive to cover costs.

    The truly sad thing is that in most cases they could make more money if they gave up their licenses and sold pharmaceuticals. While I have nothing against salesmen or their compensations, I’m glad that there are quality doctors who forego that. Especially when I need one. Thanks a million to all of the doctors here. You’re easily worth every penny.

    • Matt

      Scott, you’re wrong if you think physicians could make more than drug salesmen. Maybe if you took the highest paid of the latter, and the lowest paid of the former, yeah. But on average no. And if you look around that pharm sales industry, you’ll see massive recent layoffs. Not too many physicians get laid off and go without well paying work very long. But try and get a job as a drug rep these days.

    • weak and dizzy

      I actually know a physician who left practice to sell pharmaceuticals. When I asked him why, He Said” Why not?, better hours, no call, no malpractice worries, the same pay but I get to spend way more time with the family”. His only regret was losing a decade of his life to training.

  • Alice

    Especially when I need one. Thanks a million to all of the doctors here. You’re easily worth every penny.
    [end quote]

    Scott…..I am thinking you probably have insurance…..because just as doctors are frustrated with paying plumbers out of their own pocket, so would the parent of a very sick child complain at not just the doctor’s fee, but all the tests the doctor would need to run to make sure they don’t get sued.

    Patients and doctors are caught up in a type of Catch 22 a small segment of each side has created. A small segment of irresponsible doctors were negligent and greedy, so doctors now have to cover themselves and charge more. A small segment of patients place falsified lawsuits and now most patients are seen as potential litigants.

    I live near Cleveland where the Clinic is becoming so large, most doctors around here don’t have overhead anymore. They are salaried employees (the Clinic will say because of that the doctors lose their incentives to be surgery happy, but then again the doctors do get bonuses based on a variety of issues. There is gain and loss in this scenario, but it is the coming trend with the money attached to EMR, and the government being more-and-more involved. And I believe doctors will be helped as far as student loans go).

    It really would seem patients are winning on several levels. When there is accountability for the doctor via management the patient fairs better, and if doctors quit going into medicine just for the money (and as much as it grates on doctor’s nerves this was a huge incentive years ago when doctors were able irresponsibly walk away from student loans [I think Geraldo was on the case chasing down delinquent doctors on TV], and flagrantly living the good life, with sport’s cars, mansions…….. and basically acting like Legal Drug Lords on some occasions! :) )

    I am thankful things are changing. I don’t want to see doctors suffer at all, and really like our doctors……..but…………I mean…..I have to say a bit of humbling was probably necessary (not groveling mind you). I think we can all benefit from the changes, but admittedly we have a long way to go.

  • Jerry

    I’m a 55 year old retiree. I flew in the Air Force and the airlines and retired at 55. I have all of the usual aches and pains that accompany being shot down once and in several flight test accidents. As a pilot, I learned to keep doctors at arms length (to keep my licence)..but then I retired and hooked up with a family practice doctor. She’s half my age, treats me like her most important patient and has improved my health to a tremendous degree. All this for a $20 copay. During one visit, healthcare costs and salaries came up and she told me her yearly salary. I

  • Physician On The Edge

    KevinMD and fellow responders,

    I have been fortunate to view the documentary, The Vanishing Oath, in its entirety. This clip of the financial stresses that physicians face certainly is one of many factors that contribute to physician burnout, and the lack of new graduates entering primary care. It should not be overlooked that the director and the producer of this documentary are the first brave souls to bring these images of why the foundation of a sacred profession is crumbling. As a physician who was about to leave the profession, it has clarified my daily struggle in a way that I could not easily convey to others and my patients. It is this clarity that should be embraced so that we can educate ourselves and the public of better solutions that can preserve the oath and promote patient and physician satisfaction. I would encourage all of my fellow physicians to support this documentary as it clearly tells our story. Get involved- appreciate the larger picture and quibble not about the fine brushstrokes of this masterpiece. It saved my professional career.

  • DO Student Doc

    I think that part of the problem is that doctors are getting far less respect today than ever before while other professions are not. For example, when your drain is clogged, you don’t go to “WebPlumber” to figure out what is going on and then fix it yourself, you call a plumber. You understand that your plumbing is important enough and the results of failure significant enough that it’s worth paying the $250 cash rather than risking thousands of dollars of self-inflicted damage (which home-owner’s insurance would not cover). However, folks seem to think that WebMD and other internet sites are a perfectly logical substitute to 12+ years of education and training. So they rightly think that doctors make waaaaaay to much when they can find the same info on their own but they need the docs to prescribe the treatments (which they figured out already as well). The results of this are often far more tragic than just water damage to your house.

  • Johnathan Blaze

    Also, something tells me that residency salaries were also figured into that BS 146k estimate. What a dishonest, fraudulent figure.

  • http://www.benjaminbrownmd.com Ben Brown

    The median gross income among internal medicine physicians is $205,441.7 The median gross income among high school teachers, including the value of benefits but excluding their pension, is about $50,000 per year.10 Accounting for time spent training, student loan debt, years worked, hours worked per year and disproportionate income taxes – the net adjusted hourly wage of an internist is $34.46 per hour, while that of a high school teacher is $30.47 per hour. Though the gross income of an internal medicine physician is 4 times that of a high school teacher, the adjusted net hourly wage of an internal medicine physician is only 1.13 times that of a high school teacher. Most people would argue that high school teachers are not paid enough, yet for some reason most people would also argue that physicians are paid too much.

    Visit http://www.benjaminbrownmd.com for the full article.

  • http://www.twitter.com/alicearobertson Alice

    I know this is a dead thread, but today I was reminded of this when my son was hired to play music for a corporate luncheon. His pay? $500 for one hour! He is a starving writer/musician, so he could use the money, but wow……….entertainers have doctors beat……..and, although, one could argue they are talented…….so is the surgeon who is going to be doing surgery on my daughter.

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