[Today’s guest post was submitted by Dr. Stephen J. Thomas, Director of the Institute for Global Health and Translation Sciences and Interim Chair for Microbiology and Immunology at SUNY Upstate Medical University. He is also the Co-founder and Director of Strategy for Phairify, a web-based, physician value and compensation data analytics platform. We have no financial relationship.]
I am convinced that a better healthcare system starts with a better physician compensation model.
You’re sitting across from your Department Chair, preparing to negotiate your contract. She pulls out a thick book, opens it up, slides it over to you, and points to a number. The number represents your proposed compensation, in other words, your professional value and worth. She tells you the number reflects that you practice at an academic center, the region your hospital is located in, and that she is choosing the higher end of the scale due to your two decades of experience as a subspecialist. You are perplexed.
As you look at the number you begin to wonder: does it reflect that your hospital (you) cares for the sickest and most complex patients, or does it account for the incredibly high volume of patients you see? You wonder how the compensation accounts for the fact you are a clinician, but are also expected to manage and lead other clinicians. What about your responsibility to teach medical students, residents, and fellows? How does the number account for the relative rurality of where you practice compared to some of the major cities also located in your region of the country?
When you ask your Chair where these data came from, she responds that the data are compiled from market surveys and collected from hospital and hospital system administrators. Your Chair explains the data are not perfect, but they are the best she has and this is the standard for how many employers benchmark their physicians’ salaries. You think to yourself, “Am I being treated fairly?”
Physicians Are Uninformed and Unprepared for Compensation Negotiations
There are a number of reasons why people become physicians, and the prospect for a healthy salary is among them, but it usually does not top the list. In fact, many of us have experienced the insinuation that a doctor who cares about their compensation is somehow less caring, compassionate, or invested in their patient. If you are altruistic, the system will take care of you and ensure you are fairly compensated. It would be nice if this were true.
With the average graduating resident having more than $250,000 in debt, fair compensation is more than a value statement; it is a necessity. In addition to carrying debt, physicians tend to work incredibly long work hours, often work weekends, and have numerous interrupted nights when they are on call. We signed up for this, eyes wide open, in exchange for the privilege of being able to use our knowledge and skills to diagnose and cure our patients. Unfortunately, physicians spend less time actually seeing patients these days, and spend more time completing documentation and other administrative tasks, which do little for patient care but are somehow tied to ‘quality’ and ‘value’ and, of course, reimbursement.
These stressors and realities are a few of the reasons physicians have higher rates than the general population for depression and suicide. They also contribute to the exceptionally high rates of burnout and moral injury among physicians. These trends were on the rise even before COVID, but the pandemic certainly has not helped. In 2021, our nation’s physicians are in a very precarious position.
Physicians are required to renegotiate their contracts, on average, every 18 to 24 months. When they do this, they are put into a position of recurring financial jeopardy. “What will be the determination of my worth this time?”
Physicians are not trained how to negotiate, most do not know how to benchmark their relative value, and very few have access to data or other information which could help inform them of how their value translates into compensation. There are numerous sources of physician compensation information, but the fine print often reveals the data are based on biased sampling, low sample sizes, are not specialty-specific, and are accompanied by the caveat the data are not generalizable to those who did not complete the survey. When it comes to negotiating their financial well-being, physicians are largely on their own, at a significant disadvantage, and at great risk of being inappropriately valued.
What Are the Effects of Undervaluing Physicians on Health?
When a person is considering a career in medicine, they may be undeterred by the requirements to become a physician, including being a top performer in college, scoring well on your MCAT exam, excelling during four years of medical school, working extremely hard during training, and taking numerous certification and licensing exams. What actually does deter them from medicine, however, is the debt they will incur during this education process and the delay they will experience—compared to their non-physician peers—in earning a salary reflective of their education and training. This is one contributing factor to why the U.S. is facing a physician shortage predicted to reach 133,000 doctors by 2033.
The U.S. spends more than 15% of its Gross Domestic Product (GDP) on health care, almost twice the average of more than 30 other high-income countries. Despite this spend, the U.S. population has a lower life expectancy, higher infant mortality rates, higher suicide rate, greater burden of chronic diseases (heart disease, lung disease, diabetes), higher rates of obesity, more preventable hospitalizations, and more avoidable deaths. Something is wrong.
One contributor to our poor national health is the insufficient focus on, and resources directed towards, primary care. We all understand that prevention is superior to cure, and our primary care physicians specialize in prevention. Unfortunately, as our national health scores have plummeted, so has the percentage of physicians who decide to train in family medicine, general internal medicine, and general pediatrics. Medical students are choosing to not train in primary care and, as a result, the U.S. is facing a shortage of more than 50,000 primary care providers by 2033.

