The financial and work picture for employed physicians
About a third (32%) of employed physician respondents work in hospitals; 28% work in private practices.
Employed physicians were most likely to report a salary increase from 2018 to 2019: 74%, compared with 45% of self-employed and 52% of independent contractors.
As for declines in income, self-employed physicians and independent contractors suffered a comparable loss, with 13% and 12% of them, respectively, reporting salary cuts greater than 10%. Decreases of up to 10% were felt mostly by the self-employed, with 17% experiencing such cuts, compared with 7% of employees and 10% of independent contractors.
In contrast, employees were the least likely of the three categories to have incurred large financial losses over the past year: 77% of employed respondents indicated that they had not experienced any significant financial losses in the past year, compared with 63% of self-employed physicians and 63% of independent contractors. They were also least likely to have made any investments at all over the past year – 21% of employees reported having made none at all in 2019, compared to 11% of self-employed physicians and 16% of independent contractors.
The financial and work picture for independent contractors
Just over half (52%) of all independent contractors who responded to our questionnaire work in hospitals, 15% work in group practices, 9% work in outpatient clinics, and just 2% work in solo practices.
Independent contractors were less likely than their peers to have received employment benefits such as health insurance, malpractice coverage, and paid time off. They were also less likely to be saving for retirement. Almost half (45%) of independent contractors said they received no employment benefits at all, compared to 20% of self-employed physicians and just 8% of employees.
What’s more, 27% of independent contractors do not currently put money into a 401(k) retirement account or tax-deferred college savings account on a regular basis, compared with 16% of self-employed physicians and 8% of employees. Similarly, they were less likely to put money into a taxable savings account (39% responded that they do not, compared with 32% of self-employed physicians and 27% of employees).
“Net worth and retirement funding findings do line up with what I’ve observed,” said Mr. Scroggins. “Those who have independent practices as opposed to working for a hospital do tend to more heavily fund retirement plan accounts, which is typically the biggest driver of building net worth.”
Despite the lack of retirement planning, independent contractors were more likely than their peers to derive satisfaction from making money at a job they like (18%, compared with 12% of employees and 11% of self-employed physicians). They’re also far more likely to be in emergency medicine (22% of independent contractors, compared with 3% of self-employed and 5% of employees) or psychiatry (11% of independent contractors, compared with 5% of self-employed and 6% of employees).
Among the three categories of physicians, independent contractors were least likely to say that they would choose the same practice setting again. Across all three categories, fewer than 50% of respondents would do so: 34% of self-employed physicians, compared with 29% of employees and 28% of independent contractors.
Physicians who are considering leaving their own practice for a hospital setting should do so with caution and fully understand what they are getting into, said Mr. Scroggins. “If they’re just looking at compensation, they also should be looking very carefully at retirement plan benefits. If that’s their main method of saving and building net worth, then that’s a dramatic difference.”
And of course, there’s always the intangible value of feeling connected to a practice and its patients: “Physicians got into this line of work to treat patients and help people become healthier, and in hospitals they end up being more disconnected from their patients,” Mr. Scroggins said. “That’s a big factor as well.”
Editor’s note: Only differences that are statistically significant at a 95% confidence level between categories of employment have been included. Of the 13,893 responses included in this analysis, 3,860 physicians identified as self-employed, 9,262 as employees, and 772 as independent contractors.
A version of this article originally appeared on Medscape.com.