Why are some doctors paid more than others?

8 min | Medical Careers

From a mile away all doctors look much the same, but get up close and it turns out that they come in many shapes, sizes and disciplines. The differences are never more starkly revealed than by a quick glance at their tax returns at the end of the year.

Then you will find considerable variation based, not on how smart, hard-working or dedicated they are but on where they are located in the world and which particular medical career path they happened to have stumbled down.

A recent article in the Sydney Morning Herald highlighted a couple of things.  Firstly, compared to the typical Australian wage earner (with an average taxable income of $51,342) doctors are paid pretty well - at least three times as well to be precise.

But within the Australian medical profession itself it turns out that surgeons earn an average of $350,000 compared to the average medical practitioner at $155,000 per annum - between 2-3 times higher.

Have a look overseas and much the same pattern exist within most developed countries. The United States for example where radiologists and orthopaedic sugeons earn, on average, at least twice the income made by paediatricians. Even in the United Kingdom, where socialised medicine would be expected to even things out there is a considerable difference in the value that employers put on different specialties.

There is little online to explain why these differences exist beyond the argument that some specialties require more training than others. This alone however does not explain such a wide gap opening up once graduates leave medical school.

The magic ingredient seems to be private medicine. Even the smallest capacity to earn outside of the public health system, within any given country, upsets the applecart by offering doctors a competitive alternative to staying 100% on the public payroll. Other market forces come into play that set relative incomes based on harsh economic reality rather than deserved reward. Here are a few that I observe :

  1. Specialist pays better than generalist: A good GP knows something about everything whereas a knee surgeon knows everything there is to know about a very small number of things. Specialization attracts better rates of pay in all professions and medicine is no different.

  2. Intervention pays better than intellect: Every radiologist and cardiologist knows that they can add a hefty percentage to their salary if they add the word 'interventional' in front of their title. Which leads to my next point...

  3. Procedural pays better than hourly rates: Any management consultant will tell you that, if you want to make money you must charge per service and not on an hourly rate. In medicine this plays out in the difference between what a gastroenterologist can charge a patient for a half-hour procedure versus a one hour consult (the former being generally much more than the latter).

  4. Rich patients pay better than poor: Sadly, much of medical science, pharmaceutical research and clinical practice is focussed on conditions suffered by patients that can pay - hence erectile dysfunction research is better funded than malaria research. Similarly, cardiac surgery pays better than paediatric surgery, given the demographic of the patients.

  5. Diagnostics pays better than treatment: Borrowing from point three, diagnostic specialties can execute a lot of transactions, charging per item rather than on time, and so can generate income faster than more involved therapeutic specialties. Also less face time with patients frees up time for billable activities.

  6. Acute pays better than chronic: An acute event like a broken bone or a myocardial infarct will tend to cost more to treat than a chronic condition. Patients with a chronic or degenerative disease are often financially vulnerable and have limited capacity to pay for private health.

  7. Elective pays better than emergency: Any specialty where patients can be predictably lined up in advance for sequential treatment, such as with a colonoscopy list, can afford to pay it’s practitioners more thanks to inherent efficiency, plus a little bit of point three again. Compare that to emergency medicine which, by its very nature is unpredictable and also cannot take advantage of the natural filtering afforded by point four.

  8. Talent restricted pays better than talent oversupplied: Touching on point one, specialty training numbers are generally controlled by a regulating body (college or board) that are often keen to make sure that there is not an oversupply of doctors in that specialty in the marketplace. Anything that artificially limits supply puts upward pressure on price, and so it is for specialist medical skills.

Many will find the above to be unfair - I have spoken to many an aggrieved emergency medicine specialist or paediatrician over the years about the 'outrageous inequity' in pay they experience compared to their surgeon and anaesthetist colleagues.

But then there were likely many non-financial reasons why they chose that specialty in the first place. It is no secret at medical school that you will make more money reading MRI scans all day compared to caring for GP patients in the community.

So pay in medicine seems to be inherently unequal, at least in any country where there is at least some component of private medicine to invoke the power of the market.

I have not touched on the geographical aspects of pay differential  in this blog, but if it makes you feel better about pay inequity spare a thought for Cuban doctors who, by all accounts, are amongst the best trained in the world, and most equitably paid within their own country - cardiologists and pediatricians do get paid much the same. They all earn about $600 (yes - six hundred US dollars!) per annum.

Food for thought.

Written by Dr John Bethell, Director of Wavelength International

Subscribe for more content

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Please wait...