According to Medscape’s 2017 Physician Compensation survey, the average doctor salary for 2017 is $294,000, a $15,000 increase compared to 2016. This amount, drawn from the responses of 19,270 currently practicing physicians, includes cash compensation and retirement plan benefits, excluding fringe benefits. Medscape’s annual survey looks at the average salaries of doctors with a broad range of specialties from around the country. This year’s findings found that pediatricians average $202,000 a year while orthopedic surgeons average around $489,000. It also found that compensation for doctors in Virginia, Maryland, and DC ranked among the ten lowest states in the US.
Although fringe benefits were not included in the survey’s average compensation amounts, they are still very important to consider. This year’s results show that about 75% of respondents receive paid or subsidized health insurance, in addition to malpractice insurance. This means about 25% of physicians obtain these benefits on their own or pay for them through their employers.
If not structured properly, physicians needing to pay out-of-pocket for their health insurance may end up not receiving a tax deduction. If health insurance is taken as an itemized deduction, that expense along with all other medical expenses are phased out by 10% of adjusted gross income. Malpractice insurance is considered a business expense; it is phased out by 2% of adjusted gross income and disallowed completely when computing the alternative minimum tax. The end result could be small if any of these expenses are taken as itemized deductions and generate any tax savings.
As discussed in my blog, “Boost Your Medical Practice Profitability – The Benefits of Direct Care,” many doctors are feeling the squeeze from shrinking insurance reimbursements. As a result, the medical industry is seeing the emergence of alternative practices. This year’s survey results revealed that 3% of respondents are doctors for concierge practices, while 6% work at cash-only practices. The average concierge practice doctor makes around $300,000 and average cash-only practice doctor makes $310,000. While both numbers are more than the average doctor salary of $294,000, these high salary ranges are not surprising. Concierge and cash-only practices typically have lower administrative costs, which will allow the physician to earn more per patient and reduce their patient load.
To gain additional insight on how you compare to your peers, please read the complete survey.
How do you compare? What are your challenges? What changes would you like to see in your practice? Please contact Aronson’s Professional Services Industry Group to discuss your particular situation. Partner Larry Rubin, who focuses on medical professionals, can be reached at email@example.com or 301.222.8212.