Dr. Stephen Thomas
The decline in the number of primary care physicians will not impact everyone equally. Fewer primary care physicians equates to less access to preventive care services, but the decline in access will not be experienced by our population uniformly. Minority, low socio-economic, and rural populations will experience the greatest burden and suffer the most. How the U.S. will address the crisis of disparities in health care without a robust primary care infrastructure is unclear.
There are numerous reasons for these trends, and the economics of being a primary care physician is one of them. A primary care physician graduates with the same debt as their peers, completes three or more years of training, cares for dozens of patients a day, experiences some of the most aggressive documentation requirements, and is expected to be the foundation of clinical education for the more than 80,000 U.S. medical students. Despite delivering great value, however, primary care activities receive some of the lowest reimbursement rates, and primary care physicians are among the lowest paid in medicine. For years it has been my personal experience that when I ask students and residents why they are not going into primary care the answer has been uniform, “I cannot afford it”.
Additional Casualties from Undervaluation – Medical Education and Research
Academic medical institutions typically claim a tripartite mission—clinical care, education, and research. Ideally, there would be equipoise in the importance and resourcing of these missions, but financial realities and institutional costs direct our collective attentions to the need for revenue generation. As a result, the clinical care and revenue generation mission takes precedence, oftentimes at the expense of the education and research missions.
There is no doubt our primary focus needs to be on caring for our patients, but in many institutions it comes with a near-complete eclipse of the mission to teach the next generation of medical professionals and/or explore research questions which may lead to advances in the care and treatment of our patients. The physician-educator and physician-scientist are becoming endangered species. The chasm between physicians’ expectations of their academic career and where they ultimately land is vast and widening. One main reason for this gap is the lack of value placed on these non-clinical activities and how this translates into ‘one-flavor’ compensation models.
Physicians need protected time to teach and/or conduct research. Protected time means a physician can devote his or her effort to activities which may or may not be revenue-generating, such as lecturing medical students or writing a grant, without incurring financial risk. Stated differently, if you are compensated through a strict productivity model or are a salaried physician with revenue requirements, every minute you spend not generating revenue through clinical care activities could lower your compensation. As a result of this paradigm, many physicians abandon their hopes of being a master educator or making a real go at being a physician-scientist.
Undervaluing the education and research missions and ‘eat what you kill’ physician compensation models are contributing to looming crises and mass defections of physicians from these disciplines without any plan to replace them.
What Is the Solution to Our Physician Valuation Problem?
The challenge of detangling drivers of physician value and compensation is multi-faceted and highly complex. I share one perspective, but there are others which are equally important and deserve attention. For example, how do academic institutions stay afloat as they care for more and more people who are uninsured or unable to pay, while budgets to offset these costs are shrinking? The reimbursement from the government and third-party payers for services and fees also intersects with the physician value and compensation discussion. So how do we continue and focus the conversation and move towards solutions?
In my opinion, it starts with data. We all need more complete, timely, specialty-specific, unbiased, and accurate sources of physician compensation and productivity data. We need to democratize this data for physicians and remove financial and other barriers which may prevent them, on a wide scale, from obtaining it. Having physicians and their employers share the same reality on the state of physician compensation and productivity is essential to achieving a shared understanding of physician value.
In addition, if we fail to open the optic on what constitutes drivers of physician value and abandon the view that revenue generation is the only value driver, our educational and research missions will continue to suffer and it will take years to repair at an incalculable cost. Most concerning, our patients’ quality of care will suffer in parallel. Look no further than the therapeutics and vaccines which have been brought to the fight against COVID—without academic medical institutions these advancements would either not have been possible or would have been delayed. Do we want to risk losing these institutions and expertise?
If we want to improve our nation’s health care system, significant changes are required in how we value our physicians. We need a common view of the current state of compensation and productivity, we need to rethink the drivers of value in patient care, education, and research, and we need a rational alignment of compensation with these drivers. The U.S. health care system can no longer afford inaction.
What solutions do you have to improve the current state of physician compensation and valuation? Comment below!
I very much agree with the major issues that you bring up Dr. Thomas. Like you, I don’t have any magic solutions but I do think that transparency on the part of physicians is an important first step. Doctors tend to be very tight lipped about how much they make or how they are compensated. This just keeps all of us in the dark and gives the negotiating power to those goals n the other side of the table.
Thanks for a great piece!
I appreciate your feedback and I agree with your point. As an infectious disease physician-scientist, it has been very difficult for me to make the value proposition for non-patient care activities. Fortunately, my leadership is a bit more enlightened, but it comes down to self-empowerment.
I think they are trying to fill the gap of less physicians with Nurse Practitioners and Physician Assistants
Possible.
