As an emergency physician, I often encounter one of the biggest misconceptions people have about doctors: that we are uniformly wealthy and have nothing to worry about as it relates to money.

While it's true that physicians tend to earn a higher salary compared to many other professions, it’s not straightforward and certainly not universal. In fact, many physicians face significant financial hurdles that are rarely discussed openly.

The stark reality is that one of the leading factors contributing to physician burnout and job dissatisfaction is pay. As family physician and wellbeing advocate Dr. Pamela Wible notes, physicians sacrifice their 20s and 30s to training, accumulate debt, and then work in a system where they’re overworked and undervalued. Is it any surprise that many of us are questioning our career choice?

This is one of the reasons I co-founded Offcall: to start bringing attention to the systemic issues at play that are hurting physicians’ financial wellbeing. With that in mind, here are four reasons that few people understand about why so many physicians are hurting financially, along with some tactics we can use to fight back and reshape the business of medicine for the better.

1. We are Heavily Burned with Medical School Debt

Today, the average medical student graduates with around $234,000 in student loan debt. For many, this figure can be even higher, especially when attending private institutions or factoring in undergraduate loans or credit card debt.

The laws of compounding interest are against us. Unlike other professions, where one can start earning a substantial income shortly after college, aspiring doctors endure an additional four years of medical school, followed by 3-8 years of residency training, plus a fellowship depending on the specialty. So a large portion of our salaries tends to go toward paying off student debt, and while other professions can spend these years accumulating wealth and saving, it can take physicians years, if not decades, to just pay off this debt, let alone have money left to put into a savings account.

Additional resources on Offcall: Should Physicians Pay Off Debt or Start Investing Early?

2. We Spend Our First Working Years Severely Underpaid

During residency, many residents are working 80-hour weeks, while earning a modest salary that averages between $60,000-$80,000 per year. That's roughly $15-25 per hour. These are the years when our peers in other professions are advancing in their careers, buying homes, and starting families, while many residents struggle to make ends meet — working hard, making little, and often already starting to repay their loans.

Additional resources on Offcall: How to Build a Budget as a Resident

3. We Are Facing a Stark Decline in Reimbursement Rates

Physicians face additional financial challenges due to declining reimbursement rates from insurance companies and government programs like Medicare and Medicaid. Over the past two decades, Medicare reimbursement rates have not kept pace with inflation. Adjusted for inflation, Medicare physician payment rates have declined by 22% from 2001 to 2021. And we will see another 2.8% cut in 2025. This decline directly affects physicians’ incomes, even if they see few Medicare patients, as many private payers set their rates as a percentage of Medicare.

What few people realize is that the doctor performing a procedure tends to make far less than the facility does. For example, looking at colonoscopies, Dr. Dipen Patel recently published an article analyzing reimbursement rates for GI procedures. He found that from 2018-2023, after factoring in inflation, reimbursement rates actually dramatically declined for physicians performing GI procedures, while rates increased for ambulatory surgical centers.

4. We Lack Knowledge and Tools to Understand and Negotiate Our Pay

Unlike many other professions that have standardized salaries and compensation structures, there is next to no transparency about physician compensation. Employers often fail to clearly outline how much a physician is making, and physician pay is often made obscure through complex contracts and elusive productivity metrics like Relative Value Units (RVUs) that are difficult to decipher and dependent on ancillary support services as well.

Furthermore, there are numerous intangible factors that can lead to significant disparities in pay among physicians in the same specialty and geographic area, such as: the number of hours worked, patients seen per day, supervision responsibilities for non-physician practitioners (NPPs), EHR usage, and the relationship with administration.

Additional resources on Offcall: Check out our interview with Dr. Eric Bricker, where he breaks down how physicians can increase their negotiating power.

A Troubling Trend: Physicians are Opting Out of Medicare and Private Insurance

In light of these challenges, a growing number of physicians are choosing to opt out of Medicare and private insurance altogether. By transitioning to direct primary care (DPC) models or concierge practices, physicians are attempting to regain control over their compensation and practice style.

While this model isn't feasible for every specialty or community, it reflects a desire among physicians to break free from the constraints of traditional reimbursement models that undervalue their services. It also highlights the lengths to which physicians are willing to go to achieve fair compensation and professional satisfaction.

The Path Forward for Physicians

Medicine is hard work — and most of us didn’t go into the profession to “get rich quick.” However, we must make systemic changes to meaningfully improve physicians’ financial reality if we’re going to truly address the root cause of burnout. After all, physicians are the backbone of America’s healthcare system, and it’s important to note that when we are fairly compensated and satisfied at work, we’re able to provide the high-quality care that patients deserve.

So what can we do to address these issues?

• Expand Loan Forgiveness Programs: While we've seen some improvements and expansion of Public Service Loan Forgiveness (PSLF) recently, we could expand and promote loan forgiveness programs for physicians who serve in underserved areas. This would help mitigate the issue of physicians being unable to accumulate wealth and save in the early years of our career compared to other professions.
• Advocate for Fair Reimbursement: Physician organizations must continue to advocate for fair reimbursement rates that reflect the value that physicians provide and help us negotiate collectively with the Centers for Medicare & Medicaid Services (CMS). This is critical if we hope to keep physicians motivated to see Medicare patients, in particular.
• Build Transparent Compensation Models: Establishing clear and transparent compensation structures, and communicating these structures transparently to the workforce, is of the utmost importance.

This is our focus at Offcall – we built a platform to help you understand compensation models, share your own, and compare with your colleagues confidentially and anonymously. By joining Offcall, you're finding solutions not only for yourself — you're also helping fellow physicians make more informed career decisions and forcing employers to compete on a level playing field for physicians. Together, we can reshape the future of medicine and work towards solutions that ensure physicians are fairly compensated for our invaluable contributions to society. Join us!