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10 Takeaways from the Latest Medscape Compensation Report for Physicians Under 40

Oct 16, 2024

Navigating the healthcare landscape as a young physician can be daunting, especially as the expectations and financial realities evolve in tandem with medical advancements and patient care demands. Medscape's latest report, How Much Green Comes with the White Coat?, sheds light on these changes by surveying over 7,000 physicians across 29 specialties. The findings not only highlight compensation trends but also delve into broader career experiences, side gigs, and the lingering burden of student debt.

For those of you under 40, this report is a critical snapshot of where the profession stands today, particularly in terms of compensation, work-life balance, and financial wellness. Whether you're just starting your career or looking for ways to grow your micro-corporation, understanding these insights will help you position yourself for long-term success.

Here are 10 key takeaways from the report and how they can inform your career decisions.

1. Average Physician Earnings Are Increasing, but Slowly

The Medscape report reveals that the average annual earnings for physicians under 40 have risen by 4%, from $326,000 in 2022 to $338,000 in 2023. While any increase is welcome, this pace doesn’t always match the rising costs of education, housing, and inflation. For many young doctors, this means careful financial planning and exploring additional revenue streams through side gigs or creating a micro-corporation to increase their income potential.

Takeaway: The opportunity for higher earnings exists, but it’s increasingly important to think beyond traditional employment structures and consider how establishing your own practice or corporation could increase your earnings.

2. Primary Care Physicians See a Notable Pay Increase

Primary care physicians (PCPs) experienced a 5% rise in earnings, moving from an average of $257,000 in 2022 to $271,000 in 2023. While PCPs still earn less than specialists, this increase reflects the growing demand for primary care services, especially in underserved areas and rural populations. For physicians interested in entering the telehealth space or expanding their reach via cash-based primary care services, this is a promising trend.

Takeaway: Primary care remains a growing and profitable field, especially when combined with telehealth services or cash-based models that circumvent the traditional insurance structure.

3. Specialist Earnings Remain Flat

While primary care salaries grew, specialist earnings remained nearly stagnant, rising only marginally from $355,000 in 2022 to $357,000 in 2023. This plateau may reflect market saturation in certain specialties or shifts in healthcare spending.

Takeaway: Specialists may benefit from diversifying their income streams through medical side gigs, legal consulting, or creating micro-businesses that allow you to offer niche, in-demand services without being entirely reliant on salary increases within their field.

4. Gender Pay Disparities Persist

The gender pay gap remains significant, with male physicians earning an average of $374,000 in 2023, compared to their female counterparts, who earned $302,000. This gap, over $70,000 annually, illustrates the ongoing challenges for women in medicine, even as they enter the marketplace with equal or greater qualifications.

Takeaway: For female physicians, creating a micro-corporation can offer greater control over financial outcomes, positioning them to bypass institutional barriers and potentially equalize earnings with their male counterparts.

5. Regional Pay Differences Are Stark

Physician compensation varies greatly depending on location. Physicians in the Midwest report the highest average earnings at $343,000, while those in the Northeast have the lowest at $300,000. This variance highlights the importance of considering geography in your career strategy, especially if you’re planning to open your own practice.

Takeaway: If you're flexible about where you live and practice, considering regions with higher pay and lower cost of living could significantly boost your financial security and allow your micro-business to thrive.

6. Fair Compensation Remains a Point of Contention

Nearly half of physicians—49%—reported that they felt they were compensated fairly, while the other 51% believed they were not. This dissatisfaction underscores the importance of having control over your professional trajectory, whether through negotiating better employment contracts or by entering the marketplace as an independent entity.

Takeaway: Physicians who create their own micro-corporations often experience a greater sense of control over their compensation and workload, as they’re able to set their own rates and manage patient flow without third-party interference.

7. Side Gigs Are Becoming Commonplace

About one-third of physicians under 40 reported that they work side gigs to supplement their income. These side hustles range from telehealth consults to medical-legal consulting. Many physicians are also exploring opportunities outside traditional medical practice, including investments, coaching, or digital health services.

Takeaway: Side gigs not only provide supplemental income but also allow young physicians to expand their skill sets and explore entrepreneurial ventures that could eventually lead to full-time micro-corporation opportunities.

8. Incentive Bonuses Add Up

For physicians who receive incentive bonuses, the average bonus amount reported in 2023 was $39,000. While these bonuses can be significant, they are often tied to meeting metrics and objectives that may not align with long-term career goals.

Takeaway: If your practice model is based on a cash-pay or telehealth system, you have the flexibility to set financial goals that align with your values, rather than corporate-driven metrics, and build a more sustainable, incentive-driven business model.

9. Student Debt Lingers for Many Physicians

The burden of student debt continues to weigh heavily on physicians, particularly those in family medicine, where 67% of respondents still carry student debt. Specialists are somewhat better off, with only 19% of ophthalmologists still facing debt.

Takeaway: Finding ways to manage debt, including leveraging business ownership tax deductions and maximizing income through multiple streams, is critical. A micro-corporation structure offers financial benefits such as deductions for business expenses and savings on taxes, helping physicians get out of debt faster.

10. Job Satisfaction Is Tied to Control

Although compensation and workload are important, the Medscape report consistently shows that physicians who have greater control over their work schedules, patient loads, and practice environments report higher levels of satisfaction. For young physicians, this makes a compelling case for pursuing independent practice models.

Takeaway: Building a micro-corporation allows you to take control of your career and design a work-life balance that suits your needs, whether that means flexible scheduling, reduced patient loads, or focusing on areas of care that you’re passionate about.

Take Control of Your Future: Create a Micro-Corporation Today

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Conclusion

The insights from Medscape’s latest report reveal the evolving landscape for physicians under 40. With compensation, work-life balance, and job satisfaction increasingly influenced by your ability to control your professional path, now is the time to consider taking charge of your career through self-employment. At SimpliMD, we offer the tools and expertise to help you succeed in the marketplace—on your terms.