Physician compensation is up in general though down for some specialties - the interesting question is ‘Why’?
The average annual salary for doctors has been climbing steadily, rising from about $300 thousand to about $350 thousand over the last 5 years, which of course include some of the most trying years with some of the most intense stress testing that the US Healthcare system has ever had to endure.
Despite the high stakes and resolve-requiring working conditions that were thrust upon health care workers of all stripes, not all physician specialties have experienced an equal rate of compensation growth, and in fact some types of doctors have seen average compensation decline across the field.
As costs have risen while reimbursements lag behind inflation, some budgetary tightening was to be expected, but a deeper look into the particular specialties where average compensation fell provides some interesting insights into the state of the healthcare system at large today.
The specialty with the largest reduction in average salary was Ophthalmology, which saw a 7% decrease in average compensation across the field. Given what we know about how Covid has changed both behavior as well as the makeup of the population, perhaps one explanation for this occurrence is simply a reduction in demand?
One quote from a responding physician that was highlighted in the report noted that elderly people had been slow to come back into the office following the pandemic.
As it happens, this trend would be especially harmful to the bottom lines of ophthalmologists given that according to the American Academy of Ophthalmology, the only doctors who see more patients aged 65 and older than ophthalmologists are geriatricians who specialize specifically in caring for elderly patients, of course.
Considering how skewed the ophthalmological patient pool is toward the older end of the spectrum, it's no surprise from an economic perspective that fewer people seeking out their services would lead to a decrease in the value of the services ophthalmologists provide.
This rationale about the reluctance of the elderly to resume in-person appointments would seem to apply similarly well in explaining why rheumatologists were another of the few groups of specialists that saw their average annual salary go down last year. That said, the drop was much less steep at 3% for rheumatologists, which was less than half of the 7% reduction registered by ophthalmologists, though that gap may be explained in part by patients’ prioritizing treatment for movement, pain, and inflammation over vision-related care.
More morbidly, in both the literal and figurative sense, however, the reality is that residual hesitance about viral exposure in waiting rooms - or in public generally for that matter - is not the only factor suppressing demand among the elderly patient pool for medical services or otherwise. The grim truth is that the mutated coronavirus that came onto the world stage in 2019 had disproportionately devastating outcomes for the older demographic, with the Kaiser Family Foundation estimating that Americans age 65 and older accounted for 80% of COVID deaths in the US despite only making up 16% of the population.
Much like the elderly, those with preexisting conditions and vulnerabilities - specifically those with immune system disorders - were particularly susceptible to severe COVID infection. According to the Centers for Disease Control and Prevention and Yale Medicine, immunocompromised patients made up 12.2% of a sample of more than 20 thousand adults who were hospitalized with COVID, despite the fact that people only about 3% of the population as a whole is considered moderately or severely immunocompromised.
Does this pattern and the accompanying demand reduction in part explain why immunologists saw a 5% drop in their salary last year? Maybe the 5% drop in doctors who specialize in kidney issues could be similarly contextualized, given that people on dialysis machines tend to be immunosuppressed, not to mention that almost 40% of dialysis patients are 65 and older to begin with.
The only other two medical specialties that saw their average compensation go down last year were physical medicine/rehabilitation at minus 5% and emergency medicine at minus 6%, neither of which would seemingly have been influenced by the above demand-reducing factors to the same degree as the previously discussed specialties.
On the other hand, a different possible economic justification for these salary dynamics does seem available if you look at supply issues instead of demand.
Another physician quote highlighted in the report describes how overcrowding at the hospital puts a cap on the total number of patients they can see in a shift.
A limited number of available beds and/or necessary equipment will not only restrict how many patients can be cared for and processed through the system, of course, which in turn will hurt the bottom line from an administrators point of view, but it also limits the types of care that will be accommodated.
When facing system limitations like that, prioritization will always come into play, and a bed supply shortage that is negatively affecting the number of emergency patients that can be seen, is likely to spill over into areas like rehabilitation clinics, as well, which tend to require spacious facilities and host patients with less urgent conditions. Rehabilitation patients were likely more reluctant to visit already overcrowded hospitals to meet their needs in the first place, as well.
The vast majority of fields of medical specialization saw significant growth in average annual salary, to be clear, with oncology and gastroenterology at the top of the list with plus 13% and plus 11% annual average compensation growth, respectively. Further, there were some other encouraging bits of data including the narrowing of the pay gap between men and women doctors in general, which fell for the first time in half a decade, dropping 6 points from 25% in 2021 to 19% in 2022.
But taking a look at the medical specialties whose skills seemed to lose market value coming fresh off a period when that healthcare system was put to the ultimate test provides a particular glimpse into the healthcare system at this particular point in time that’s deserving of additional consideration.
You can read more about that data and analysis here.
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