How Much Do Doctors Make?

The popular belief about American doctors is that they earn a lot of money. There is a lot of truth to that idea — there’s a lot of money floating around the healthcare sector. However, physician salary rates are anything but uniform.

Plenty of factors play a part in setting the yearly income for doctors. A few of them are common to all businesses: supply and demand, cost of living adjustments, contract terms, and more. However, a few others are unique to the medical profession, spanning across different services and specialties.

How much do doctors make? What can recent (or pending) medical school graduates expect to earn in doctor salary values once they’ve established their practices and patient rosters? Let’s take a look at some of the latest information.

Average Income of a Doctor

According to Medscape, the average yearly income for doctors in general was $363,000 in 2023, demonstrating an annual increase of about 4%. This average pertains to all physicians in the industry, regardless of specialty or practice.

Primary care physicians earned an average of $277,000 in 2023, an increase of $12,000 from the year before. Specialists, however, command higher salaries — about $382,000 in 2023. Experts don’t see a decline or recession in the industry anytime soon, so medical salaries should continue to grow.

Specialties

Doctors specializing in certain healthcare and medicine areas tend to earn significantly more money than general practitioners. Specialists receive more extensive training in their chosen areas of expertise and acquire more advanced skills. That advanced knowledge and the limited number of specialists in each field dictate a higher physician salary.

For example, Salary.com estimates that U.S. neurosurgeons will earn an average of $675,701 in 2024, near the top of the list of all physicians. This represents a range between $508,701 and $855,101 (as of March 26, 2024).

Doctors in their “prime earning years” — between 40 and 55 years old — earned an average of $405,000 in the 12 years spanning 2005 and 2017, according to The Washington Post. Tellingly, about 94% of the average income of a doctor in their prime came straight from wages.

The highest-paid doctors in the U.S. are paid a little differently. The top 10% earn an average of $1.3 million, and the top 1% earn upwards of $4 million. However, the lion’s share of those salaries was earned through capital gains — stocks, real estate, and other investments not related to medicine.

Salary by U.S. Region

Surprisingly, there’s quite a variance in doctor’s salaries among different U.S. states. ZipRecruiter reported that doctors in Wisconsin earned the highest average salary in the country, earning an average of $13,684 per month. Alaska, Massachusetts, Oregon, and New Mexico physicians also ranked highly. Florida and West Virginia doctors earned the least, both states coming in at less than $9,000 per month.

Breaking the data down into cities and metropolitan areas uncovers more interesting insights. According to Kanan.co, the top 25 metro areas in the U.S. command the most in salary, with Milwaukee topping the list at $395,363 annually. New Orleans, Riverside (CA), Minneapolis, and Charlotte are close behind.

Gender Gap

Unfortunately, there’s still a glaring discrepancy in the medical salaries of men and women. According to Medscape, male physicians earned an average of about 29% more than their female counterparts. The ratio is roughly the same across primary care providers and specialists.

The disparity between genders is even more pronounced when factoring in incentive bonuses for productivity, retention, recruitment, and other milestones. Males earning these incentives received 67% more in bonuses than females.

Although efforts to bring transparency and equity continue, the gender gap between male and female physicians still exists.

Factors in Determining Doctor Salaries

Several elements and components come into play when calculating physician salaries. Here are just a few.

Location

Where a doctor chooses to practice plays a significant part in how much they’ll earn. Cities with higher cost-of-living indexes tend to pay doctors more, as do areas that have a demand for certain kinds of healthcare services. In general, doctors who serve urban or metropolitan areas make a little more than their rural equivalents.

Specialty

Doctors who specialize in certain branches of medicine tend to be more highly compensated than general practitioners. Neurosurgeons, for example, currently are top earners, followed by orthopedic surgeons, radiation oncologists, and plastic surgeons.

As medical technology advances, so do the prospects of several areas of medical expertise. Right now, the field experiencing the fastest growth is oncology, in which salaries grew by 53% from 2015 until 2023. Other fast-growing sectors include anesthesiology, gastroenterology, radiology, and urology.

Patient Load

Doctors who see several patients and charge on a fee-for-service basis tend to earn more money than those with slimmer client loads. This is simply because having more patients means scheduling more visits, resulting in more income.

Practice Ownership

In general, a self-employed physician earns a higher doctor salary than those directly employed by an institution. A 2023 survey revealed that self-employed doctors earned an annual average of $391,000, while those employed by other companies earned $353,000.

Diversity

Doctors who work in multidisciplinary practices and offer a greater range of services may earn a little more than those with narrower focuses. This is simply because they cater to a wider, more diverse patient base, increasing volume and generating more revenue.

Other Factors behind Doctor’s Salaries

Some other factors that play a part in setting doctor salaries include:

• Reimbursement Structure: Doctors receive reimbursements from insurers or governmental programs for medical services, based on rates these entities set
• Performance: As with most other industries, high-performing doctors tend to earn more than those on the lower end
• School: Rightly or wrongly, doctors who attended prestigious universities with acclaimed medical programs usually command higher salaries than others
• Benefits and Contract Stipulations: Some physicians ask for alternative compensation — stocks, bonds, signing bonuses, relocation costs, and so forth — which can drive earnings up

Market factors, such as demand and scarcity, may also impact a physician’s earnings.

More Growth on the Horizon

The medical industry has been on a near-constant growth trajectory for decades if not centuries. Technological advances and research initiatives suggest this growth won’t cease anytime soon. Although a lot of factors figure into how much a doctor earns, the future still holds a lot of promise for medical practitioners of all kinds.

Originally published at https://www.financeforphysicians.com.