Academic vs Private Practice Physician Salaries: Why Is There a Pay Gap?

Physician compensation can vary greatly between academic medical centers and private practices or community settings. In fact, studies have shown that academic physicians earn 10–15% less than their non-academic counterparts. But this gap isn’t uniform across all specialties – it can be negligible in some specialties and very large in others. For example, one analysis of 2022 data showed the pay difference ranging from about $56k in Endocrinology to $160k in Cardiology‍¹.

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Similarly, the physician salary data on Marit based on anonymized submissions from 8,000+ physicians shows sizable gaps in certain specialties - e.g., an academic allergist salary makes an average of $200k vs their counterpart making an average of $302k in private practices. Similarly, an academic plastic surgeon salary is $470k vs $600k outside academia.

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So why does this pay gap exist and why does it vary so much from specialty to specialty? Lets dive in.

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Key Factors Behind the Pay Gap

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‍Clinical Workload

‍The most significant factor is the amount of patient care provided. Academic physicians often see fewer patients than private practitioners because they split their time with other non-clinical responsibilities. In private practice, a physician's income is directly tied to how many patients they see or procedures they perform – “see more patients, generate more charges and thereby more collections”.² Academic doctors, however, may spend a significant portion of their day on research or teaching, so they generate less billable revenue² ‍

‍Payer Mix and Reimbursement Rates

‍Academic medical centers often serve as safety-net hospitals, treating a higher share of patients on Medicaid, Medicare, or without insurance (AAMC). These government programs reimburse at lower rates than commercial insurers, meaning the same service generates less revenue. In contrast, private practices may attract a more favorable payer mix, with a larger proportion of patients covered by high-paying private insurance.

Case Mix

‍While academic centers often manage more complex cases (source), research trials, and rare conditions, these cases can be time-intensive and less lucrative. In contrast, private practice physicians generally perform a higher volume of routine or elective procedures that are well-reimbursed and more predictable.

Institutional Overhead (“Academic Tax”)

‍In academic settings, a significant portion of clinical revenue, often referred to as the “academic tax”, goes toward supporting the institution’s broader mission (source). This includes funding residency programs, maintaining research infrastructure, and covering extensive administrative costs. As a result, the income generated from patient care is spread thin before reaching the physician. In contrast, private practices typically operate with lower overhead and fewer layers of distribution, allowing physicians to retain a larger share of the revenue. In small or solo practices, profits are divided among fewer people, while academic earnings are filtered through departments and administrative budgets. This disparity in overhead often translates to lower take-home pay for academic physicians, even when their clinical workload is comparable.

‍Compensation Models

Pay models often differ between the settings. Academic physicians are frequently salaried employees with standardized pay scales (often based on academic rank and seniority) and limited bonus potential. By contrast, many non-academic physicians work under productivity-based or partnership models that reward higher output. See more about the various compensation models and how they vary by practice types and specialties here

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Of course, salary is just one component of a physician’s total compensation and just one of many reasons a physician may prefer working in an academic vs. private practice setting. Academic positions often come with non-monetary perks like more predictable hours, lighter call schedules, and generous benefits (e.g. robust retirement plans, tuition benefits, more paid vacation). Additionally, these roles offer prestige, teaching and research opportunities, and job stability that many find rewarding beyond the paycheck. That said, the overall pay satisfaction - a metric that takes into account not just the pay but workload, schedule, benefits, among other things - for physicians in Academic settings is 3.4★ vs 3.6★ in non-academic settings. See here for all physician salary trends.

Clinical Workload: The Biggest Difference

Among all these factors, clinical workload, i.e. how much time a physician spends on direct patient care, is the largest driver of the pay gap. Academic physicians typically have a lower clinical workload than their private practice peers, which directly limits their earning potential. Marit data contributed by real physicians illustrate a clear correlation: specialties where academic doctors spend a smaller portion of their time on clinical duties tend to show the largest academic vs. private pay gaps. 

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For example, specialties like Allergy & Immunology or Rheumatology have some of the lowest clinical loads (~70–75% of their total working hours are dedicated to patient care), with the rest spent on research, teaching, or administrative tasks. Consequently, these specialties show some of the widest pay gaps.

In contrast, looking deeper into Hospital Medicine salaries, Emergency Medicine pay, or Anesthesiology salaries, academic faculty spend roughly 90–95% of their time on clinical work, and the pay gap in their specialties is virtually negligible - e.g., academic anesthesiologists earn only about 8% lower than non-academic anesthesiologists. See here for breakdown of physician salaries by academic affiliation and other dimensions.

Conclusion

The compensation gap between academic and private practice physicians is driven by a variety of factors, and can vary a lot from specialty to specialty. This is why the overall averages can be deceiving. As we have covered before, the pay differences within a specialty can often be larger than the pay differences across specialties, and one of the key factors driving the variance is practice setting.

It’s important to remember that lower pay in academics doesn’t mean those jobs are undesirable – it just reflects a different set of priorities and rewards. Many physicians find value in the academic environment: the chance to teach, the pursuit of research, and being part of a prestigious medical center. These roles can offer intangible benefits and lower burnout, despite a smaller paycheck.

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About the Data & Methodology

Marit's Data is different. It is -

Unique - since it captures the compensation data along with all the details that matter - bonuses, shifts, scheduls, benefits, and more

Comprehensive - Across all specialties and Professions (Physicians & APPs), Employer Types (large and small, including Self-employed, Academic & Non Academic), Job Types (Full Time, Part Time, PRNs and Locums) and Employment Types (W-2, 1099, K-1)

Current - Unlike other benchmarks that only update their data once a year, all salaries reflect the clinician’s current compensation, and all averages are updated in real-time as new salaries are added

All data in this report comes from anonymized salary contributions on Marit, as of Jun 28, 2025. Only verified salary reports approved by our moderation team are included.

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Feedback?

If you have any suggestions or requests for customized analysis or topics of research - we'd love to hear from you.

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References

1. Veralon Consulting – Physician Compensation Gaps Analysis (2022)
2. Medical Economics – Academic vs Private Practice Tradeoffs
3. Reddit – Physician Discussion on Academic Pay
4. NIH - Mission-Aligned Funds Flow”: Effect on Clinical Departments
5. AAMC - The impact of federal actions on academic medicine and the U.S. health care system
6. NEJM - Health Systems in 2030: Paying for the Telehealth Train