More Training Doesn’t Always Pay: Physician Compensation Insights for Early Career Doctors

Physicians go through an extensive and expensive training process, and for many, this journey continues well beyond residency. Medical school alone can cost hundreds of thousands of dollars, and after that, residency may range from three years or more, depending on the specialty. Some physicians, particularly those pursuing fellowships in subspecialties, may train for eight years or longer before fully entering the workforce and earning attending-level compensation.

When deciding on your training path, we recommend you first consider what you want from your career. While future compensation is certainly a factor, it should not be the sole driver. In fact, nearly all physician compensation models provide the opportunity for a comfortable lifestyle, regardless of specialty. 

However, compensation can vary significantly between specialties and within specialties, and surprisingly, pursuing additional training doesn’t always result in a higher salary. Let’s consider when advanced training might pay off in increased compensation, and where it may not.

The ROI of Fellowship Training

When considering a fellowship, after considering your career goals and what practice setting will make you most happy, it may be important to think about the return on investment (ROI). That means calculating the opportunity cost of staying in training for another one to three years or more instead of entering the workforce as an attending and earning attending-level compensation earlier.

During those additional years of fellowship training, fellows typically earn between $50,000 and $80,000 per year, depending on the program. In contrast, stepping into an attending role right after residency can lead to a six-figure salary. For example, an internal medicine-trained physician may earn $300,000 to $400,000 or more as a hospitalist. If you extend your training by three more years, you could be delaying ($300,000 to $400,000 – $70,000) x 3 = around $600,000 to $800,000 in potential earnings. That’s a significant gap to make up!

There is a meaningful difference in long-term earnings in some specialties. For instance, a gastroenterologist might earn $500,000- $600,000 or more in a typical hospital-employed role, compared to an internist making somewhere in the $300,000-$400,000 range. In this case, the $600,000 to $800,000 in initial earnings gap could be resolved in around 3 years.

But that’s not a guarantee, and this math can vary widely based on the specialty, where you practice, how you practice, and the geographic area you’re in. Additionally, our progressive income tax system will result in higher taxes and less neg income as you move up in earnings, which prolongs the ROI calculation.

Let’s look at these nuances across a variety of specialties.

Sub-specialization and Academic Medicine

Some of our clients are surprised to learn that becoming highly subspecialized can limit their career options and reduce compensation potential. Generalists in higher-demand specialties often find ample job opportunities across hospitals, private practices, and academic centers in many geographic regions. If flexibility in job opportunities is important to you, keep this in mind. 

In contrast, physicians who become highly focused on a niche area within their specialty may find that the number and availability of positions where they can truly practice at the top of their scope is significantly reduced. Many super-sub-specialized surgeons need to be in a large academic center in a major city to have access to the patient volume necessary to maintain their skills and build their niche practice. Smaller regions may not generate enough patient demand to support their work. For example, I suspect most smaller metro areas cannot support an ocular oncologist or a kidney transplant surgeon.

Additionally, academic centers in urban areas typically offer lower compensation compared to rural or non-academic settings. While the training may align with your professional goals, it’s important to recognize that these positions can also limit your ability to choose where you live and may ultimately impact your earning potential.

Pediatric Fellowships: Meaningful, But Less Rewarding Financially

We often hear from pediatric specialists who are surprised to find that their compensation is lower than that of adult specialists in similar fields. For example, pediatric gastroenterologists tend to earn less than adult gastroenterologists. The same holds true for pediatric orthopedics, pediatric ophthalmology, and maybe even child and adolescent psychiatry.

A big part of this difference is that most physicians are paid based on volume, and the amount payers are willing to pay per service is not often higher for pediatric subspecialties. Pediatric patients often require more time and attention, which typically reduces the number of patients and corresponding volume a physician can see and realize. Many pediatric services are reimbursed at equal or lower rates, and payer models generally don’t typically provide financial incentives for working with pediatric populations. Even with a full panel, the compensation might be similar, or lower than a generalist role serving adults.

Pursuing fellowship from a pediatric residency may be a fruitful endeavor, but pursuing a pediatric fellowship from a general residency may not.

While serving children is a noble and fulfilling career path, physicians should go into it with a clear understanding that additional fellowship training in pediatrics might not lead to financial advantages.

OBGYN Fellowships: The Compensation Landscape

In OBGYN, there are several fellowship options, including minimally invasive gynecologic surgery (MIGS), maternal-fetal medicine (MFM), reproductive endocrinology and infertility (REI), complex family planning (CFP), urogynecology, gynecologic oncology, and others. Each offers a different compensation structure and workload.

