Supply and Demand Imbalances Drive Starting Cardiology Compensation Upward

Cardiologists are in high demand in the U.S. Likely a very obvious statement for the MedAxiom audience! To put some numbers behind this, the Association of American Medical Colleges (AAMC) estimates that the U.S. will face a shortage of between 5,800 and 15,800 cardiologists by 2030.¹ That’s only five years from now!

There are two main ingredients driving this need. Demand for services is increasing while the supply of cardiologists is decreasing – classic economic conditions that lead to price increases. And boy, have they!

The aging U.S. population and the increasing prevalence of cardiovascular disease (CVD) are two key factors driving the increased demand for cardiovascular services. A 2022 article published in the Journal of the American College of Cardiology projects that overall CVD will increase by more than 30% by 2060.² We are simultaneously losing cardiologists on a net basis in the workforce. This loss is due to several factors, but the main problem is one of simple math: we are replacing fewer cardiologists than those either slowing down or leaving practice altogether (Table 1).

Table 1: U.S. Cardiology Projections

1 Source: Joint American College of Cardiology (ACC)/MedAxiom calculations based in part on Medicare claims data.

2 Source: 2022 MedAxiom Cardiovascular Provider Compensation & Production Survey.

3 Source: MedAxiom projections based on both wRVU production reductions and physician departures.

4 Source: 2023 Accreditation Council for Graduate Medical Education.

FTE = full-time equivalency; wRVU = work relative value unit.

According to MedAxiom’s 2024 Cardiovascular Provider Compensation and Production Survey report, the overall median work relative value unit (wRVU) production per full-time equivalent (FTE) cardiologist in 2023 was 11,178. Median production drops to 9,853 wRVUs per full-time cardiologist for those who are aged 61 and older. Median wRVU production drops again to 8,979 per full-time cardiologist when considering those aged 66 and older – a 20% delta from the overall median. Given that a full quarter of the overall workforce is aged 61 and older, this “lost” production adds up.

On top of this reduced production, there are retirements, migration to leadership (administration) roles, and reductions in FTE status and call participation. Zeroing in on this last category, call participation drops to 70% for physicians aged 61 to 70, and then to just 38% for those aged 71 and up. For some practices, the recruitment of new physicians may be driven primarily by the need to cover call coverage gaps as it is by demand for services or full physician departures.

This isn’t a problem that can be fixed quickly by ramping up fellowship slots. It takes many years to become a cardiologist. For most, you start with four years of college followed by four years of medical school. From there, add three years for residency training in internal medicine, and then a minimum of three years of fellowship training in cardiology. Many will go on to an additional one to two years for subspecialization, such as electrophysiology or interventional cardiology. The length of training can be a deterrent for some physicians who are considering a career in cardiology. In total, it takes 14 to 16 years to create a new cardiologist. 

How Starting Compensation Has Increased Dramatically Over the Past 10 Years

In response to these basic principles of economics, hospitals, health systems and private practices have been offering increasingly competitive compensation packages to new graduates. According to MedAxiom's 2024 Cardiovascular Provider Compensation and Production Survey report, median total compensation for cardiologists under the age of 35 (our surrogate for a starting cardiologist) has increased from $214,000 per full-time physician in 2014 to $597,393 in 2023 (Figure 1).

Figure 1: Median Total Compensation per FTE Cardiologist Age 35 and Under

This represents an increase of 179% over the past 10 years and means that a newly minted cardiologist earns 90% of the overall median cardiologist salary!

A warning to my gentle readers: I’m leaving the data for a moment and providing some opinions. Having spoken to many cardiologists over my career, few would deny that they are better physicians later in their careers than they were fresh out of training. However, our production-dominated healthcare economy – and likely the mass migration of physicians from private practice owners to hospital employees – has minimized the value of experience. There are few professions where this is the case, at least so dramatically.

In the current system, value is determined primarily based on production, not on skills or experience. The scatter gram in Figure 2 proves this point with just a small percentage of exceptions, which are likely caused by pooling even while the pool itself is generated by production. Granted, the RVU system at least in part attempts to recognize different skills and training, but there is zero difference between a new graduate performing a service compared to a physician with 20 years of experience, or performing the service expertly compared to performing it poorly.

Figure 2: Physician Compensation and wRVUs

Final Thoughts

The shortage of cardiologists in the U.S. is expected to continue – and grow – with no relief in sight. Meanwhile, demand for services will continue to rise with projections showing this trend continuing for the next 25 years. These classic competing factors will inevitably boost compensation for physicians, particularly new cardiologists who are entering a heavily favored seller’s market.

What this also means is that provider organizations will be wise to work hard to retain the physicians they already have. Accommodating slow-down requests, job sharing, shift work and other non-traditional work roles may become paramount.

For hospitals and health systems, while the migration of private practice cardiologists to hospital employment was swift and pervasive (nearly 90% according to MedAxiom data), it has been driven predominantly by economics, not strategy. Over time these economic differences have narrowed, and physicians are paying more attention to job satisfaction and day-to-day fulfillment. These have not necessarily been the strong suits for hospital employers.

In addition, there are new competitors in the market that didn’t exist just a few short years ago. Private equity, as one example, is chomping at the bit to pull employed cardiologists back into private practice where they will compete vigorously with hospitals for ambulatory testing and procedures – with some signs of success already in the books.

What was successful in the past for attracting young talent may not work in this new era of sustained physician deficits. Compensation is certainly one lever, but the data suggest it has largely been tapped out as a resource. This means that programs will need to rely on other assets to stand out from the pack.

After all, it’s not the strongest who survive and thrive – it's the most adaptable!

References:

1. The Complexities of Physician Supply and Demand: Projections from 2021 to 2036. AAMC.org. Published March 2024. Accessed December 11, 2024. https://www.aamc.org/media/75236/download?attachment.
2. Mohebi R, Chen C, Ibrahim NE, et al. Cardiovascular disease projections in the United States based on the 2020 census estimates. J Am Coll Cardiol. 2022;80(6):565-578.