Let\u2019s look at some data on mean annual physician income in the U.S. compared to other countries: <\/p>\n
U.S.: $458,100Canada: $194,700Netherlands: $185,700Sweden: $115,200<\/p>\n
Why are U.S. physician incomes so much higher than other developed countries? Is it a good idea to try to drive down physician incomes?<\/p>\n
An NBER working paper by Buehler et al. (2026)<\/a> aims to answer this question. Rather than look at absolute incomes, the authors focus on where physicians incomes place them in their country\u2019s income distribution. They find that:<\/p>\n First, across all four countries, physicians are a common high-income occupation. Few physicians are below the top two deciles of earners nationally. Second, the U.S. has particularly high mass in the top two percentiles. Physicians in Canada and the Netherlands are somewhat less concentrated in the top percentiles; their distributions show more mass from percentiles 70 to 95. Approximately 19% of Canadian and Dutch physicians are in the top percentile, with the majority in the top decile. In these countries, a meaningful share of physicians is located further down the income distribution than in the U.S. The Swedish distribution appears different from the other three countries, as only about 5% of Swedish physicians are in the top percentile of the Swedish income distribution. More Swedish physicians fall in the 80th\u201394th percentiles than in the other countries.<\/p>\n So the U.S. does have higher incomes but much of this is explained by higher income overall. However, physician in the U.S. are more likely to be in the top percentile earners than the other three countries. What would happen if we adjusted the U.S. percentile income distribution to match that of other countries. When this recalibration occurs, this explains at most 22% of the differences in physician incomes between the U.S. and other countries. <\/p>\n Another reason U.S. physicians earn more is that there are relatively more specialists compared to primary care physicians (PCPs): <\/p>\n \u2026physicians\u2019 concentration at the top of the income distribution is more pronounced for specialists than for physicians overall. For primary care physicians, in contrast, there is more mass in percentiles 60\u201394. In the U.S., 42% of specialists are in the top percentile of the national income distribution. Combined with the 98th percentile, over half of American specialists are in the top 2%. Canadian and Dutch specialists are also prominent at the top, with over one-quarter of Canadian specialists and over one-fifth of Dutch specialists in the top percentile. <\/p>\n In short, why are U.S. incomes higher? First, people in the US earn more and the US wage distribution is more right skewed than other countries. Second, there are relatively more specialists compared to PCPs in the U.S. Third, there are likely more business opportunities (e.g., practice ownership, entrepreneurial activities) in the US as well. Fourth, institutional conditions likely matter. The US is a more decentralized system; conversely, the authors wonder whether Swedish physicians\u2019 lower salaries are due to the predominance of salaried, public-sector healthcare employment and government\u2019s use of monopsony power. <\/p>\n In interesting paper throughout. You can read the full paper here<\/a>. You can also check out Alex Taborrok\u2019s summary of the paper on Marginal Revolution<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" Let\u2019s look at some data on mean annual physician income in the U.S. compared to other countries: U.S.: $458,100Canada: $194,700Netherlands: $185,700Sweden: $115,200 Why are U.S. physician incomes so much higher than other developed countries? Is it a good idea to try to drive down physician incomes? An NBER working paper by Buehler et al. (2026)…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-12233","post","type-post","status-publish","format-standard","hentry","category-articles"],"_links":{"self":[{"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/posts\/12233"}],"collection":[{"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/medical-article.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12233"}],"version-history":[{"count":0,"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/posts\/12233\/revisions"}],"wp:attachment":[{"href":"https:\/\/medical-article.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12233"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/medical-article.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12233"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/medical-article.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12233"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}