Physician compensation increased in 2023, but inflation eats into real income
Physicians saw their pay increase in 2023 across all specialties, but with the small drop seen in 2022, it still doesn’t outweigh the inflating cost of living and doing business.
According to a new report by Doximity, average pay for doctors went up by nearly 6% in 2023 following a drop of 2.4% in 2022. However, when adjusted for inflation, Medicare payments to physicians have fallen sharply by 22% since 2001, ultimately reducing their real income.
The report findings are from a study of physician reimbursement and wages in 50 metropolitan areas across the country. Of them, physicians in 30 cities saw their compensation increase by more than 6%, with eight cities seeing wages for doctors jump by over 10%. Raleigh, NC, led the pack, with physicians taking home an extra 15.6% in 2023.
Other metros brought those numbers down, however, especially with inflation being at a 40-year high. The report paints a complicated picture where variations in the cost of living—combined with uneven growth—from metro to metro challenges coming to any firm conclusions about the overall growth in physician compensation.
Adjusting for cost of living, doctors in St. Louis fare the best in terms of real income, while those in Washington, DC, have the lowest real income on average. In any case, most physicians surveyed for the report do not believe their compensation fairly reflects their value in the market.
“While many physicians do not believe their compensation reflects the level of effort and expertise required in their role, the majority of physicians surveyed (63%) either have been unsuccessful in their negotiation attempts or have not tried negotiating at all,” the report reads.
The vast majority of physicians surveyed (81%) said they are overworked, and 59% said they are considering finding new employment. Further, 30% are considering an early retirement. Only 5% of physicians said they have “negotiated and were successful in their negotiations” for higher compensation.
The culprit for feeling overworked and underpaid may be the physician shortage. Ninety percent of those surveyed said their clinical practice has been negatively impacted, with most (74%) of them describing the shortage as moderate to severe.
In terms of their day-to-day work, physicians of all specialties overwhelmingly (75%) said reducing administrative burden would improve burnout. Sixty percent said higher compensation would reduce the feeling of burnout and overwork.
Doximity’s report is based on responses from 33,000 physicians, all surveyed in the calendar year 2023. The full findings can be found here.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.