Illustration: Doctors look at monitors during an operation. GARO / Phanie

In the Money What’s Up, Doc? Physicians' Pay, That’s What

Income has shot up as public medicine is losing out to far more lucrative private practice

The fact that every young Israeli who scores a (high) 740 or more on the psychometric exam opts for a career in medicine has always seemed to me like a waste of human capital. Instead of all these brainy people dedicating themselves to politics, scientific research, technology or art – all areas that require path-breaking creativity – they spend it in a field that demands high levels of skills but certainly not the country’s brightest minds.

For this unfortunate situation we can point our finger at the proverbial Jewish mother, who wants nothing else than for her offspring to practice medicine.

Alas, I was wrong. The Jewish mother is a lot smarter than we thought because being a doctor is the best way to become quite well off. And what mother always knew has been confirmed by three researchers at the Finance Ministry.

Alexey Belinsky, Galit Ben Naim and Yoav Hecht, in a study published this week, found that the average pre-tax pay for a doctor with at least 10 years work experience is 790,000 shekels ($231,500) annually, or 66,000 shekels a month.

Of that monthly figure, 19,000 comes from practicing privately (they are the only public-sector employees allowed to hold private sector jobs on the side) and the rest from his or her public sector pay (that is, working at a government hospital in the morning and a health maintenance organization clinic in the afternoon).

Those numbers refute the myth that doctors never earn back the 12 years they spend getting their medical education. Together with their private income doctors are the best paid professionals in Israel. They earn more than university lecturers, apparently more than lawyers and certainly more than what is conventionally thought to be the top-paying sector in Israel, high-tech.

The generous pay doctors enjoy has only developed over the last decade and was mainly due to two public-sector labor agreements in 2008 and 2011. The raises, which boosted doctors pay an astounding 76% over 10 years, came after complaints by the doctors about eroding pay and, in the case of the 2011 agreement, after a bitter strike.

The 2011 agreement achieved its goal of compensating doctors who had fewer opportunities to tap into the riches of private practice. Pay was boosted for doctors in the periphery and in specialties like anesthesia where there are fewer opportunities in private medicine. The result was that more doctors began working in the periphery and entering those specialties. It also helped to equalize pay between doctors.

But the pact failed in its other goal of coaxing doctors into spending more hours in public sector medicine rather than private. The average shift for a doctor in public medicine climbed, but just to 105% from 95% over a decade.

That’s unlikely to change. Private medicine is lucrative, but it’s especially lucrative for a powerful minority of practitioners number about 400 physicians, mainly department heads at public hospitals. They take the lion’s share of private-sector income, which grew by 1.3 billion shekels over the last decade -- more than Israel’s three biggest government hospitals earned during that time.

The fact that they have such huge earning power is due to their public sector jobs that earn them the reputation they can build their private practices on. But few of them feel any need to render service back to the system: The more a typical doctor earned from private practice, the less he or she was likely to be working in public-sector medicine.

Thus, the top 10% of physician earners had an average, before-tax annual pay of 1.9 million shekels, or 160,000 shekels a month, of which 60% came from private medicine. For the bottom 80% of doctors, private practice accounted for just 20% of their income.

Efforts are being made to restore some of the old public-private balance. Among other things, doctors at government hospitals are barred from referring their patients to their own private clinics. Another plan offers higher pay to doctors who agree to work exclusively in public medicine.

That will mean paying them monthly salaries of 100,000 shekels or more. It’s a lot, but peanuts compared to what they can earn privately.

The 2011 labor agreement is due to expire in two years, but the chance to shake up the system is destined for failure if the problem of a shortage of hospital beds and doctors isn’t solved. The bargaining chips will be with the doctors and not with the government. The treasury’s refusal to increase spending on those two items will only boomerang in the form of higher doctor’s pay in the future.

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