General OBGYNs in hospital-employed roles often earn between $250,000 and $500,000 annually, with compensation varying substantially by geography, volume, and practice setting. In urban areas or academic hospitals, particularly if total volume is lower, total compensation can commonly fall below $300,000. 

MIGS roles, in our experience, typically offer compensation like generalist OBGYN roles. In fact, because MIGS physicians often take fewer calls and may generate fewer wRVUs, their total pay might be slightly lower. If a MIGS-focused physician is earning at the same $/wRVU rate as a general OBGYN in a production-focused compensation model, they may earn less than their general OBGYN counterparts. Similarly, physicians in gyn-only roles, which do not require a formal fellowship, often earn less than those practicing full-scope OBGYN. However, lifestyle matters, and MIGS or Gyn-only may be able to sidestep the rough call schedules experienced in general OBGYN, which may be an attractive trade-off.

MFM is a fellowship where we see notable financial upside. MFM physicians in hospital settings frequently earn a few hundred thousand dollars more than generalists, driven by both higher wRVU volume and elevated $/wRVU rates. This can make up for the three extra years spent in training in a comfortable timeline. However, MFM in academics, compared to general OBGYN in a busy hospital employed setting, likely won’t pay off financially.

REI is a bit more complex. Most REI physicians consider private practice roles, and private equity has bought out many formerly independent physician-owned practices. Starting salaries in private equity-backed groups often range from $250,000 to $350,000, with the potential for substantial volume-based bonus structures. Successful physicians in well-structured independent practices can earn $500,000 to $700,000 or more. The variance is substantial! We believe ownership opportunities often make a difference here, and many private equity firms are aggressively buying REI groups and reducing the number of independent opportunities. Physicians should be cautious about entering currently independent practices that may be sold before they realize the financial benefits of ownership or can participate in the sale (or vote against the sale).

Urogynecology, on the other hand, typically offers only a modest bump in pay but requires three additional years of training at an opportunity cost of more than $500,000. It might take a decade or more to reach the financial break-even point compared to a generalist path, or it may never eclipse.

CFP fellowship is relatively new, but we have several years of experience in the firm. They are sometimes not treated differently from general OBGYN and may be required to participate in the general OBGYN call pool, which can be rough. We have seen practices that bring on a CFP and discuss building a clinical and procedural practice that allows them to focus on their area of training, only to simply not do that in practice. We currently don’t see a market difference in compensation when pursuing CFP. If the compensation model is production-based, we are often concerned that a clinical practice focused on this area may lead to lower volume and lower compensation compared to a general practice. 

Last OBGYN Tip: We rarely see independent physician-owned private OBGYN generalist practices. The payer mix matters, and independent generalists are struggling to compete against the hospital-employed opportunities. Like psychiatry below, specialties where the hospital system breaks even or loses money on the specialty often mean private practices are struggling to remain competitive against them. Also, we regularly see trap contracts and nasty exit strategies from private equity-owned general OBGYN practices. We saw one recently where the physician was doing 9,000+ wRVUs in a private equity-owned practice and was earning between $250,000-$300,000; however, they left for a hospital-employed position that would pay around $450,000+ for the same volume of work! Look past starting salary and signing bonuses, and make sure you understand how your volume will be compensated long term!

Orthopedics: Fellowship Matters Less Than Practice Setting

In orthopedics, our experience is that compensation is heavily driven by practice setting. While academic assistant professor orthopedic surgeons may earn around $500,000 or less, those who own independent practices with ancillary revenue profits, ASC ownership, and real estate ownership often earn $1M-$2M or more. Fellowship might lead to more opportunities in an independent ownership setting, so keep this in mind.

Although fellowships in Spine and Hip/Joint typically lead to higher earnings than other subspecialties, Foot and Ankle orthopedic surgery tends to result in the lowest compensation. Trauma pays well but depends heavily on whether you’re paid by salary or per shift, wRVUs, or some hybrid model, and whether you’re pursuing lucrative rural locum opportunities or more urban, large system, or academic opportunities. Many trauma roles require careful negotiation to ensure compensation reflects the often lower wRVU output. If you’re in trauma and paid solely on a $/wRVU rate that’s consistent with general orthopedic surgery, we have seen this result in poor long-term compensation outcomes.

MGMA data suggest wild variances in total compensation among orthopedics, and even wilder total volume production. This can vary 3x-4x! Ortho compensation is often what you make of it, so we don’t recommend a rigid approach to considering total compensation.

