Guest Post: Are Physicians' Salaries Overvalued, Undervalued, or Just Right?
By Graham Walker, MD, Co-Founder of Offcall
For this week’s edition of The Surgeon’s Record, I’m honored and excited to welcome Graham Walker, MD as guest poster. Graham is an emergency medicine physician, founder, and prolific health tech enthusiast. He’s my go-to source for all things AI in health care and has become one of the most measured and thoughtful clinician voices on social media.
Currently serving as Co-Director of Advanced Development for The Permanente Group in Northern California, Graham is on the forefront of AI implementation and strategy. He’s the beloved creator/founder of MDCalc, a repository of “evidence-based clinical decision tools and content used by more the 80% of healthcare professionals in the US and millions more worldwide.” Not satisfied with this achievement, Graham recently co-founded Offcall, a company whose mission is to level the playing field when it comes to salary negotiations and determining physician worth.
Along those lines, Graham’s post deftly handles a controversial topic — physician compensation.
Are Physicians' Salaries Overvalued, Undervalued, or Just Right?
When discussions about U.S. health care costs resurface, physician salaries often take the spotlight. Articles calling out U.S. doctors as the highest paid in the world can feel like an unfair critique. But is this high pay overcompensation — or does it reflect the unique demands of practicing medicine in the United States?
Physician pay can feel like a black box — opaque and misunderstood. Let’s shed some light on the topic.
Why Do American Physicians Earn More?
I’m not disputing the fact. Yes, physicians in the United States do earn higher salaries compared to their counterparts in most other countries. But comparing raw salary figures without understanding the context is totally misleading.
The Cost of Entry
Becoming a doctor in the U.S. requires significant financial and personal sacrifices. With medical education costs reaching $200,000–$300,000 or more, physicians start their careers deep in debt. By contrast, many countries heavily subsidize or even fully cover medical education costs, allowing doctors to graduate without the burden of loans.
Administrative Burden
U.S. physicians spend roughly 15–25% of their time on paperwork, from dealing with insurance companies to documenting electronic health records. This is far more than their peers in other countries. We are certainly alone in the world in employing numerous billing staff per doctor to handle the growing red tape required just to practice medicine.
Litigation Risk and Defensive Medicine
American healthcare is highly litigious, forcing physicians to practice defensive medicine by ordering extra tests and procedures. They also pay higher malpractice premiums, with some specialties shouldering tens of thousands of dollars annually. Physicians in other countries face much lower legal risk, thanks to caps on damages, government-backed malpractice systems, or simply the fact that people who are harmed from medical errors will still have medical coverage for the rest of their lives to address complications that may arise.
Work Hours and Productivity
U.S. doctors often work longer hours, see more patients, and perform more procedures than their counterparts abroad. While these expectations drive higher compensation, they also take a toll on physician well-being. Because of the administrative burden, less hours are actually spent on practicing medical care, which most of us still enjoy doing.
Adjusting for Context: Are U.S. Doctors Actually Paid More?
When accounting for these unique burdens, the compensation picture becomes less straightforward. For example:
Effective hourly rate: Adjusting U.S. physicians’ salaries for the extra time spent on administrative work, defensive medicine, and paying down student loans shows that their effective hourly pay may align more closely with that of doctors in countries with simpler systems.
Opportunity costs: The years of intense training and delayed earnings mean U.S. physicians have fewer working years to build wealth compared to other professionals.
The Real Drivers of Healthcare Costs
It’s also worth noting that while physician salaries are a visible part of health care spending, they are far from the primary driver. In fact, administrative costs account for 15–25% of U.S. health care expenditures—an amount that dwarfs physician salaries. Simplifying billing systems and reducing inefficiencies would do far more to lower costs than cutting physician pay.
What the Media Gets Wrong
Articles like the one in Vox often miss key points when discussing physician compensation. Here’s what they typically overlook:
The hidden sacrifices: U.S. physicians routinely skip meals, bathroom breaks, and family time to care for patients. Few other professions demand this level of personal sacrifice.
Complexity and expectations: The U.S. system requires physicians to wear multiple hats — clinician, administrator, compliance officer, and risk manager. This added responsibility justifies higher compensation.
Societal value: Physicians aren’t just health care providers; they are lifelines in emergencies and trusted advisors in times of vulnerability. While salaries might seem high on paper, they reflect the immense responsibility of the role.
