With the Affordable Care Act insuring over 30 million new patients that are routinely seeking the care of a doctor, an emphasis on how much doctors are being paid right now is coming under the spotlight. There is an estimated shortage of primary care physicians that could reach 20,000 doctors by the year 2020. Because specialists can earn more than a primary care physician with an equal amount of schooling, how much a doctor’s salary happens to be plays a critical role in the care of the average person.
Are doctors paid too much? Could doctors be paid too little? These are questions that are going to have to be answered in the next decade so that the right level of care can be achieved for all Americans.
What is the Average Doctor Salary in the United States?
It’s no secret that American doctors are one of the highest paid professions in the world today. The average salary for a doctor in the United States is $230,000. This is ranked second in the world, behind the Netherlands, who pay their doctors an average of $286,000 per year. There is no doubt that the high salaries commanded by American doctors are earned by those who are going through medical school. The average student graduates with a medical degree has debt of over $100,000 to pay.
Yet with all of the advancements in medical technology and the high salaries that are paid to doctors in the United States, Americans are still lagging behind the rest of the industrialized world when it comes to the overall standard of care that is being received. US earnings are up to 78% higher for doctors when compared to the rest of the world.
Part of this might be because of the high cost of specialty work. Doctors who specialize in complicated fields of medicine like cardiology or neurology can easy command a salary that would translate to $720 per hour. It is not uncommon for specialists to earn an average salary that is about $400,000. Compare this to the average of $173,000 that a primary care physician is able to earn and the different can be a $3 million salary shortfall for doctors who attend almost the same level of schooling.
What has happened to Modern Medicine?
It wasn’t that long ago that the field of medicine rarely offered someone a path to be able to become wealthy. Just 150 years ago, in fact, the average salary for an American doctor was just good enough for them to fit in at the lower end of the Middle Class. Today’s doctors are easily within the top 1% of income earners.
What might surprise many people is the fact that the nations which pay their doctors the least actually have the highest standards of care that are given. Even though many of these countries have public health care systems instead of private ones, there is still a 35% overall difference in how much American doctors are paid when compared to other doctors.
When local average salaries in specialized professions are compared internationally with what a local doctor earns, however, almost all doctors are paid near the top end of their local available salary scale. This is ultimately another issue that the American doctor must face. If they are making top end money and the wealth gap in the United States continues to grow, they could very well have salaries that price their treatments and services outside of what the average person can afford. That’s what the Affordable Care Act was designed to stop, but there are still many challenges to face.
MD Salaries aren’t the only benefit
The base salary is not the only compensation that the American doctor is able to receive. Doctors also receive a comprehensive benefits package that rivals some of the best options that are available anywhere in the business world today. Here are a few examples of the additional values that doctors earn with their base salary.
- Time off – The average doctor receives over $23,000 in pay from time off that is allowed in their schedule for vacation or sick time.
- Bonuses – An additional $2,500 is added to the average American doctor’s salary for some sort of bonus, whether it is performance-related, for the holidays, or for some other reason.
- 401k – Doctors in the US generally receive a 2% match on contributions to their retirement plan, resulting in an additional $6,700 of value to their salary.
When pensions, disability, and other benefits are all added together, it adds another $70,000 in total to the doctor’s salary in the US. A total compensation package for the average American doctor is just short of $250,000 per year. In real terms, a doctor with $100,000 of student debt could live on a small stipend for the first year of their general practice, completely pay off their debt, and then build their net worth from there.
Doctor Salaries in the United States
The high wages might make some people feel envious or question the high costs of health care in the United States right now, but this also means that the average person has the opportunity right now to change their stars. With an estimated 20,000 doctor shortfall by the year 2020, there is a tremendous need for new doctors to get into school right now. Millions of dollars of stipends, scholarships, and grants are being handed out by the US government and universities right now to get new doctors taught and graduated.
The only problem is that all of this additional spending is expected to graduate an additional 500 doctors per year only. This will only cut the the doctor shortage by 25% in the best case scenario. It means that not only will doctors be getting paid more so that they can be recruited, but that there are openings right now to get involved.
Why is now the time to go to Medical School?
After 2020, the American population is expected to age dramatically. Although newly insured households are causing a majority of the shortage of doctors right now, Americans above the age of 65 are expected to increase by nearly 40 percent after the year 2020. Many older Americans tend to supplement their health care insurance with Medicare or Medicaid, something that many doctors don’t accept because of the low compensation tables that are offered by the government. This will only continue to increase the need for doctors in each community.
Regional salary variations also play a major factor in not only the average pay for a doctor, but where a doctor will choose to practice. Doctors that are based in a rural clinic may see salaries that are well under $100,000 per year just because of a limited population base. Other doctors may see salaries well above $1 million just because of their specialty and a higher cost of living in an urban environment. The demand for a higher salary often causes doctors to focus on urban environments over rural ones and the overall result is a doctor shortage that is also due to distribution factors.
Despite the Numbers, Are Doctors Wealthy?
Although the compensation numbers are higher than what most households are able to earn, American doctors don’t consider themselves to be wealthy. Many of them, in fact, have been taking pay cuts as of late. General surgeons, for example, are actually earning 12% less today than they did back in 2010. Radiologists and orthopedic surgeons have seen 10% drops in their overall salary. On the other hand, over the same time period, pediatricians have seen a 5% increase in how much they’re getting paid.
The most notable fact about doctor salaries in the United States, however, is the number of doctors who say that they wouldn’t enter the field of medicine if they had the chance to make a different choice. About half of all doctors wouldn’t even choose to be in the profession any more. When data about specialty choice is added to these numbers, the figures become even more grim. More than two-thirds of American doctors aren’t happy about where they currently are.
Doctor salaries in the US are definitely higher than almost anywhere in the world, but there isn’t a higher amount of value associated with that amount. Doctors in other nations earn an equal amount of value, so this data ultimately proves that the salaries are pretty competitive from a global perspective. With doctor shortages growing along with the need of more people to see the doctor on a regular basis, there is one thing that is for certain: the status quo is no longer acceptable.
Something needs to change to make becoming a doctor a tempting proposition. Would paying US doctors more money be the solution? Maybe, or maybe not – but it is something that needs to be considered.