Overall, the most financially rewarding long-term path often involves accepting lower guaranteed compensation in the first two or three years in a thriving independent physician-owned practice, in exchange for long-term ownership with an ancillary, ASC, and real estate ownership component. However, the risk is real, and early-career orthopedic surgeons need to assess each opportunity closely.

Last Ortho Tip: Watch out for the private equity buyout while you’re ‘paying your dues’ in an independent physician-owned practice. Imagine a scenario where you’ve earned around $400,000 per year for three years and are on the cusp of ownership that comes with total owner remuneration of $1M-$2M, but the practice sells to private equity and your future earning potential is 50%-70% of that. We have seen the rug pulled out. There are ways to negotiate for some protection here, but we have seen mixed results. 

Ophthalmology: Fellowship Value Varies

Like orthopedics, ophthalmology compensation depends heavily on the practice model. Retina specialists seem to earn the highest salaries among fellowship-trained physicians, while Cornea and Glaucoma fellowships do not seem to offer a significant financial edge. In fact, cornea and glaucoma specialists often serve older patient populations with a Medicare-heavy payer mix, which tends to reimburse less. 

Oculoplastics is another area with high variability. Some physicians in private practice earn as much as retina specialists, but success here depends on individual practice dynamics, market demand, and payor mix. A heavy cash-pay practice may lead to more compensation, but we recommend you vet each opportunity with an open mind. There is very limited data on compensation norms here.

Last Ophtho Tip: In our experience, ophthalmologists who own successful private practices with ancillary revenues, ASC ownership, and a real estate play tend to see the highest overall remuneration.

Psychiatry: General Adult Compensation is on the Rise

In psychiatry, general adult practice with high volume is now often the most financially attractive route. Hospital-employed psychiatrists, particularly those in outpatient roles and in rural settings with higher volume, are being paid more than ever. The rise of telepsychiatry has opened new doors and softened the impact of punitive noncompete clauses on psychiatry career mobility in urban settings that may have lower-than-national compensation norms. Many psychiatrists can now live anywhere and work remotely for competitive pay, sometimes more than what local in-person jobs offer in less attractive geographic regions. New Orleans is a good example, as the local market is highly monopolized by a couple of large employers that often offer mediocre pay.

Child and adolescent psychiatry used to come with a noticeable pay bump, but that’s largely disappeared in the hospital-employed world. Academic CAPs might experience a modest bump in compensation compared to their general adult counterparts, but it’s rarely substantial. Private practice ownership in CAP looks to be essentially the same as general psychiatry, and more correlated with whether the psychiatrist can build a lucrative cash pay practice or is able to build an employed therapy practice. 

Forensic psychiatry is another wild card, and compensation data is exceedingly slim. Few employed jobs exist in pure forensics, though some physicians mix general adult work with cash-pay forensic evaluations in private practice. Forensics is more about what you make of it.

Interventional psychiatry—like TMS, ECT, Ketamine—is another high-potential space. Hospital-employed interventional psychiatrists have been known to earn between $600,000 and $1 million annually, but those are unique examples, and this area of psychiatry does not come with robust data. With low startup costs and the ability to scale more than the potentially more labor-intensive general practice, this space is also ripe for entrepreneurial physicians to build high-margin cash-pay practices.

Two Psychiatry Tips: First, many hospital systems don’t make money in psychiatry. Similar to OBGYN, this puts a lot of pressure on independent private practice. Some of the worst deals we see for psychiatrists are employment contracts with smaller independent private practices that only take insurance and Medicare/Medicaid. This weak payor mix, paired with potentially receiving only 40%-70% of the insurance and Medicare/Medicaid rates in a net collections compensation model, makes it exceedingly difficult for these opportunities to be competitive. There may be ample pressure from the practice to supervise multiple NPs and PAs for free or at a rather low rate, making it difficult to recommend them as attractive employment contracts. Many hospital-employed psychiatrists experience production models that pay $60/wRVU to $80/wRVU, and even operate at a loss. For example, your typical CPT Code 99214 for a follow-up med check patient results in 1.92 wRVUs, potentially bumping to 2.25 wRVUs if you can also bill the G2211 code. This may pay $60-$80 x 1.92 to 2.25 = $115.20 – $180.00 per typical follow-up patient visit. Doing this for around 20 patients a day in a high-volume practice, for around 230 days a year, can lead to rather large ortho-like compensation. However, if you’re receiving only a portion of the insurance or Medicare/Medicaid rate, your total pay could be a fraction of this. 

