Physicians made steady pay gains last year, as total compensation grew by a modest 3%, increasing from an average of $352,000 to $363,000.
However, any contentment about compensation gains was undercut by the effects of high inflation rates throughout 2023 and Medicare reimbursement cuts, according to Medscape's 2024 physician compensation report.
The report, based on a survey of 7,000 U.S. physicians representing more than 29 specialty areas, found that specialized doctors earned $117,000 more on average than their primary care counterparts.
Pay rose by roughly 4% for an average primary care physician, from $265,000 to $277,000, and by around 3% for a doctor who practiced in one of 29+ medical specialties. Average earnings for specialists came to $394,000 in 2023, up from $382,000 in 2022.
But that 3% increase trailed the approximate 4% average hike for nonunionized U.S. employees in 2023, as reported by consulting firm Mercer. Further, the 2% Medicare reimbursement cut implemented last year also hurt income for many physicians and medical employers.
"Since we came out of COVID, physicians have been back in the driver's seat where job offers and contract negotiations are concerned," said Jeff Decker, president of AMN Healthcare's physician solutions division, in the report. However, many of those physicians are choosing to exercise that leverage for greater schedule flexibility rather than more money, he said.
While an average salary of $363,000 seems generous compared to the average worker in the U.S., a growing number of physicians feel they are not compensated enough to justify the amount of stress, the investment in education and training and time spent away from family.
The survey found that 61% of doctors believe their profession is generally underpaid in the U.S., and 51% feel personally underpaid relative to their job duties.
"I love my work but I cannot cover my own bills, and I lose massive amounts of time with my family," one doctor, who was quoted in the survey, said.
Forty-four percent of physicians surveyed said they are taking on extra work to boost their income. "I moonlight because I am not as financially stable as I would like to be at this stage of life," an anesthesiologist in Washington state said in the survey.
Physician specialists earned about 44% more on average than PCPs, compared to roughly 44% and 42%, respectively, in 2022 and 2021, according to the report.
The highest-paid specialties last year included orthopedics ($558,000), plastic surgery ($536,000), cardiology ($525,000), urology ($515,000) and gastroenterology ($512,000).
Those specialists did not see the biggest gains in earnings in 2023, though, and, in many cases, lost ground. Plastic surgeons saw their pay dip, on average, by 13%, and orthopedists saw a 3% drop in pay.
Physician medicine and rehabilitation doctors saw the biggest one-year gain in compensation, with pay up 11%, along with neurologists, who benefited from a 10% jump in pay.
Among the lowest-paid specialties were family medicine ($272,000), public health and preventive medicine ($263,000), infectious disease ($261,000), pediatrics ($260,000) and diabetes and endocrinology ($256,000).
West North Central states such as Iowa, Nebraska, North Dakota and South Dakota reported the highest earning compensation (more than $400,000), while Mid-Atlantic states, such as New York, New Jersey and Pennsylvania, reported the lowest compensation at $351,000.
Fifty-eight percent of U.S. physicians said they have a chance at an incentive bonus, according to the survey. The average incentive bonus for all physicians was $45,000 in 2023, with PCPs earning, on average, a $27,000 bonus and specialists bringing in a $51,000 bonus. Among specialists, reported bonuses were best for dermatologists (about $142,000), orthopedists ($102,000) and cardiologists ($75,000).
"Generally speaking, bonuses have to be closer to 20% of base [compensation] or above in order to start to change behavior," Ron Holder, chief operating officer of the Medical Group Management Association, said in the report.
Most physicians in the survey participated in bonus programs that "reward physicians for the right types of performance [as opposed to] better performance from poor performers," Holder said.
Narrowing of compensation gaps between men and women and among certain racial and ethnic groups was even last year, the report found.
As in previous years, this year's report found gender disparity in physician compensation with male physicians earning approximately 29% more than their female counterparts, underscoring ongoing concerns regarding pay equity within the medical profession. Over the previous year, the gender gap declined slightly for primary care physicians. Male PCPs earned $295,000, on average, compared to women who earned $253,000, in 2023. The gender gap was about 17% favoring men, down from 19% in last year's report.
But, male specialists out-earned women by around 31% on average, compared to 27% in last year's report. Male specialists earned, on average, about $435,000 compared to women with $333,000. Overall, male physicians earned about $400,000 compared to female physicians bringing in $309,000 in 2023.
The report also highlighted notable trends in racial and ethnic compensation disparities. Compensation for African American and Black physicians grew more than twice as fast as for any other racial or ethnic group. However, they are still the lowest compensated group, earning $37,000 on average less than white doctors, according to the report.
Self-employment in the physician community has been waning for some time, with only about 44% of U.S. doctors reporting that they were self-employed in the last American Medical Association physician practice benchmark survey (PDF). A self-employed doctor on average out-earned a colleague working for a hospital, healthcare organization or other employer by roughly 11% last year, versus around 9% in 2022, but that's down from 20% in 2021.