Physician Compensation in the Coming Decade
As an individual who has many close friends piling on student loan debt to obtain that coveted MD, it hurts me the say that physician salaries will likely decline over the coming decade.
As I alluded to in a previous post (http://www.wallstreetoasis.com/forums/medicine-ver...), I think that actuaries at health insurance companies will be more highly compensated than doctors going forward.
As bureaucratic and administrative costs rise, doctors will look for the security of a large health system for stable employment. Couple these ailments with weak reimbursement rates and running a private practice just doesn't make any sense, especially when fresh MD's are saddled with $150k+ of debt.
For the sake of argument, let's say that a doctor with a large appetite for risk opens up a private practice. How can this business compete with the likes of huge health care conglomerates? They can't, health care systems know this, and so little mom and pop shops are selling their practices.
As TechBanking said,
....The day of the private practice is over. They are all being gobbled up by healthcare systems that are Kaiser clones. Doctors are becoming just another big corporate employee. There is a reason why there is a doctor shortage in the UK and Canada. It's simply not worth the time to get the MD, if you aren't going to get paid.
What are your thoughts, monkeys?
To further my point, take a
To further my point, take a look at this link:
Interesting Study
my physician and surgeon pals
my physician and surgeon pals are on their 3-4th fellowships, etc. because the market is sucking so hard. especially for all cash specialties (plastics) their expectations are adjusting finally to reality. expecting to make a full buck and a half in their career prime, they are now happy with a 60K fellowship in the boonies.
/schadenfreude
The whole healthcare system,
The whole healthcare system, particularly in the United States, is distended from reality. Medical school is too expensive and doctor's pay is not allotted to value of service rendered. Malpractice insurance is skyhigh. The inefficiencies are mind-boggling.
Bene qui latuit, bene vixit- Ovid
It is ignorant to allude to
It is ignorant to allude to physician compensation as a general trend given the enormous range and variance by speciality and practice. That said, in general you can assume that specialties involving the providing of services (cardiology, GI, IR, Urology, etc) will continue to fare well in compensation because they are performing services instead of simply diagnosing and reimbursement will remain relatively strong for them in the near future. The advent of value versus volume based reimbursement is still in its nascent stages with the coming of ACOs, which really is just IPA v2.0 since IPA v1.0 failed miserably in the 90s; physicians as it turns out are poor finance managers, are they ebtter roday? My guess is not really.
For physicians involved in the diagnosis only (primarty care, nuerology, etc), compensation will continue to be limited as reimbursement curtails in the face of cost controls.
Also, healthcare is undergoing an enormous transofrmation right now with a rollup strategy. Independent physicans can no longer practice alone given the high operating leverage and diminishing margins they face from Medicaid and Medicare reimb cuts. So, there is a roll up strategy going on with larger healthcare systems buying out hpysician groups to gain access to commercial patients and large physician organizations buying out smaller indep practicing physicians. What happens when a physician goes from self-employed to now working for a large healtcare system? Well, simple, compensation falls as risk falls since now you're an employee like everyone else and you have less risk to assume.
What offsets this reduction in compensation can potentially be better negotiating powers with payors as large healthcare systems control the market. However, does higher reimbursement translate into higher compensation for physicians now employees of hospitals? That remains to be seen as exec mgmt of hospitals and boards are not used to smart incentivized plans and don't have a history of doing as as opposed to forprofit entities, remember healthcare is predominately nonprofit for tax incentives and access to municipal debt cap markets.
I say at the end of the day, physician comp will continue to be squeezed as they stop practicing independelty. The guys who will contineu to pull 500k+ will be those providng procedures and of course surgeons.
The days of your primary care physician making 600k and specalists making 2MM are over. Way overrrrrr.
I am sorry but I cant
I am sorry but I cant sympathize only because I believe it is a right risk-reward level, physicians might not all make 1bn, but the salary floor is quite high, plus there will always be a job for them to do. I talk from a latam perspective of course, where going into finance is far riskier proposition, but talking with my friends, most of them finishing medicine, what I see is that either what they really miss is the "respect" and "prestige" that has been lost under medicare-like systems or they are just the greediest SOBs as a profession I've met, for they feel entitled to earn a gazillion, have full guarantee of employment, and be revered by the common man, all because they spent a lot of time studying. I just believe that amount of effort to be the right cost of having a high earnings floor in this competitive world of ours.
Valor is of no service, chance rules all, and the bravest often fall by the hands of cowards. - Tacitus
Dr. Nick Riviera: Hey, don't worry. You don't have to make up stories here. Save that for court!
socola2003: It is ignorant to
It is ignorant to allude to physician compensation as a general trend given the enormous range and variance by speciality and practice. That said, in general you can assume that specialties involving the providing of services (cardiology, GI, IR, Urology, etc) will continue to fare well in compensation because they are performing services instead of simply diagnosing and reimbursement will remain relatively strong for them in the near future. The advent of value versus volume based reimbursement is still in its nascent stages with the coming of ACOs, which really is just IPA v2.0 since IPA v1.0 failed miserably in the 90s; physicians as it turns out are poor finance managers, are they ebtter roday? My guess is not really.