Second, we believe that the massive physician shortage in rural psychiatry will lead many hospital systems outside of major metro areas to consider pure-remote or almost-pure-remote psychiatry to fill that gap. This could lead to very attractive opportunities for psychiatrists who prefer to live in urban centers but want to benefit from an often substantial rural pay bump. 

Anesthesia vs. Pain Management

Once considered a financially sound next step from Anesthesia, we believe Pain Management fellowships no longer provide a clear financial advantage. In today’s market, we see an anesthesia shortage, and many anesthesiologists earn more right out of residency than early-career pain specialists, especially if pain physicians start in initially low-paying private equity platforms or in pre-ownership track employment agreements with independent physician-owned private practices.

However, pain management seems to offer a very notable higher ceiling. A successful private practice owner who also benefits from ancillary revenues, ASC ownership, and a real estate ownership component can certainly create 7-figure total remuneration opportunities. This ceiling is rather contained comparatively in anesthesia.

Lifestyle is also an important factor. Pain physicians often avoid night and weekend work, whereas an extensive call expectation and 24-hour shifts can lead to rough work expectations in anesthesia. 

Last Anesthesia/Pain Tip: If you’re in pain management, particularly private equity-owned or physician-owned practice, you’ll likely have a truly terrible noncompete that may apply to a large geographic area. Pain can be very competitive from a business perspective, and that seems to be reflected in noncompete clauses. However, you may want to consider keeping your anesthesia skills sharp through negotiated and approved moonlighting opportunities, particularly during the first few years of your practice. Additionally, we have had success limiting the noncompete to only pain management, allowing you to exit a pain practice and pursue anesthesia-only work without concerns about the noncompete. This can be very helpful as you evaluate job prospects and if you are highly motivated to stay in a particular geographic area but would be prevented from doing so by a terrible noncompete.

Internal Medicine Fellowships: Choose with Care

Internal medicine fellowships vary widely in their financial impact. Hospitalists can earn $300,000+ immediately after a three-year residency without additional training. If you pursue a fellowship like cardiology, gastroenterology, or hematology-oncology, you’re likely looking at three or more additional years of training with salaries in the $60,000 to $70,000 range. The net loss could be $600,000-$800,000, massive.

While these fellowships typically result in significantly higher long-term pay, the breakeven point may not come until six to ten years after you finish training. For example, we regularly see hospital-employed cardiologists, gastroenterologists, and heme/oncs making $500,000+ right away in a hospital-employed opportunity. Business ownership in successful independent cardiology and gastroenterology practices, and in some cases, heme/onc, can be $1M+. The ceiling for these specialties is far higher than that of a hospitalist. You benefit from that compensation bump, but it may take a few years to catch up.

On the other hand, fellowships in endocrinology and infectious disease often lead to similar or even lower compensation compared to hospitalist roles. Unless you’re entering a unique, high-volume private practice, these paths may not result in a financial gain.

Final IM Tip: Personal finances matter! An internist who continues to live like a resident while earning as an attending for three years may have ample funds to invest and grow faster than a specialist who decides to live like an attending right away. Additionally, compensation advantages are far less or sometimes eliminated in full when comparing a hospital-employed hospitalist (rural area pay bumps help too!) with an academic cardiologist or gastroenterologist. If you’re endo or ID, consider whether continuing to work hospitalist moonlighting shifts may be a good way to keep those skills sharp and offer more career flexibility, particularly if you have a rough noncompete and are tied to a particular area (similar to the anesthesia/pain noncompete analysis above).

Final Thoughts and Tips

It’s important to keep in mind that most physicians experience compensation norms that vary wildly based on:

1. Volume
2. Geography
3. Practice Setting

For example, it’s not crazy for a busy hospitalist to outearn an academic cardiologist, or a psychiatrist in the most lucrative setting to outearn an academic orthopedic surgeon. Specialty choice does matter, but it’s often not the deciding factor in long-term compensation.

It’s critical for physicians in training to understand typical market norms. Not every fellowship offers a financial payoff, and more training doesn’t always equal more money. We encourage early career physicians to understand what compensation data suggests about typical market norms, think about their personal goals, and consider all aspects of the decision – not just the title or prestige of a fellowship or the potentially misguided expectation that more training means more money.

If you’re considering additional training and want help understanding the compensation norms and market trends relating to this decision, our firm offers a Compensation Consultation service designed to help you make informed decisions. We pull from real physician contract experiences and macro-level data to provide you with tailored insights.

To schedule a consult, visit michaeljohnsonlegal.com. We’re here to help you navigate the business side of medicine with clarity and confidence.