It’s no secret that physicians in private practice often times make more money than their colleagues in academic medicine. For hospitalist, the difference in pay can be greater than $100,000 a year! However, taking a job in academia is not all about income. There are many benefits that academic medicine gives to doctors that private practice jobs can fall short on. Each person will have to define what is important to him or herself. Since being financially independent and paying down debt are a priority to me, let’s take a look at what the pay difference adds up to.
The Giant Pay Difference In Private Practice
The average salary according to the Medical Group Management Association for primary care academic medicine vs private practice varies by as much as $65,000 per year. For sub-specialty doctors, the differences can be much higher.
When I was applying to jobs I noticed similar differences in pay between academic medicine and private practice.
In my geographic area, academic job offers were around $200k per year while private practice jobs can exceed $300k per year. Location was a big factor in pay since many of the higher paying jobs were in less desirable places to live.
However, not all jobs pay more in private practice. There are some areas of practice where the pay gap between private practice and academic medicine is minimal. There are jobs where it’s almost impossible to find a position outside of academia. For example, specializing in genetics and genetic disorders may be very hard to do without being affiliated with an academic center.
Despite the exceptions, most jobs for doctors are likely to pay more per year in private practice.
The Pay Difference Can Add Up To Millions Of Dollars
Let’s take a look at one example of varying pay for my specialty. As described above, it’s not difficult to obtain a job with a difference of $100,000 a year between private practice and academia. This can seriously add up over the course of a career. I’ve picked this number because I encountered similar pay disparities with job offers upon graduating from training.
We will take two assumptions. First, the academic and private practice physicians continue with their respected jobs throughout their careers. I’ll admit this assumption is a bit of a stretch, especially since doctors switch jobs shockingly often.
The second assumption is that the difference between the pay is $100,000 per year (real pay difference between several of the jobs I received upon graduation at academic centers vs private groups).
Green- 4% rate of return; Red – 6% rate of return; Blue- 8% rate of return
Over the course of a 20 year career assuming a 6% rate of return, the difference in wealth generated by the physician in private practice is $3,899,272.67 more than the academic physician doctor.
That’s enough money to seriously affect your retirement goals and lifestyle.
The Benefits Of Academic Medicine
I’m by no means trying to bash on academic medicine. Teaching is one of the best parts of becoming a doctor. After all, we are all taught to “See one, do one, teach one.” In fact, I thought it was the most rewarding part of being in academic medicine.
Most doctors do not have a primary goal to get rich. Academic centers often are supported by tax dollars and treat a disproportionate percent of the underprivileged and uninsured. Medicine for many is a calling, not a means to get rich. For physicians who dedicate their lives to academic medicine or research, the pay difference is unfortunate. That will be a post for a different day though!
The main reasons many doctors love academic medicine:
- Enjoyment from teaching the next generation of physicians
- Being apart of an enterprise that is making advances in medicine
- Income and job stability
- Constantly learning attending lectures and being around doctors who are experts in their field
- Having overhead paid for. EMR, nursing staff, malpractice, retirement, disability, daily expenditures for clinics all are things provided for by the institution
- Usually located in a large desirable city with a lot of culture and things to do on days off
- Sharing call with residents/fellows and having them take first page overnight. I love my sleep!
- Having minor issues be dealt with my house staff.
- Hours are can be very predictable compared to private practice
- The ability to have coverage while being off work
Follow Your Passion, Not The Money
Have you ever worked at a job you absolutely hated? I sure have, and it made me realize very quickly that there is no amount of money that would make a job worth it. If you join a job only for the money, I guarantee you that you will really earn every penny that is made.
I miss academic medicine, but joining a private group has it’s perks. At my current job, I signed up to be a doctor who can have residents or nurse practitioners round with me for credit with their program. I feel like I’m currently getting the best of both worlds since I love to teach. I get to teach some people still in training while benefiting from the higher pay in my field in a non-academic setting.
Who knows what the future will hold. All I know is that I’ve been happy with my job and got to a positive net worth even quicker than I ever dreamed.
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