Charlotte’s physicians make an average of about $473,000 annually, more than peers in any U.S. market, according to a December report.
St. Louis ranked second at about $452,000, while Buffalo was third at about $426,500, according to the study by San Francisco-based Doximity. When adjusted for cost of living, Charlotte also ranked first. Compensation in the Queen City area gained 12.9% over the last year, the highest increase nationally.
The report follows various studies showing that Charlotte has among the highest medical costs in the U.S. The average compensation for physicians in Raleigh in 2021 was $406,365, which was 1.6% higher than in 2020.
Average pay is misleading because specialists have much higher compensation than general practice physicians who tend to have the most contact with the public. Family practice doctors average around $274,000 annually, according to the report.
Dr. Dale Owen, the CEO of Tryon Medical Partners, thinks the Doximity findings are accurate. The higher-compensated physicians in Charlotte get paid for doing surgeries and other procedures at the area’s two major health care systems, which face less competition than peers in many other big cities, he says. Most work for the hospitals or at practices that have exclusive contracts with Atrium Health or Novant Health.
“Value-based medicine has not taken hold here like it should,” he says, referring to payment systems in which hospitals, physicians and insurers share financial risk. “When it does, costs will come down and I think salaries, which are primarily being driven in the hospitals, will also be driven down.”
Sandra Greene chairs the N.C. State Health Coordinating Council, a state government unit that oversees health planning. The group focuses on medical building expansions and doesn’t have input on compensation, but she says she wasn’t surprised by Charlotte’s top ranking.
“We are a state that has not, in principle, embraced managed care on a widespread basis,” says Greene, who is a UNC Chapel Hill biostatistician.
Blue Cross Blue Shield North Carolina, the dominant N.C. health insurer, in the early 1990s promoted plans that put caps on medical spending per employee, says Greene, a former Blue Cross executive. That program may have limited health care costs, including physician pay, but opposition from both employers and employees largely scuttled the effort, she says.
Blue Cross declined to comment on the Doximity report. But the insurer is promoting its Blue Premier “value-based care” program in which hospitals, physicians and Blue Cross share financial risk, a spokesperson notes.
Metro areas with large research hospitals tend to have lower physician compensation because academic researchers often are paid less than private-practice doctors, says Christopher Whaley, a policy researcher at the Rand Corp. who was one of the study’s authors. Charlotte has been the largest U.S. city with a medical school campus, though Atrium and Wake Forest planning to add one over the next few years.
Purchasers of health care “are becoming much more aware of the costs and we’re in a time when many are acting,” Whaley says. “That is one source of optimism.”
The Mecklenburg Medical Society, which has more than 1,300 physician members in the Charlotte area, didn’t respond to requests for comment on the study.