9 things every health care leader should know about compensation

Discussions about compensation, particularly when they are focused on disparities for women and other people who identify with one or more underrepresented groups, often elicit strong emotions from those involved.

For example, current leaders may feel defensive about their decisions and actions involving paying people who work for them, and workers may feel angry or upset if they know or perceive that they are not being paid fairly. Health care leaders should recognize that emotionally charged discussions may cause reasonable people to minimize or even abandon the facts in favor of whatever position they are advocating for.

The truth always matters. And though there is room for some interpretation, emerging and current leaders will be better able to participate in or direct discussions on compensation if they are armed with the facts and develop an evidence-based, data-driven, and rational approach.

To support productive conversations that advance pay equity for women in medicine, I have developed the following list of nine things every health care leader should know about compensation:

1. Studies show that, after accounting for co-variates such as part-time work, productivity, and a host of other factors, there is a documented problem of gender-related pay gap disparities for women physicians. This science sits squarely in a much larger body of literature that overwhelmingly shows pay disparities for women in almost every job and career category in the United States and beyond. While research may show gender disparities, reports cannot be used as evidence of unfair pay at any given institution that has not been specifically studied.
2. Women who also identify with one or more other underrepresented groups may be at particularly high risk for inequitable compensation.Numerous studies and surveys demonstrate that women of color, including women physicians (Marcellin, 2019), are paid at lower rates than peers (Marcelin et al., 2019). Though compensation data on women in medicine who identify with other minority groups such as sexual/gender minorities or individuals with disabilities are sparse, leaders should be keenly aware that intersectional identities tend to compound bias and discrimination. 
3. Published calls to action state that paying women physicians fairly should be a top priority for every dean, chair, health care executive, and business administrator. For example, the Association of American Medical Colleges (AAMC) published a report on compensation which states, “Empower your chairs to take ownership of the process as part of regular chair responsibilities” (Association of American Medical Colleges, 2019). The AAMC also released a gender equity position statement (Association of American Medical Colleges, 2020) as a call to action that included a major focus on fair compensation. Many other professional societies and other organizations are making fair pay a top priority as well. Examples include a position paper from the American College of Physicians (Butkus, 2018), a health policy statement from the American College of Cardiology (Douglas, 2019), and a white paper from the American Surgical Association (West, 2018).
4. Expecting new hires to negotiate fair pay, particularly early in their careers, is not considered best practice. One study noted that even with training in negotiations, “new junior faculty are hardly in a position to ensure their own salary equity” (Jagsi, 2013). Furthermore, the authors stated, “Those doing the hiring and setting the salaries need to be sensitized both to the corrosive impact of salary inequity on faculty morale and to the importance of working to avoid even small inequities early in women’s careers, particularly given evidence that such inequities grow over time.”
5. Paying women less than men for the same work is increasingly becoming illegal as states enact fair pay laws. These laws exist in part because expecting women and other people from underrepresented groups to negotiate their way to fair pay has not been a successful strategy. For example, in 2018 the Massachusetts Equal Pay Act went into effect—prohibiting wage discrimination based on gender. This new law makes it illegal for an employer to pay a woman less than they pay a man who does comparable work (Mass.gov, 2020).
6. Paying women less than men for the same work is unethical (Silver, 2018). The large body of literature documenting pay disparities for women is antithetical to the values, morals, and ethics of medical professionals.
7. Paying women physicians unfairly begins with their first position after training, and plagues them throughout their career (Lo Sasso, 2020). For an individual woman physician, this may result in millions of dollars in lost income, retirement, and investments (Mensah, 2020).
8. Women may be at a disadvantage for fair pay due to a host of nuanced issues that are documented in the literature (but are often left out of discussions). For example, gender bias may inform relative value units (RVUs) (Benoit, 2017). Many studies show that gender bias (subjectively rating women’s performance lower than male counterparts) creeps into evaluations completed by patients, peers, and supervisors, and lower evaluation scores begin in training for women physicians. (Klein, 2019) At top leadership positions, women may be absent altogether or be present in less authoritative roles than male colleagues (Schor, 2018).
9. People who dismiss or minimize pay disparities may not be knowledgeable about the evidence-base on physician compensation. For example, my colleagues and I analyzed physician compensation studies published over a recent 6-year period (2013-2019), and we found that these studies were disproportionately produced, cited, and disseminated by women (Larson, 2020). Interestingly, we also discovered that most of these studies were not funded—suggesting that many women are doing compensation research on their own time and at their own expense.

There is an urgent need to address gender-related pay disparities for women in medicine. Progress may be hindered or even derailed altogether if participants in the process (or other stakeholders) are not knowledgeable about the compensation-related evidence-base and relevant facts. The nine tips I highlight here are not intended to be all-inclusive; rather they are aimed at helping to prepare leaders prepare for challenging conversations about pay equity. Importantly, during this time when misinformation and disinformation is common, good health care leaders can distinguish themselves by educating others about what is known to be true. Great leaders, regardless of their gender, will be ethical (Silver, 2018) and use science and facts to drive change--even when they encounter resistance--to ensure that women are paid fairly.