We use NPs and PAs in our infectious diseases practice in both the in- and out-patient setting and they have been a game changer for us and our ability to provide quality care and capture revenue.
What I would hope is that we would take a hard look at why people are avoiding careers as physicians or are leaving the profession?
I believe some of the factors are in our control.
It occurred to me- majority career salaried military in or out of uniform- that apparently we should leave all research and training to the govt? Certainly we should consider expanding the number of govt funded residency slots, and adding funds to that for salary supplements for the teachers so honored with appointment to train those residents.
Thanks for your comment.
Your perspective is very interesting to me because I spent 20 years in the DoD, 14 of which was in the biomedical R&D enterprise (Walter Reed Army Institute of Research). My perspective is that academia plays a significant role innovating and advancing the development of technologies which the USG then adopts through collaboration or licensing agreements.
Agree with most what you said. Fundamentally, physicians are treated as high pay slaves. If we break it down, physician’s work is not scalable. The revenue model is rate (of skills/demand) * time. In a high pay profession, you want to be able to scale, which is difficult for this profession. I actually would design benefits for physician longevity and well-being, instead of high income. At the same time, physicians needs to find some way to scale the revenue model.
I know people like to be dramatic and talk about being slaves to their jobs or their debt (and I’ve done it too), but using that analogy kind of minimizes what real slaves went through/go through. A doc can walk away from a bad job. A slave walks away from their master at peril of their life. Comparing the two can be offensive to some whose ancestors actually were slaves.
You can’t negotiate if you have no power. You have no power as an individual physician. All negotiation starts with how value someone or some organization see’s in you. Most doctors now become employees. That is the single most important problem. The solution is to have negotiation power by developing Management organizations where 100’s of physicians from different specialties can negotiate as a group with insurance companies and Hospital systems or any other organization. These are not union. These are business organizations that carry a heavy weight. Each doctor can be a separate LLC or a group can be a partnership but all will be part of the larger Management organization that negotiates. Everyone is their own CEO part of a larger entity with strong negotiating power. If we as doctors achieve this task, we will no longer be pushed around.
You’re sort of describing a union, just with another name. But honestly, maybe it’s time to think about unionizing. If the current trends of consolidation continue, we are all going to be at the mercy of large corporations, who ultimately really only care about the bottom line. Who among us isn’t already at the mercy of a large corporation in some form? Look how ER docs were treated during the pandemic. Tales of longer hours for less pay, or just being fired all together are easy to find with a quick google search. Meanwhile, large hospital systems made out like bandits during the pandemic. No physician I know saw their paychecks go up during the pandemic. A lot took some cut, even if temporary. More and more we see private equity buying up practices of all different specialties. PE isn’t interested in buying physician practices to run a charity or improve the conditions of doctors. They see money in the water and they want it. I’m sure a lot of physicians consider “unions” a dirty word, but take a step back and fairly evaluate the situation, and you might conclude it’s the only option to save us.
My hospital didn’t make out like a bandit during the pandemic. April and May 2020 were particularly terrible. I doubt anyone had a very good 2nd quarter in 2020.
I think it’s telling about the healthcare system that what for many of us was the most busy clinical time we experienced hospitals posted losses. “Normal” medical care doesn’t pay but the specialized scheduled stuff does….
Cards and ortho run the hospitals eh? Welcome to reality.
After we shut down all elective and non-emergent procedures and surgeries, my hospital was losing $1M every day. It would have been a complete and total loss if we were not able to quickly pivot to tele-medicine and if reimbursement for tele was not upheld. I wrote about the financial ramifications of COVID for Forbes back in May 2020.
This is well written. I think the first question we all have to ask is “what’s fair?” What’s fair starting compensation for a general pediatrician/family practice/etc. Next is what’s sellable to the public. The public views doctors as “rich” so any proposal to pay docs more via insurance payments (i.e. medicare/medicaid) will be met with resistance. Finally, we need to be able to make the link that paying us more will lead to better health outcomes.
I also agree that for the individual employed physician unionization is the answer.
Thank you for sharing this thoughtful and well written article.
While many ideas have been proposed, it does seem that re-aligning the entire payment system around an axis of value will be a better approach to bring transparency to our system off compensation. Of course, this has proven devilishly difficult as health is influenced by so much more than healthcare. And, the incessant clicking and administrative work necessary to capturing this data has obviously not been well received. Yet, I see these models as the future and not fee for service. I am curious of the author’s thoughts on the future of value based payment and if this may change the calculus around physician valuation and compensation.
Defining value is notoriously difficult.
Agree that defining value is difficult, but I also believe the definition is much broader than what is currently being utilized.
“Eat what you kill” compensation plans based purely on wRVU or individual revenue generation can be problematic and dis-incentivize engagement in activities which also drive value (teaching, research) for many organizations and society as a whole.
