Scaling back
While private-pay physicians tend to make more than peers who work in community or government health clinics, they may have to work longer hours or face pressure to see more patients, which can decrease the quality of care they provide.
A recent study, published in JAMA Health Forum, found that most health systems base physician pay on the number of patients seen. That’s the case for more than 80% of primary care physicians and more than 90% of specialists, according to the study.
Given that landscape, a growing number of physicians are opting for a “lifestyle” practice – accepting lower compensation in order to see a limited number of patients or work only a few days per week, says Stu Schaff, the founder and lead adviser of Contract Medicine, a consulting firm that helps physicians understand, evaluate, and negotiate their employment contracts. Mr. Schaff concedes that most of the doctors who fall into this category are winding down their careers or have a high-earning spouse with a salary that offsets their lower income.
Other physicians move into administrative roles within a hospital or health center. Such positions typically involve seeing fewer patients and may pay less, but they also have more traditional hours, which can be appealing, Mr. Schaff says.
“Those folks might still do patient care 1 or 2 days a week, or even less,” he says. “They’re still physicians. They’re still using their physician expertise, but they’re not practicing at the same level or generating the same level of income as they might in a full-time clinical position.”
Cost of living matters
Dr. Kissel says that while he may take home less than the typical physician, he still makes enough to comfortably cover his expenses, including his student loan payments. Still, when new acquaintances learn he’s a physician, they often assume he’s earning much more.
“People assume most of us make mid-$300,000’s or low $400,000’s, and that’s true for some family doctors, but not for all,” he notes. “I like what I do. I’m in a good place, and we are happy with our life.”
Plus, Dr. Kissel may benefit from living in Utah, where the lower cost of living may allow him to stretch his salary further. Although salaries are typically higher in the most expensive states in the United States, compared with states that have a lower cost of living, those higher salaries aren’t always enough to make up the difference.
A recent WalletHub analysis found that New York, California, and Massachusetts were among the states with the lowest average annual wage when adjusted for the cost of living, while South Dakota, Indiana, and Wisconsin had the highest average wage after the adjustment.
“Even if a physician is in a lower-paying specialty or location, they’re still well-paid relative to the average U.S. citizen,” Mr. Schaff says. “When we talk about specialties that pay less, we’re still talking – if you’re full-time – about a six-figure income.”
Location, location, location
To combat a provider shortage, rural health centers have been increasing the pay doctors receive. Nevertheless, many physicians are opting not to live in a community where they have no connection.