What is the highest paying specialist?

According to the latest statistics, physicians working in the orthopedics specialty are the highest earning doctors in the US, with an average annual income of US$511K.

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What is the Highest Paid Doctor in the US?

It is very difficult to calculate the average annual income of a US physician. Not only does income depend on the doctor’s specialty, but it is also affected by a variety of factors, such as the state where they practice and their employment status, i.e., do they have their own practice or are they employed by a medical facility or institution?

I have compiled lists of medical specialties in the US and Canada with the highest annual income based on several sources, including Medscape, LinkedIn, Indeed, and the Canadian Institute for Health Information. Let’s start with the US. Click on the "Income" heading in the table to organize the specialties from highest to lowest income, or vice versa.

How Do Doctors Get Paid in the US?

This is an extremely complicated question. It is especially difficult to determine and articulate how doctors get paid in the United States. As I already mentioned earlier in this blog, their income is dependent on many factors including employment status, state of practice, and of course, specialty. Additionally, the healthcare landscape in the United States is constantly changing with the introduction of new bills, laws, and other institutional changes, such as the Affordable Care Act. Let’s review the different factors that determine a doctor’s income in the United States.

Private Practice vs Employed

Latest statistics show that self-employed physicians earn more than employed physicians, with self-employed physicians earning an average of $395K annually and employed physicians earning $289K annually. According to a report by the American Medical Association (AMA), the main difference in how doctors get paid lies in the ownership status, i.e., employed vs private practice. The difference is not in income, per se, but how doctors earn their living. For example, physicians employed in hospitals, medical centers, and other similar institutions, cite salary as their main mode of compensation. Private professionals can also get paid in salary, but the number of self-employed doctors who are paid by salary is much lower. According to the AMA report, over 46% of employed doctors indicate that more than half of their income is based on salary, while only 25.6% of owners indicate the same. The compensation of private physicians tends to rely on their personal productivity. However, this is not to say that employed physician’s income does not depend on productivity – it does, but much less than their private counterparts’ income. As expected, financial performance was only important in the compensation of private physicians; but only 10% of private practice owners indicated that it was the sole factor in determining their income.

Did you know that only 47.1% of doctors in America remain in private practice?

So, how do private physicians get paid? As with any private business owner, a self-employed doctor’s personal income can be determined after all the other business bills and expenses are paid. The doctor’s office sees patients, documents their visits, bills the patients or their insurance companies, and receives a flow of revenue. So, let’s say a doctor's office made US$350,000 in one year. The cost of running the business is US$200,000 (rent, employers' salaries, leases, supplies, etc.) This means that the owner or owners of the practice are left with $150,000 income, which is then shared between them. It is in the best interest of private practices to serve as many patients per day as possible. Their revenue heavily depends on the number of patients they see and bill per day. Simply put, if the number of patients goes down, so does the revenue of a private doctor’s office. However, in recent years, private practice has become less popular with physicians in the US. According to recent data from the AMA, only 47.1% of physicians in America remain in private practice. Let's examine the reasons for this phenomenon. Running a private business as a physician is no simple task. Most doctors get frustrated and tired of the regulations and responsibilities of managing a multi-million-dollar enterprise. According to the latest research, 26% of polled physicians stated that rules and regulations of the healthcare system are the most challenging part of their job. On top of dealing with employees and paying rent, they have to deal with their patients’ insurance companies and Medicare, as well as malpractice insurance companies covering their business. For many, becoming an employee of a hospital provides peace of mind and a stable income. And even though employed physicians are also expected to demonstrate high productivity, their salaries are technically not dependent on it. Yet, this too is overly simplistic. US hospitals have created a protection for reduced physician productivity. Many hospitals in the United States have created different pay packages for their employed physicians; this way, the hospitals tried to reward hard work performed by doctors. The work relative value unit (wRVU) system attempts to compensate physicians for extra work or demonstrated enthusiasm, such as seeing more patients. In this way, the model of revenue and income of private practices is also present in larger institutions – the more patients the doctor serves, the higher his/her pay is. Currently, many healthcare systems in the United States are looking to change their pay structures to adapt to certain Medicare rules, but it is difficult to imagine that the US healthcare system will move away from rewarding physicians based on the number of patients they see. However, a lot of attention is also being paid to quality and efficiency, which means that the value of care delivery will also consider more than the number of patients served. As you can imagine, it is extremely difficult to find this balance. As with all business models, pay in healthcare is mostly dependent on productivity. However, the shift in healthcare compensation hopes to align pure productivity with quality of care.

