In today’s competitive market, physician compensation can vary based on a variety of factors. The Affordable Care Act has created an increased need for physicians in all specialties, but knowing what to expect when it comes to compensation can be difficult. Of course experience affects what you’re worth to an employer, but there are other factors, too, including location and demand. And you have factors to consider beyond salary—signing and performance bonuses will also affect your overall compensation.
Physician compensation in high-demand specialties
Based on a national sample of physician and advanced practitioner searches, Merritt Hawkins’ 2015 Review of Physician and Advanced Practitioner Recruiting Incentives provides an indication of the types of physicians currently in greatest demand, along with the types of medical settings in which they are recruited.
The chart below shows the average compensation package for physicians for that survey’s top four most in-demand physician specialties, not including production bonuses or benefits.
As you can see, compensation ranges vary widely, even within specialties. For example, a family practice physician can expect an annual salary range between $130,000 and $330,000, with an average of $198,000 per year. The upper and lower limits of this model differ by more than 250 percent, further demonstrating that other factors are in play when determining overall compensation.
Other factors that affect compensation
What are those other factors? To varying degrees, all of the following developments have had an impact on the recruiting incentives offered to physicians:
- Continued expansion of the Affordable Care Act
- The accelerating closure of rural hospitals
- The implementation of population health management through integrated organizations, such as accountable care organizations
- The expansion of telemedicine, with one third of physicians now using some form
- Increased scope of practice and demand for advanced practitioners, such as PAs and NPs (NPs can now practice independently in more than 20 states.)
The health care system continues to evolve, but whether care is delivered in small, independent and unconnected silos, orin vast, integrated health systems, and regardless of whether volume or value is rewarded, physicians will be the paramount providers of care and drivers of health care economics.
According to the Boston University School of Public Health, physicians receive or direct 87 percent of all personal spending on health care in the current volume-driven system through hospital admissions, test orders, prescriptions, procedures, treatment plans and related activities. The total combined economic output of patient care physicians in the U.S. is $1.6 trillion, and each physician generates a per capita economic output of $2.2 million while supporting approximately 14 jobs, according to the American Medical Association’s 2014 Economic Impact Study.
As a practicing physician, you have lots of options regarding your career. Keep in mind that your skills are in high need, and compensation will vary. The key takeaway is to make sure that you are informed on the recruiting incentives that are being offered in the area where you would like to practice.
There is always room for negotiation, and benefits—including longer vacation time and performance bonuses—can also be factors in determining which type of positions are more in line with not only your career aspirations, but also your specific lifestyle.