What's Up, Doc? Not Your Salary

What's Up, Doc? Not Your Salary

A health care revolution is changing the lives – and income – of MDs

A quiet revolution is transforming the practice of medicine. States are moving toward providing access to health care for all at lower costs. Big hospitals are swallowing smaller local ones to form self-contained combines that are more efficient. And insurers are competing to trim costs and raise profits. What does all this price-squeezing mean for future doctors? As Princeton University professor Uwe E. Reinhard put it once, “To become a physician now means you won't make as much money. Unless you have a real passion for medicine or an intellectual curiosity, I wouldn't recommend it.”

Becoming a doctor is expensive. Medical school graduates commonly pile around $100,000 in debt. And the initial monetary rewards aren't great, either. Residents, med school graduates who are in training, start out with an minimum salary after putting in 80 to 100 hours a week. But that hasn't deterred people from flocking to medicine. The supply of doctors grow faster than the general population increase.

Two-thirds of new doctors each year are specialists. Being a specialist may be more professionally rewarding, and it is also where the money is. For doctors of all stripes, the average income increases, but a huge chasm appears when you compare incomes for general practitioners with specialists. An average family doctor earns more money today, income rises for general practitioners and even jumps for specialists.

Good salary can help travel. Photo by Elena.

The golden age of medicine may be over. Some 75 percent of doctors now participate in some type of managed-care group, focusing primarily on preventive care. When patients are kept healthy, expensive specialists are not needed, prices are kept in check, and the HMO (health maintenance organization) or PPO (preferred provider organization) profits. Primary care doctors who participate in HMOs often get incentives that are linked to making as few referrals to specialists as possible.

There are benefits associated with HMO alliances, including fewer administrative headaches, possibly shorter hours, and a steady flow of patients. But HMOs can be tight-fisted with salaries, too. But HOMs can be tight-fisted with salaries, too. A survey by Warren Surveys of Rockford, Ill., showed that a pediatrician on contract with an HMOO makes 20% less to an average salary in private practice.

What's the prognosis for the future? The picture ix mixed. As the country moves increasingly toward a managed care system, generalists will be in demand. In the next years, there could be a shortage of dozens of thousands of generalists. On the other hand, the supply of specialists will be about 30 percent more than needed, leading to a surplus of many specialists.