Income Difference by State

The state of practice also influences doctors’ income. You would think that states with the largest populations would see the highest incomes for doctors, but this is not the case. Interestingly, states like New York and California do not even crack the top 10 states with the highest paid doctors. This may be due to several factors. Large and economically developed states like New York and California offer an abundance of healthcare options, which means that patients have a lot of options when it comes to choosing their healthcare provider. This means that, on average, there are fewer patients per physician. As we already discussed, the US healthcare system is built around earnings based on the number of patients served – which is why states with large populations and abundant healthcare options have a lower average income per physician. While states like Kentucky, Tennessee, and Alabama are some of the top-earning states for physicians overall, healthcare options are more limited in these states, i.e., not as many doctors, hospitals, private practices, and other medical facilities. This means that there are more patients per doctor than in New York, for example. Perhaps this explains why the average salary of a physician in Kentucky is higher: he/she serves more patients than his/her counterpart in New York, where there is more competition for patients. Hence, Kentucky has a higher average income per physician than in New York. Now, let’s go over 10 top-earning states for physicians in the US. Click on the "Average Income/Physician" heading in the table to organize it from highest to lowest income, or vice versa.

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Income Difference by Specialty

On average, primary care practitioners in the US earn $297K, while specialists earn $357K. I have already provided you with a list of the highest paid doctors in the US based on specialty. You can see the table at the beginning of this blog. So, why does specialty determine a doctor's income? Simply put, some specialties require more skill, and therefore, more training. For example, as you could see from our list, surgical specialties such as orthopedics, cardiology, radiology, and plastic surgery are some of the highest paid doctors in the US. These specialties are procedure-based and require 5 or 6 years of additional residency training after graduation from medical school. These specialties also tend to demand post-residency, subspecialty training such as fellowships. Therefore, these specialists get paid more. Primary care specialties such as family medicine, internal medicine, pediatrics, etc., require less training. One can become a practicing family physician after 6 years of medical education and training (4 years of medical school and 2 years of residency). Therefore, physicians practicing in these specialties earn less. The upside is that they have smaller school debt and enter the workforce quicker by spending less time and money on specialty training. This also means that they accrue less debt because they can start paying off their debt earlier. When it comes to specialty, you should also consider demand in the healthcare field. An increase in salary or earnings based on specialty often foreshadows a shortage in that specialty.

MD vs DO Salary

After speaking about specialty, I cannot avoid mentioning the difference in salary between DO vs MD physicians. While DO and MD physicians make comparable money when they practice in the same specialty, specialty options are a little bit more limited for DO physicians. According to the latest Main Residency Match data, DO and MD graduates are equally competitive for primary care specialties like family medicine, with 1,392 DO seniors and 1,543 MD seniors matching last year. However, DOs are less represented in those lucrative surgical specialties we have talked about. For example, 23 MD seniors managed to match a dermatology residency, one of the most competitive residencies in the US, while only 6 DO seniors matched this same specialty. Another example is orthopedic surgery, with 686 MDs matching vs 112 DOs matching this specialty.

