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Physicians switching to salary pay

By Katie Ni
AMSA Health Policy Education and Outreach Coordinator

The current trend for both primary care and specialists has shifted from private practice model and embrace salaried jobs with hospitals. The American Medical Association says that 60% of family doctors and pediatricians, 50% of surgeons, and 25% of surgical subspecialty physicians are employees rather than independent (See graph).


Hospitals have been offering physicians much more attractive deals than what is traditionally experienced in private practice. Private practice makes less revenue and includes higher risk. It is not surprising to see many physicians making the switch.

On the surface, the increase in salaried doctors seems like good news for controlling health costs. In reality, physicians in hospitals are rewarded for doing more procedures and prescribing more medicines. This may particularly be the case for doctors who were drawn into hospitals by the competitive pay in the first place.

It is truly unacceptable for physicians to allow their own financial gain to effect making the best decision for their patients. Some may say that it is human nature, others consider this to be a reflection on character. However, there are two main ways the medical community can improve the situation. The first is to adopt a reward system based on quality of care, rather than quantity of care. Secondly, we must improve the financial burden to medical students. The motivation for financial gain may be related to simply the high cost of becoming a physician. Through recent studies have found that most doctors do not choose specialty based on pay, it remains that many bear large student loans. For some physicians, the love of the job may be enough of a payoff but others may want to see their work pay off financially as well. Addressing problematic healthcare practices is best done by changing the systems and infrastructure under which the incentive problem exists.

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