For physicians involved in the diagnosis only (primarty care, nuerology, etc), compensation will continue to be limited as reimbursement curtails in the face of cost controls.
Also, healthcare is undergoing an enormous transofrmation right now with a rollup strategy. Independent physicans can no longer practice alone given the high operating leverage and diminishing margins they face from Medicaid and Medicare reimb cuts. So, there is a roll up strategy going on with larger healthcare systems buying out hpysician groups to gain access to commercial patients and large physician organizations buying out smaller indep practicing physicians. What happens when a physician goes from self-employed to now working for a large healtcare system? Well, simple, compensation falls as risk falls since now you're an employee like everyone else and you have less risk to assume.
What offsets this reduction in compensation can potentially be better negotiating powers with payors as large healthcare systems control the market. However, does higher reimbursement translate into higher compensation for physicians now employees of hospitals? That remains to be seen as exec mgmt of hospitals and boards are not used to smart incentivized plans and don't have a history of doing as as opposed to forprofit entities, remember healthcare is predominately nonprofit for tax incentives and access to municipal debt cap markets.
I say at the end of the day, physician comp will continue to be squeezed as they stop practicing independelty. The guys who will contineu to pull 500k+ will be those providng procedures and of course surgeons.
The days of your primary care physician making 600k and specalists making 2MM are over. Way overrrrrr.
So it is ignorant to say anything about "physician compensation as a general trend given the enormous range and variance by speciality and practice," but you "say at the end of the day, physician comp will continue to be squeezed as they stop practicing independelty."
That makes sense.
The fact remains that the
The fact remains that the baby boomers are getting old and will continue to demand healthcare while it is still difficult to become a doctor. Low supply, high demand = (Relatively) High wage. I understand that a primary care physician's salary of $150k is considered poverty on this website, but it's still well above the salary of the majority of people in this country.
Thurnis Haley: The fact
The fact remains that the baby boomers are getting old and will continue to demand healthcare while it is still difficult to become a doctor. Low supply, high demand = (Relatively) High wage. I understand that a primary care physician's salary of $150k is considered poverty on this website, but it's still well above the salary of the majority of people in this country.
low supply and high demand mean high physician salaries if the insurance companies weren't taking increasingly bigger cuts of a smaller monopsonistically-mandated government reimbursement rate.
On the other hand, if you're
On the other hand, if you're going into medicine for the money, you're probably in it for the wrong reasons. Not saying that compensation isn't a factor at all, but in that occupation, it really shouldn't be the prime motivation.
Thurnis Haley: The fact
The fact remains that the baby boomers are getting old and will continue to demand healthcare while it is still difficult to become a doctor. Low supply, high demand = (Relatively) High wage. I understand that a primary care physician's salary of $150k is considered poverty on this website, but it's still well above the salary of the majority of people in this country.
Take a look at the debt overhang in the image that I posted. $150k isn't bad with no debt, but it's close to downright poverty when you are over $300k in the hole, paying a high tax rate and in your mid-30's, possibly with a family.
TechBanking: socola2003: It
It is ignorant to allude to physician compensation as a general trend given the enormous range and variance by speciality and practice. That said, in general you can assume that specialties involving the providing of services (cardiology, GI, IR, Urology, etc) will continue to fare well in compensation because they are performing services instead of simply diagnosing and reimbursement will remain relatively strong for them in the near future. The advent of value versus volume based reimbursement is still in its nascent stages with the coming of ACOs, which really is just IPA v2.0 since IPA v1.0 failed miserably in the 90s; physicians as it turns out are poor finance managers, are they ebtter roday? My guess is not really.
For physicians involved in the diagnosis only (primarty care, nuerology, etc), compensation will continue to be limited as reimbursement curtails in the face of cost controls.
Also, healthcare is undergoing an enormous transofrmation right now with a rollup strategy. Independent physicans can no longer practice alone given the high operating leverage and diminishing margins they face from Medicaid and Medicare reimb cuts. So, there is a roll up strategy going on with larger healthcare systems buying out hpysician groups to gain access to commercial patients and large physician organizations buying out smaller indep practicing physicians. What happens when a physician goes from self-employed to now working for a large healtcare system? Well, simple, compensation falls as risk falls since now you're an employee like everyone else and you have less risk to assume.
What offsets this reduction in compensation can potentially be better negotiating powers with payors as large healthcare systems control the market. However, does higher reimbursement translate into higher compensation for physicians now employees of hospitals? That remains to be seen as exec mgmt of hospitals and boards are not used to smart incentivized plans and don't have a history of doing as as opposed to forprofit entities, remember healthcare is predominately nonprofit for tax incentives and access to municipal debt cap markets.
I say at the end of the day, physician comp will continue to be squeezed as they stop practicing independelty. The guys who will contineu to pull 500k+ will be those providng procedures and of course surgeons.
The days of your primary care physician making 600k and specalists making 2MM are over. Way overrrrrr.