What I’m Doing About It
Clearly, “pay” doesn’t tell the whole story. It’s a necessary but not sufficient part of physician burnout and satisfaction. So last week, we launched Offcall — a free platform designed to give physicians clarity about their work and pay through job transparency and financial tools. After creating an account, physicians can privately share their data and compare their metrics with others in their specialty, fostering a better understanding of their value in a complex system.
The next time someone argues that physician salaries are driving up health care costs, ask: Are we paying doctors for their expertise and sacrifices — or penalizing them for navigating an inefficient system? Offcall helps physicians reclaim the narrative, providing the data and insights needed to advocate for fairness and real change in health care.
Debate over physician compensation was brought to the forefront again following Anthem’s policy change (and abrupt reversal) in how it reimburses anesthesia services. A scathing article published on Vox (linked in last week’s post) and subsequent social media discourse fanned the flames.
As Graham points out, physician salaries are not a significant driver of high health care costs, and there’s much the media gets wrong here. I’m not one to begrudge the compensation of anyone who works hard, makes personal sacrifices, and plays by the rules. I don’t think ethical physicians should be defensive about the money they make. If we really want to determine physician value, we should create more free markets in health care. But that’s a thought for a different post.
Small Incisions
Costly U.S. health care system could take lessons from Portugal (STAT)
This article is a compelling read with useful lessons, but the biggest takeaway for me was this: Comparing the U.S. health care system to other countries isn't especially helpful. Portugal’s Family Health Unit approach makes sense and has produced impressive results. The U.S. isn’t unfamiliar with similar models — programs like PACE and startups like Iora Health have embraced multi-disciplinary care, and CMS/CMMI pilots are moving in that direction. Health care is deeply intertwined with society and social norms. The U.S. is vast, diverse, and full of regional variation. It’s hard to design a single, one-size-fits-all solution that will work for everyone. Addressing health care reform in the U.S. also means addressing the social, economic, and environmental factors that shape health outcomes.
Mandatory Medicare Bundled Payment and the Future of Hospital Reimbursement (AJMC)
Ready or not, TEAM is coming. The mandatory CMS bundled payment program is causing angst amongst hospitals and health systems, many of whom are at risk of losing money. TEAM is not the first mandatory bundled payment program — it was preceded by the Comprehensive Care for Joint Replacement model. However, TEAM will affect twice as many hospitals and put four times as much Medicare revenue at risk. Hospitals that participated in CJR have seen a version of this playbook before. But have they already squeezed as much efficiency and cost savings out of the process as possible? Is there still room for improvement? Are we ready for TEAM? (This article in the New England Journal would suggest the answer is no.) TEAM target prices are based on regional averages, meaning high-cost hospitals are at particular risk. The analysis presented in this article suggests an average loss of $560 per episode. Are CMS and CMMI calling hospitals on their cost bluff? Buckle up.
Another insightful breakdown by Blake Madden. Walgreens, once seemingly a major player in the retail health care push, is now weighing a take private deal with PE firm Sycamore Partners. The VillageMD and CareCentrix investments fell flat, and the retail stores aren’t faring well either. Ultimately, Amazon may be hurting Walgreens (and other retail pharmacies) not with its health care moves but with its core business of convenience for everyday needs. I’m planning to post full 2025 predictions soon, but it’s probably not going out on a limb to say that next year will see a continuation of the major retrenchment in Big Retail health care efforts. CVS’s unsuccessful moves cost Karen Lynch her job. The future of Oak Street Health is still in question. Amazon is still standing with One Medical and its online efforts, but how long will the company tolerate losses associated with this business unit? A PE firm taking Walgreens private likely means slashing costs, shutting down stores, and restructuring the business to improve the P&L/balance sheet. Who knows what the company will look like on the other side? (A 2025 predictions preview: I’m bullish on care delivery — that is, traditional care delivery with a modern twist).
Ben Schwartz, MD, MBA
Editor-in-Chief, The Surgeon’s Record
Commons Clinic Senior Clinical Fellow
I would argue that most physicians aren't paid enough for all they have to take on. I am a big fan of using AI to get doctors to spend more time with patients, researching and less time on administrative tasks
On extra time spent on "administrative work, defensive medicine, and paying down student loans shows that their effective hourly pay may align more closely with that of doctors in countries with simpler systems,"--reference on how you derived the numbers?