Structured, salary-only compensation plan for physicians a possible model for pay equity

By | January 5, 2020

Gender pay equity in healthcare remains elusive. Gender-based pay differences have been shown to persist, even when controlling for experience, clinical productivity, academic rank and other factors. These inequities result in significantly lower lifetime earnings, job burnout and negative attitudes toward work — all adverse effects on the profession.

One model for eliminating pay disparities among physicians is a structured, salary-only plan that incorporates national benchmarks, and standardized pay steps and increments such as the plan used at the Mayo Clinic.

A new Mayo Clinic study set out to assess how well the institution adheres to its own compensation model and achieves pay equity. The study reviewed data for all permanent staff physicians employed at the Mayo Clinic in Arizona, Florida and Minnesota who were in clinical roles as of January 2017. Each physician’s pay, demographics, specialty, full-time equivalent status, benchmark pay, leadership roles and other factors were collected and analyzed.


Among 2,845 physicians, pay equity was affirmed in 96% of cases, according to the analysis. All physicians whose salaries were not in the predicted range were evaluated further and found to have the appropriate compensation, most often due to unique or blended departmental appointments.

Of the 80 physicians — 2.8% of the total — with higher compensation than predicted by the model, there was no correlation with gender, race or ethnicity. The same was true of the 35 physicians — 1.2% — who had lower-than-predicted compensation.

A structured compensation program has been used for physician salaries at Mayo Clinic for more than 40 years to remove financial incentives to do more than is necessary, or less than desired, for the patient. The step-based model is designed to ensure that salaries are market-competitive; advance efforts to recruit and retain staff; and support the mission, vision and values of the organization. There are no incentives or bonus pay, and non-salary compensation and benefits are consistent across Mayo Clinic locations and specialties.

Of the 2,845 physicians whose compensation was analyzed, 861 were women and 722 were nonwhite. More men than women held one of the compensated leadership positions or had past leadership roles — 31.4% of men were in that category, compared with 15.9% of women — and more men than women were in the highest compensated specialties.

The study calls for healthcare organizations to systematically define the drivers and incentives of physician compensation, and assess whether these organizations unfairly exclude or disadvantage certain groups — whether women, racial or ethnic minorities, or medical specialties — and then develop processes that can achieve equity and values alignment.


Around the country, women physician researchers make 7 to 8% less per year than men, and those numbers can add up to a significant chunk of change over time, according to January 2019 research from the Johns Hopkins University School of Medicine.

Efforts to eliminate such a gender disparity cut the difference in salaries from 2.6% in 2005 to a statistically insignificant 1.9% in 2016. But even with that improvement and seemingly small pay gap, women faculty are likely to accumulate much less wealth over their lifetimes. The researchers used new models of wealth accumulation — taking into consideration how much faculty make, time between promotions, and the effects of salary on retirement and other savings — to calculate the numbers.

A separate 2019 study examining emergency physicians specifically found that, in emergency medicine, men still make 18% more than women, and a $ 12,000 gender salary gap remains essentially unchanged.

The authors said the reasons for salary disparities by gender are unclear, but may include the presence of conscious and unconscious biases or initial recruitment negotiation skills despite the medical specialization.

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