January 6, 2020

Mayo Clinic's salary-only compensation model helped the organization reduce gender pay inequity in the vast majority of cases, according to a Mayo analysis published recently in Mayo Clinic Proceedings.

Read Advisory Board's take on the physician gender pay gap

Mayo Clinic's 40-year-old model tackles inequality

Gender disparity in physician compensation has been a problem in medicine for decades, and the issue might be getting worse, research suggests. For instance, the 2019 Medscape Female Compensation Report found that while more than 7,000 female primary care physicians reported an average annual salary of $207,000, male physicians reported an average salary of $258,000, resulting in a 25% pay gap, compared to 18% in 2018.

More than four decades ago, Mayo Clinic implemented a salary-only compensation model, mainly to reduce financial incentives for physicians to provide more care than is medically necessary, according to a Mayo release. The model can also be used to eliminate pay disparities among physicians by eliminating incentives and bonus pay, and making all benefits and non-salary compensation consistent across facilities and specialties.

To determine whether their model achieves pay equity, Mayo Clinic researchers reviewed compensation for 2,845 Mayo Clinic physicians, employed in Arizona, Florida, and Minnesota. The sample included 861 female physicians, as well as 722 nonwhite physicians, according to Mayo.

The researchers examined each physician's compensation, benchmark pay, leadership roles, and demographics to compare their salaries to the predicted salary range. Physicians whose salaries were not in the predicted range were re-examined.

The analysis confirmed that pay was equitable in 96% of the cases.

Eighty physicians were found to have higher compensation than the model's prediction, but researchers found no correlation between the gender, race, or ethnicity of these physicians and how much they were compensated. The researchers found the same results for the 35 physicians who were compensated less than the model predicted.

However, the researchers also found 31.4% of men held compensated leadership positions compared with 15.9% of women. Similarly, more male physicians were in the most highly compensated specialties.

Discussion

Sharrone Hayes, a cardiologist at Mayo Clinic and author of the study, said the analysis might be "the first to demonstrate that a structured compensation model achieved equitable physician compensation by gender, race and ethnicity, while also meeting the practice, education and research goals of a large academic medical center." Hayes added, "The analysis … was reassuring, not only that it was equitable, but that we as an organization adhere to our own standards."

However, Mayo Clinic CEO and study co-author Gianrico Farrugia acknowledged that "absolute gender pay equity will only be realized when women achieve parity in the most highly compensated specialties and leadership roles" (Mayo Clinic release, 12/23/19; Commins, HealthLeaders Media, 1/2).

Read Advisory Board's take on the physician gender pay gap

As Medscape's 2018 Physician Compensation Report indicates, male primary care physicians earn 18% more than their female peers (up from 16% in 2017), while male specialists earn 36% more than their female peers (up from 33% in 2016).

Advisory Board's Veena Lanka explains that why the industry should focus on the evidence showing "the gender pay gap in medicine is real—and growing."

Get the Insight
Download Now

Topics