A Structured Compensation Plan Results in Equitable Physician Compensation: A Single-Center Analysis

Abstract

Objective: To assess adherence to and individual or systematic deviations from predicted physician compensation by gender or race/ethnicity at a large academic medical center that uses a salary-only structured compensation model incorporating national benchmarks and clear standardized pay steps and increments.

Participants and methods: All permanent staff physicians employed at Mayo Clinic medical practices in Minnesota, Arizona, and Florida who served in clinical roles as of January 2017. Each physician's pay, demographics, specialty, full-time equivalent status, benchmark pay for the specialty, leadership role(s), and other factors that may influence compensation within the plan were collected and analyzed. For each individual, the natural log of pay was used to determine predicted pay and 95% CI based on the structured compensation plan, compared with their actual salary.

Results: Among 2845 physicians (861 women, 722 nonwhites), pay equity was affirmed in 96% (n=2730). Of the 80 physicians (2.8%) with higher and 35 (1.2%) with lower than predicted pay, there was no interaction with gender or race/ethnicity. More men (31.4%; 623 of 1984) than women (15.9%; 137 of 861) held or had held a compensable leadership position. More men (34.7%; 688 of 1984) than women (20.5%; 177 of 861) were represented in the most highly compensated specialties.

Conclusion: A structured compensation model was successfully applied to all physicians at a multisite large academic medical system and resulted in pay equity. However, achieving overall gender pay equality will only be fully realized when women achieve parity in the ranks of the most highly compensated specialties and in leadership roles.