So it is ignorant to say anything about "physician compensation as a general trend given the enormous range and variance by speciality and practice," but you "say at the end of the day, physician comp will continue to be squeezed as they stop practicing independelty."
That makes sense.
You're an idiot. I wrote that non-procedure performing physician reimbursements will continue to be squeezed while their alternatives will continue to fare well in a tightening reimbursement/roll up market. I stand by what I wrote earlier and it paints a fair picture based on my idnustry experience and knowledge. Either know wtf you're talking about and come talk to me after spending your entire career in healthcare and having sold a med device company and been invited to ring the NASDAQ or stfu.
socola2003: TechBanking:
It is ignorant to allude to physician compensation as a general trend given the enormous range and variance by speciality and practice. That said, in general you can assume that specialties involving the providing of services (cardiology, GI, IR, Urology, etc) will continue to fare well in compensation because they are performing services instead of simply diagnosing and reimbursement will remain relatively strong for them in the near future. The advent of value versus volume based reimbursement is still in its nascent stages with the coming of ACOs, which really is just IPA v2.0 since IPA v1.0 failed miserably in the 90s; physicians as it turns out are poor finance managers, are they ebtter roday? My guess is not really.
For physicians involved in the diagnosis only (primarty care, nuerology, etc), compensation will continue to be limited as reimbursement curtails in the face of cost controls.
Also, healthcare is undergoing an enormous transofrmation right now with a rollup strategy. Independent physicans can no longer practice alone given the high operating leverage and diminishing margins they face from Medicaid and Medicare reimb cuts. So, there is a roll up strategy going on with larger healthcare systems buying out hpysician groups to gain access to commercial patients and large physician organizations buying out smaller indep practicing physicians. What happens when a physician goes from self-employed to now working for a large healtcare system? Well, simple, compensation falls as risk falls since now you're an employee like everyone else and you have less risk to assume.
What offsets this reduction in compensation can potentially be better negotiating powers with payors as large healthcare systems control the market. However, does higher reimbursement translate into higher compensation for physicians now employees of hospitals? That remains to be seen as exec mgmt of hospitals and boards are not used to smart incentivized plans and don't have a history of doing as as opposed to forprofit entities, remember healthcare is predominately nonprofit for tax incentives and access to municipal debt cap markets.
I say at the end of the day, physician comp will continue to be squeezed as they stop practicing independelty. The guys who will contineu to pull 500k+ will be those providng procedures and of course surgeons.
The days of your primary care physician making 600k and specalists making 2MM are over. Way overrrrrr.
So it is ignorant to say anything about "physician compensation as a general trend given the enormous range and variance by speciality and practice," but you "say at the end of the day, physician comp will continue to be squeezed as they stop practicing independelty."
That makes sense.
You're an idiot. I wrote that non-procedure performing physician reimbursements will continue to be squeezed while their alternatives will continue to fare well in a tightening reimbursement/roll up market. I stand by what I wrote earlier and it paints a fair picture based on my idnustry experience and knowledge. Either know wtf you're talking about and come talk to me after spending your entire career in healthcare and having sold a med device company and been invited to ring the NASDAQ or stfu.
Well, now you've called me ignorant and an idiot, while basically making the same point that I was. Your writing skills are clearly crap, or you could have made your point more succinctly and more effectively. I generally agree with what you wrote, but as you mentioned at the bottom of your post, even specialist income is coming down. Surgeons, etc. will still make more money than primary care guys, that isn't changing. Maybe it's not happening as fast, but anyone touching insurance/Medicare/Medicaid reimbursements is going to earn less. That is all that I was referring to.
Good for you selling a med device company - was it as a banker or founder? I've been involved in selling a couple of HC IT/digital health companies as a banker, and now I run my own. Ringing the bell at the NASDAQ is so 1998...you win.
socola2003: Either know wtf
Either know wtf you're talking about and come talk to me after spending your entire career in healthcare and having sold a med device company and been invited to ring the NASDAQ or stfu.
In your profile you list your birthday as 11/15/84, meaning you are now 27 years old. You also say that you have a Kellogg MBA. Assuming a standard graduation age of 22 and two years of b-school, your entire vaunted career amounts to 3 years. Maybe I'm wrong and you started undergrad at 12. I will now happily stfu on this thread...flame away.
^^^hahahaha^^^
^^^hahahaha^^^
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TechBanking: socola2003: Ei
Either know wtf you're talking about and come talk to me after spending your entire career in healthcare and having sold a med device company and been invited to ring the NASDAQ or stfu.
In your profile you list your birthday as 11/15/84, meaning you are now 27 years old. You also say that you have a Kellogg MBA. Assuming a standard graduation age of 22 and two years of b-school, your entire vaunted career amounts to 3 years. Maybe I'm wrong and you started undergrad at 12. I will now happily stfu on this thread...flame away.
nice.
wadtk: TechBanking: socol
Since the AMA is the greatest
"When I was young I thought that money was the most important thing in life; now that I am old I know that it is."
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don't understand why this is
I didn't say it was your fault, I said I was blaming you.
I'm in pharmaceutical. A top
Hey guys, I know next to
Given the level of childhood
It's a combination of