Michigan physician compensation rose in 2023, still below Midwest average

Michigan physicians got a modest pay bump in 2023, according to new data from medical news site Medscape, but well below the national average.

Last year, the average total compensation for all Michigan physicians was $360,000, up 1.1% from $356,000 in 2022. Nationally, wages and salaries for all professions increased on average 4.7% in 2023, according to the U.S. Bureau of Labor Statistics. The big increases, however, came among lower wage positions that had seen smaller bumps prior the pandemic.

Total compensation includes base salary, performance bonuses and other sources of job-related income.

Michigan doctors, though, continue to earn less than their peers. Across the Midwest, the average physician compensation was $404,000, according to the Medscape data.

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A reason for the lower compensation could be Michigan’s hyper-competitive health care market. For instance, Michigan has more than 65 community health and hospital systems, compared to just 60 in Illinois, despite having more than 3 million more residents.

This leads to Michigan being one of the most affordable states for health care.

Michigan ranks as the eighth most affordable state for medical costs, according to a study released last year by prescription service provider Universal Drugstore. Patients in Michigan pay on average $1,273 per emergency room visit and $12,065 for the average hospital stay.

Texas is the highest cost state, averaging $2,318 per ER visit and $13,154 per hospital stay, according to the study.

Michigan also ranks as the most affordable state for health insurance premiums, with an annual premium through an employer-sponsored plan at $4,703 per year and has the fifth lowest average family health coverage deductible at $3,350.33, according to polling by the Kaiser Family Foundation.

The increase in overall compensation for doctors in the state was completely driven by gains primary care physicians, which saw compensation rise last year by more than 8.8%.

While specialty physicians out-earn primary care doctors on the whole, medical specialists in the state saw a nearly 2% decline in compensation in 2023 compared to 2022.

It’s unclear from the report why wages declined, but the rise in compensation for primary care physicians was likely driven by a shortage in family physicians in the state due to fewer medical students opting to study primary care.

This year, only 37% of graduates from the Michigan State University College of Human Medicine chose a residency in primary care, down from 48% the year prior.

The reason is pretty clear: medical specialists earned an average of $392,000 in 2023, compared to $284,000 for primary care doctors, according to the Medscape study.

Nationally, the incentives to focus on specialty is financial. Orthopedics doctors earn, on average nationally, $558,000. Plastic surgeons earn $536,000 and cardiologists earn $525,000 on average.

And the pay disparities don’t stop at specialization. According to the Medscape report, woman and minorities are paid far less than their white male peers, nationally.

Male physicians on average earned 29% more than their female peers. And while Black physicians saw their compensation grow roughly 7% last year, they still earn $37,000 less annually than white physicians.

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