In most professions you get paid the more senior you become. An attorney typically bills hourly and as he becomes more an expert in his field and within his firm, his hourly rate continues to increase. Similarly in business, as you climb the corporate ladder, your salary increases. Medical doctors have an unusual situation. Once you become a doctor, you get paid per office visit, per consultation, per procedure, or per surgery the same as whether you have been doing it for 30 years.

The main reason that physician pay does not increase according to seniority is because the payer is usually Medicare or an insurance company that pegs their reimbursement to Medicare rates. When your payer is the government, they don’t care whether you are the best in the field or you have been doing it for 20 years. They don’t care whether you take 1 hour or 10 hours to do the surgery or see the patient. The pay is still the same. Thus in many ways, medicine is sort of an “all you can eat” type of service. You only get paid once, but you must provide complete service.

While the pay increase from resident to attending physician is a typically a huge jump, doctors hit a ceiling early on after they become fully fledged physicians. One reason for this equality in pay among doctors of all levels is that when dealing with human life, it is expected that all doctors provide the best possible care. Differentiating one physician from another or one surgeon from another is very difficult. Additionally, seniority does not necessarily mean that the product or service is better.

Although the pay per service does not increase the more senior you become, in reality the more senior you become the faster you typically perform a service. Thus in some sense pay does increase but this is due to the physician working faster and more efficiently. In practice this is not necessarily always a good thing because some physicians tend to rush or hurry through their patients or procedures. Sometimes this results in poor care or mistakes.

For the physicians who operate non-PAR or take cash payments such as plastic surgeons or dermatologists, they may be able to charge more given their experience or reputation. However, the competitive landscape in any city usually caps levels to cater to what is reasonable for individuals.

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3. Health Insurance Companies Take Advantage of Doctors, Part IV
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5. Health Insurance Companies Take Advantage of Doctors, Part II