Medical Practice

It is thought by many that the recession of the 1980s contributed significantly to the substantial increase in the medical school applicant pool during the following decade. This is due to the perception that a career as a physician can ensure economic security.

The prospective physician needs to recognize that, while the income of physicians-in-training during post-graduate years has gone up over the past decade, in reality, other considerations come into play. New physicians starting their own practice need to be concerned with the unknown impact that the approaching changes in the health care system will have. They also need to take into consideration major overhead costs, such as those associated with purchasing medical equipment, malpractice insurance, office rental, employee salaries, etc. It is therefore more meaningful to deal with median net income, as shown in the accompanying graph. It demonstrates, over the past 25 years, a similar income pattern for each of the five-year periods, except at a higher overall level. We therefore find that there is a steep rise in income for the first dozen years. It rises less sharply over the next five years and peaks between 20 and 25 years, when the physician is about 50 years old. After a quarter of a century of practice, income gradually declines.

Remuneration in the Future

During the next century, it is quite questionable whether the pattern of the last 25 years as outlined above will be maintained. Indicators suggest that a leveling off or even possible decrease may be taking place from a peak median net annual income of nearly $175,000. This is particularly true for salaried physicians employed in group practices, hospitals, and health maintenance organizations. This potential trend reversal in the remuneration pattern will result from the steadily increasing power of managed care providers that are gaining dominance in a market containing an abundance of physicians who are seeking to tap into the patient pool.

Among physician employers, HMOs pay less since they feel they provide regular working hours and assume the expenses for office and malpractice insurance. Within this market, indications are that primary care physicians (family physicians, internists, and pediatricians) may be in a more favorable position in terms of remuneration. Their salaries may actually increase as a result of the fact that they are assuming the vital role of “gatekeeper” to the medical care establishment.