Learn what are the most and least competitive residencies in our video:

And while there is still a discrepancy in the numbers, you should know that there has been a big increase in DO representation in surgical, competitive specialties. This is mostly due to the changes in the accreditation of residency programs. Previously, osteopathic and allopathic residencies were accredited by different institutions: the former was accredited by the American Osteopathic Association (AOA) and the latter by the Accreditation Council for Graduate Medical Education (ACGME). Now, both DO and MD programs are accredited by the ACGME, which gives osteopathic residency programs the same status and opportunities as allopathic programs. Additionally, the same accreditation system allows DOs to participate in MD programs (with the condition that they fulfill all the requirements, such as completing the United States Medical Licensing Exam) and for MDs to participate in programs with “Osteopathic Recognition” designation (also with the condition that they fulfill all the requirements that differ by program). Simply put, the unified accreditation system is closing the gap between DO vs MD residents. With time, the difference in numbers between DO and MD residents will likely shrink. However, remember what DO stands for - don’t forget that DOs do have a particular philosophy that leads them to pursue primary, non-intrusive medical care specialties. While DOs are certainly capable of becoming surgeons, their tenets still affect their choice in specialties and where they practice. This means that the difference between DO and MD salaries may remain.

Learn the main differences between DO and MD medical approaches:

What are the Highest Paid Doctors in Canada?

Let's review the list of the highest average gross clinical payments by physician specialty in Canada. To calculate the average gross clinical payments made to physicians by provincial or territorial healthcare systems, the Canadian Institute for Health Information (CIHI) divides the sum of all gross clinical payments, i.e., fee-for-service information and alternative payments, by the total number of physicians in a specialty. Click on the "Average Gross Payment" heading in the table to organize the specialties from highest to lowest payment, or vice versa. I just want to emphasize that this is GROSS income. Most physicians in Canada, especially those working fee-for-service, work as independent contractors running their own small business. So, all the costs associated with having a business, typically called overhead costs, are taken out of this gross income. Therefore, the take-home pay can be notably less. These overhead expenditures are similar to those of self-employed physicians in America and include rent, equipment, and staff. A big chunk of this gross income goes to liability insurance, which all physicians must have. The cost for liability insurance varies by specialty, as do overhead costs. They can be anywhere from 20%-60%. Also note that such physicians do not get taxes deducted, paid parental leave, vacations, benefits of any kind, or retirement contributions.

How Do Doctors Get Paid in Canada?

Firstly, Canada does not have many private healthcare institutions. Unlike the US, Canada has a universal healthcare system with a unified payment system for each of the provinces and territories, as healthcare remains the prerogative of provincial governments. Each province oversees its own healthcare system and payments. The income of physicians in Canada certainly depends on the province where they practice. Most Canadian physicians are paid based on the services they provide. The fee-for-service program (FFS) amounts to 73% of payments made to physicians by their provincial or territorial healthcare systems. These services are typically divided into 2 categories: consultations/visits and procedures. Generally, procedures have higher fees than consultations or counseling, but this is slowly shifting to prioritize preventive care. And even though primary care physicians, like family doctors, perform the greatest number of services and receive the largest portion of the healthcare budget, physicians in other specialties, especially surgery, earn more because their services cost more. For example, the average cost per family physician’s service is about $50, while a service by a neurosurgeon costs $250. Additionally, the CIHI also considers alternative clinical payments in their calculations, such as salary, sessional positions, capitation, etc. This kind of compensation varies by province. Another model of payment in Canada is alternate plans. For example, in Alberta, these are called alternative remuneration plans (ARPs). Generally, these combine fee-for-service with some fixed income and help compensate physicians who teach or do research. Typically, when a physician becomes an instructor for residents, he/she sees fewer patients as time is taken by teaching. However, to encourage teaching, this is balanced with some fixed payment in combination with FFS billing.

