If you’re looking for ways to reach the top 1 percent of U.S. incomes, one route is to become a doctor at an Indianapolis-area hospital system.
It took $394,000 to rank in the top 1 percent of U.S. earners, according to this 2013 study. And more than 100 of the Indiana contingent in that exclusive club were physicians employed by one of the four major hospital systems that operate in the Indianapolis area.
That’s according to the Form 990 tax statements the hospital systems—and their myriad subsidiaries—file with the Internal Revenue Service. The 2013 forms are the most recent available.
I list all the physicians I could find receiving more than $250,000 a year in compensation at the bottom of this post. There were 153 doctors employed around the state by the big four Indianapolis hospitals that I could determine had 2013 compensation at least that high.
The reports also list the number of hours physicians work—and it’s a lot: more than 48 hours per week.
I suspect the figures for hours worked are low. The majority of physicians are listed as working 50 or 55 hours per week.
On the other hand, many docs’ incomes are far greater than their paychecks because they also receive profits from their ownership stakes in surgery centers or imaging centers. Those sums aren’t reflected in the Form 990s.
Compensation for surgeons and specialists spiked around Indianapolis starting in 2008 as hospital systems scrambled to employ them (instead of seeing them poached by a competing system). The ensuing bidding war for physicians has helped push at least 15 physicians over the $1 million mark in annual compensation.
The number of physicians at this level of pay is certainly a minority of all the physicians the hospital systems employ. IU Health employs about 1,500 physicians. St. Vincent employs nearly 900; Community about 600 and Franciscan about 300.
But high pay has been one factor that has forced the hospital systems to record large losses for their physician practices. For example, Indiana University Health’s tax statements show total losses of nearly $140 million in 2013. And Community Health Network posted more than $130 million in losses from its Community Physician Network. Neither St. Vincent Health nor Franciscan Alliance reported separate financial statements for their physician practices.
The losses incurred in physician practices dampen, but by no means erase, the healthy profits Indianapolis-area hospitals have been earning in recent years. After all, those hospital profits are, quite directly, produced by the same well-paid physicians.
It’s also worth noting that it’s hardly easy to become a physician. Roughly 84 percent of all medical school students graduate with debt. And the average amount of that debt is $180,000.
Med school graduates then take several years working for modest pay as residents.
And then, even after that, only the most productive surgeons and specialists, or physicians who take on significant administrative responsibilities, reach the heights in this list.
So, clearly, it takes a lot of sacrifice to become a physician. But as the list below shows, it can also be exceedingly lucrative.