More physicians have become millionaires since before the pandemic, survey finds

 stethoscope with pink piggy bank
A poll of nearly 18,000 U.S. physicians suggests home ownership and other pre-pandemic investments helped many doctors break seven figures during a volatile year. (Nuthawut Somsuk/iStock/GettyImages)

Many physicians increased their net worth over the last year of quarantine despite reporting relatively steady incomes and COVID-19-related practice issues, according to new survey data.

Among nearly 18,000 physician respondents polled by Medscape, the proportion of those reporting a net worth greater than $1 million increased from 50% the previous year to 56% in 2020.

Twenty-eight percent said they had a net worth lower than $500,000, while 10% valued themselves greater than $5 million, according to the report.

Family medicine (18%), internal medicine (17%) and pediatrics (11%) specialists were most prevalent among those in the lower bracket. Internal medicine (9%), radiology (7%), cardiology (7%) and orthopedics and orthopedic surgery (7%) were the most frequent specialties among the survey’s wealthier respondents.

The report noted an unprecedented five specialties in which more than 20% of respondents reported a net worth greater than $5 million.

Contrasting physicians’ overall wealth gains were responses from a third of the respondents saying they experienced a financial loss during the past year.

RELATED: Government relief, summer volume spikes kept primary physicians afloat in 2020: MGMA report

Practice issues—many of which were driven by COVID-19—were to blame for nearly half of those reporting a loss. Following that were bad personal investments in the stock market, real estate market or other avenues and loss of a job (either themselves or their partners).

As reported previously, physicians’ full-year incomes remained relatively stable during the past year, with primary care physicians’ average dropping just $1,000 to $242,000 and specialists’ falling $2,000 to $344,000. The pandemic year’s tempered losses were generally attributed to cost-cutting efforts and Paycheck Protection Program payments.

In light of stable incomes and the COVID-19 disruptions hitting just a fraction of physicians, the report suggests that many physicians’ wealth increases were tied to macroeconomic trends affecting real estate and stock markets.

“The rise in home prices is certainly a factor,” Joel Greenwald, M.D., a wealth management adviser for physicians, said in the report. “Definitely the rise in the stock market played a large role; the S&P 500 finished the year up over 18%.”

But while their existing investments may have gained in value, about a third of the physician respondents said they put less money into a 401(k) during 2020 than they did in prior years. Similarly, more than a quarter of the respondents said they put less in an after-tax savings account than they had previously.

RELATED: Physician productivity, revenues fell steeply in 2020 due to COVID-19 volatility, Kaufman Hall says

The report suggested these savings account behaviors could be attributed to employment terminations or cost savings efforts among hospitals. It could also reflect concerns about future income and employment insecurity, as nearly one-third of the respondents said they took steps to reduce their spending throughout 2020.

“I’ve seen clients accumulate cash, which has added to their net worth,” Greenwald said. “They cut back on spending because they were worried about big declines in income and also because there was simply less to spend money on.”

Medline conducted its annual online survey between Oct. 6, 2020, and Feb. 11, 2021.

The data included 17,903 respondents from various specialties who were currently practicing in the U.S. Male respondents comprised 61% of the sample, in which internal medicine (14%), family medicine (13%) pediatrics (8%) and psychiatry (6%) specialties had the greatest representation.

Included alongside the questions on physicians’ wealth were others regarding their debts.

RELATED: Here are the physician specialties that got a big pay bump in 2020 and the ones that took a salary hit

Only 12% of respondents said they were not currently paying off any debts. Mortgage on a primary residence was the most frequently reported debt (64%), followed by car loan payments (37%), credit card debt (25%) and medical school debt (25%).

Seventeen percent of the respondents said they deferred or refinanced loans during the past year to cut back on expenses.

Four percent of the respondents said they were unable to pay their mortgage during the past year due to COVID-19, which the report noted was much lower than the 25.3% national rate reported last summer.

And on the subject of homes, a fair proportion of primary care physicians and specialists alike reported owning spacious residences.

About 42% of the former and 54% of the latter said they lived in a home that was 3,000 square feet or larger. Homes larger than 5,000 square feet were claimed by 7% of primary care physicians and 14% of specialists.

Medscape’s survey data are the latest to outline a year of financial volatility for the majority of physicians. A January report from Kaufman Hall outlined a 4.5% net revenue cut among physicians due to low patient volumes visiting their practices. That being said, survey data also suggested certain specialties saw their earnings spike as much as 10% during an atypical year of growth.