The FFS makes up 73% of payments made to Canadian physicians:

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Conclusion

Choosing a specialty, employment status, or state/province in which to practice based on money is not wise. Remember, money cannot sustain your dedication and passion for medicine. If you are planning to become a physician in the United States, in many ways, your personality and experiences will determine not only your specialty but your employment status. While some enjoy the autonomy and self-direction of owning a private practice, many doctors prefer the stability and steady income that employment provides. While it is difficult to make accurate calculations about what is the highest paid doctor, there is no denying that physicians are some of the highest paid traditional professionals in North America. When you consider physicians’ incomes, you should keep in mind how long it takes to become a doctor – it is a huge investment of your time, money, efforts, and mental health. Most doctors continue paying off their medical school debt long after they graduate, so their generous incomes help them repay what they owe. In addition to debt, the vocation of a physician is not for the faint of heart. It involves duties and responsibilities most of us cannot imagine. And while there are a lot of challenges associated with being a doctor, the latest survey done by Medscape demonstrates that 77% of polled physicians would choose medicine again if they were still deciding on a career path.

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FAQs

1. What are the highest paid doctors in the United States?

According to the latest statistics, physicians working in the orthopedics specialty are the highest earning doctors in the US, with an average annual income of US$511K.

2. What are the highest paid doctors in Canada?

According to the latest data from the CIHI, ophthalmologists have the highest annual earnings of all other specialties in Canada, with an average annual income of CAD$791,000. However, keep in mind that this is gross payment - after the deduction of overhead costs, the take-come pay is less.

3. What affects a doctor’s income in the United States?

The main factor that influences a doctor’s pay in the US is his/her employment status, i.e., whether they are self-employed or employed by a hospital or other medical facility. A doctor’s specialty also has a great effect on their income. Surgical specialties are some of the highest paid medical doctors, while primary care practitioners are the lowest. The state of practice also influences a doctor’s income. Check out a list of 10 top-earning states for physicians in the US in our blog.

4. How do doctors in the US get paid?

The way you get paid as a doctor in the US mostly depends on your employment status. If you are a self-employed doctor running a private clinic, your income will be dependent on how many patients you serve. While this is also somewhat a factor for employed physicians, they have set, more stable salaries.

5. How do doctors get paid in Canada?

In Canada, the healthcare system is the responsibility of provincial or territorial governments. Where you practice will affect your income. However, all Canadian provinces use the fee-for-service program (FFS), which means that most doctors' incomes are directly affected by the services they provide. And just like in the US, a service by a physician in a surgical specialty costs more than a service by a primary care physician.

6. Why do physicians in primary care get paid less?

While primary care physicians do see more patients on average and perform the most common duties of a doctor, they charge less per service than specialists. This is mostly because they require less education and training than doctors in surgical specialties. In Canada and the US, becoming a family doctor takes about 6-7 years, while it takes 9 or 10 years to become a doctor in a surgical specialty. These specialties require extra skill and therefore their services end up costing more than the services of primary care physicians.

7. Are there any monetary advantages of becoming a primary care physician vs a specialist?

Yes, specialists do earn more, but they also spend more time and money on education. I am not here to dissuade anyone from becoming a specialist – but, money should not be the reason you want to pursue a certain specialty. While primary care physicians earn less money than specialists, they have less student debt and can start working after a total of 6 or 7 years in medical school and residency, which allows them to get involved in patient care sooner than specialists and pay off their debt (which will be smaller than a specialist’s).

8. Is there a difference between the income of DO and MD physicians?

Yes, there is a difference between the average income of DO and MD doctors in the US. But it is a misleading statistic. The average income of DO physicians in the US is about $164K annually, while the average income of an MD physician in the US is about $202K. These averages are calculated while considering DO and MD physicians of all specialties. This means that when these numbers were calculated for MDs, the income of surgical and primary care physicians in the US participating in this survey were summed up and divided by the number of physicians. Same with DOs. However, DOs are less represented in lucrative surgical specialties, and therefore the calculated average income of DOs is smaller than that of MDs. When DOs and MDs practice in the same specialty, their income is comparable.

To your success,

Your friends at BeMo

BeMo Academic Consulting

Sources for income data: Medscape Physician Compensation Report and the Canadian Institute for Health Information

bemoacademicconsulting.com - Highest Paid Doctors in 2022 - BeMo Academic Consulting

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