My experience with value based programs is that the intent makes sense – who would not agree with rewarding quality – but the methods of demonstrating / documenting value can detract from care delivery and can have secondary effects which detract from quality.
I would be interested in the thoughts of others?
Whatever gets measured is what you get more of. If what you care about is time to CT scanner for stroke patients, you get a short time to CT scanner, but meanwhile someone else in the ED is getting worse care than they would have gotten if we weren’t focusing on time to CT scanner. Want to measure how many STEMI patients get ASA? They’ll all get ASA, but are less likely to get a Statin. Care about foley-associated UTIs? You’ll get fewer of those and more line infections. Want PNA patients to all get blood cultures? We’ll do blood cultures on everyone with dyspnea and end up with a bunch of false positives running up costs and causing complications from unnecessary antibiotics. Be careful what you measure as “quality”.
The larger problem here, is the water is already over the dam; physicians sold out in large numbers their lucrative practices to health systems and so started the relentless, progressive march to the majority of physicians now being employed by health systems. When you are an employee of the health system, you are no different than the guy/gal that sweeps the floor at night, you only get paid more.
Stay independent as long as possible and you call the shots.
Yes, the deterioration of the culture hit everything including medicine, and the issue is still a sort of generational war of boomers and older vs newbies that have to suffer for the older sellouts dreams that largely were made realities although they also made a lot of (personal in addition) mistakes.
More on the article from me below.
Elements of the article and this discussion have really resonated with me. In my opinion, compensation is really a band aid to the greater systemic problems articulated in the article and comments section. A doc might find a position that pays above market value, but it will be golden handcuffs for a corporate hospital system. The splendor of high income will wear away as you are forced to table those elements of working at the top of your license and profession (i.e., education and research) in exchange for clinical care. Your employer will allow you to do those things, but they are add-ons you fulfill on your own time after you’re done seeing as many patients as you can or you bring enough revenue into the system that you can leverage more time. It’s not because you’re great at your profession, it’s because at that moment in time, they can’t afford to lose you. Even that phenomenon is fleeting. There are always new providers willing to do what you don’t want to do.
I appreciate the comments.
When I look at the growing national physician shortfalls, the annual number of unfilled physician job openings, the daily financial loses associated with those openings, and the average time to fill those positions, I believe we may have more to contribute to the conversation than we think, even as employees.
Stephen may be right with his above comment. Like most things in America at this point (which has a criminal central authority bureau and spies on American citizens, or outright throws the book at others with no help to defend or fund their defense), the issue is largely corrupt systems/pols and corporations, hospitals being the link in our case. He said,
“In my opinion, it starts with data. We all need more complete, timely, specialty-specific, unbiased, and accurate sources of physician compensation and productivity data. We need to democratize this data for physicians and remove financial and other barriers which may prevent them, on a wide scale, from obtaining it. Having physicians and their employers share the same reality on the state of physician compensation and productivity is essential to achieving a shared understanding of physician value.”
This is oh so true but as others have pointed out, you will never get this data because it would prove that the hospital systems are lowballing the shit out of most, if not all, physicians. It is a curious thing that even having relatives that are union sympathizers or outright hacks, they would complain about ballplayers making “tons of money” but never the owner. So the actual product (which is their position as laborer in their union!) makers shouldn’t make money but it’s ok for baseball owners to gouge everyone on stadium and TV contract deals. Same things with the hospitals; we physicians are like the sports player in this scenario. It sorta shows you how undisciplined and dumb the average human is and how is he abused by the gov’t and media overlords, sadly, willingly.
The other issue we have that ballplayers don’t by and large get crushed in the same way via taxation (though our careers are MUCH longer, yet we also invested far more) — we have theoretically added productivity scenarios, theirs is produce or don’t – that we are at a horrible “sweet spot” (for the gov’t) in terms of taxes. You can’t pay me enough to do overnights as a radiologist, yet all they do is ask for more. The job honestly should pay $1 million minimum. The point here is that it’s totally not worth it, ESPECIALLY when you make more than 300k (let’s say) and each added hour of work adds little to your bottom line which you can’t do much with in life (I’m gonna work for 50% less of each marginal output) so I can do what, buy another car? Lose a decade of my life? Get health problems? LOL. It doesn’t get me any closer to retirement, really, either.
In conclusion, the criminal government and media machine, with corrupt lobbyist power and multitude of lies at this point sorta precludes our chances of winning anything reasonable until the system breaks, which it will. A tax revolt is likely coming, or more productive people like us will flat out move and go where we are welcome. The rest of the stimmy druggies and urban hoodlums can sort out the culling part that the government desires so clearly, as well.
You have an interesting worldview.