Despite decades of equal pay legislation and growing awareness of gender and racial disparities in medicine, compensation gaps persist in healthcare, with women physicians and doctors of color consistently earning less than their white male counterparts.
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January 2025A recent Association of American Medical Colleges (AAMC) report showed persistent pay inequities in academic medicine (AAMC. https://tinyurl.com/yrsw54xn). Among other disparities, the report found that white male physicians consistently receive higher median compensation than both men of other races and women of all races and ethnicities and that gender remains the primary driver of compensation inequities, with men consistently earning more than women of the same race and ethnicity. These differences persist even after accounting for rank, specialty, and degree.
ENTtoday spoke with attorney Jason Rittereiser, managing partner at HKM Employment Attorneys LLP in Seattle, who said the problem is systemic. He offered suggestions about what healthcare institutions and physicians alike can do about it.
Remember that raising concerns about pay equity is a legally protected activity—employers cannot retaliate against you for bringing these issues forward. — Jason Rittereiser, managing partner at HKM Employment Attorneys LLP
Q: How widespread is the pay equity problem in healthcare?
A: In nearly every healthcare institution I’ve encountered, pay inequity is well-documented. I have yet to find any medical specialty or healthcare organization where equal pay concerns aren’t endemic. White men consistently earn more than minority men, substantially more than women, and even more significantly than minority women. What’s troubling is that most times these pay inequities violate existing laws.
Q: Does the RVU system contribute to these disparities?
A: The relative value unit (RVU) system, while designed to standardize compensation, often perpetuates existing inequities. First, we frequently see different dollar values assigned per RVU. For instance, a female surgeon might receive $20 per RVU, while a male surgeon receives $30 for the exact same procedure. Even when per-RVU rates are equal, though, referral patterns can create significant disparities. We’ve seen cases where internal coding systems themselves show bias, with men being listed as “surgeons,” while women with identical qualifications are listed as “ENTs,” even though all ENTs are surgeons. This affects how primary care physicians make referrals and can unknowingly direct higher-value cases to male physicians.
Q: Can you give us a bit of the history of the legal protections that exist for those facing pay discrimination?
A: In 1964, the Civil Rights Act made it unlawful to pay women or minorities less than men, but it was an ineffective drafting of legislation that had almost no impact on pay disparities. A year later, the Equal Employment Opportunity Commission (EEOC) was created as an outlet for pay disparity complaints, but, like any government agency, its ability to be effective against large, sophisticated corporations has been pretty muted. In 2009, President Obama signed the Lilly Ledbetter Fair Pay Act into law. This became a minimum threshold which amended and bolstered the Civil Rights Act on equal pay. Unfortunately, both laws have been largely ineffective because their standard of proof became very difficult to fulfill. Employers would often get away with saying that the man in any given situation was performing a different job.
Q: What about state laws?
A: State laws have filled the gap in many ways, and we have seen state legislatures be able to act more quickly than Congress to pass pay equity laws. In general, state laws have more clearly defined what violates the law. For example, a woman and a man do not have to be performing the exact same job, but if they’re performing the same or similar tasks and being paid less, that violates the law and creates a standard of proof that is more achievable in our court system.
However, the level of protection varies dramatically from state to state. For example, some states have required pay transparency disclosures while others have not. There’s been a culture of not disclosing compensation because that’s considered private information, but that really only benefits employers. Coastal states like Washington and California typically offer significant employment protections, while many southern and midwestern states rely primarily on federal standards. The most effective state laws include three key elements: strong transparency requirements, significant penalties for violations, and achievable standards of proof for claims. Very often, though, the only thing that stands between an organization violating the law or not is a plaintiff’s employment lawyer suing the organization.
Q: When and how should physicians address pay equity concerns?
A: Timing is crucial. While you have more leverage after receiving an offer, it’s valuable to raise questions about pay equity practices during the interview process if you can. It’s best to frame these questions around organizational values. Ask about the institution’s approach to pay transparency and whether they conduct regular equity audits. For example, you can say, “I’m really excited about this position and your organization, which seems to reflect my values. One question I have, though, is how the organization treats pay transparency and whether there’s an audit process to ensure that pay equity is an important aspect of the organization’s values.” Remember, interviewing is a two-way street, and you are interviewing them every bit as much as they are interviewing you.
For physicians already in practice, it’s important to regularly review compensation, particularly during annual adjustments. It’s never a bad idea to maintain records of your productivity, achievements, and any pay discussions you’ve had. Remember that raising concerns about pay equity is a legally protected activity—employers cannot retaliate against you for bringing these issues forward.
Q: How can physicians protect themselves when raising pay equity concerns?
A: While discussing the issue of pay equity can be daunting, once physicians take that first step, they are often surprised to see how many people this affects in their organization. For example, if female head and neck surgeons are being underpaid in comparison to male head and neck surgeons at your institution, then the female general surgeons are probably being underpaid in comparison to the male general surgeons. And it goes on and on like that. Where there’s smoke, there’s usually fire. There is power in numbers, so collective actions with multiple physicians are a good way to go. While individual cases can be dismissed as anomalies, patterns of disparity are harder to ignore and often indicate systemic problems requiring institutional attention.
Q: What should healthcare institutions be doing to address these issues?
A: Organizations should conduct regular, independent audits of their compensation practices. These audits should examine not just base pay but all factors affecting compensation, including RVU values, referral patterns, and opportunity distribution. Institutions need transparent compensation systems with clear criteria for advancement and salary adjustments. They should regularly review their internal processes, including referral systems and coding practices, to identify and eliminate built-in biases.
Q: What are the consequences for institutions that don’t address pay inequity?
A: Besides potential legal liability, institutions that fail to address pay equity face increased turnover, reduced morale, and difficulty recruiting diverse talent. We’ve seen cases where the cost of defending and settling pay discrimination claims far exceeded what it would have cost to ensure equitable compensation from the start. Moreover, as transparency increases and more physicians become aware of their rights, institutions that don’t proactively address these issues risk damage to their reputation and ability to attract top talent.
Renée Bacher is a freelance medical writer based in Louisiana.