Why do physicians make so much?

According to this WaPo article, the average physician in the US earns $350K/yr. I didn’t click through to the actual data, but from the first table, I’m guessing that “average” means median, not mean. And physician income isn’t a Gaussian distribution—there’s a long right-hand tail for the specialties.

Why is this? It looks to me like supply-and-demand is a big factor. Despite the fact that allopathic and osteopathic medical schools have expanded class sizes in the last ten years, the supply of physicians hasn’t reflected that growth. This is because you can’t practice in the US without completing a residency, and until very recently, residency slots were not growing. Domestic and foreign-trained medical students compete for residency slots, so increasing domestic grads without commensurate increases in residency slots just means more competition, not more doctors.

Another factor mentioned is debt. Med students graduate with hundreds of thousands of dollars in loans. There’s also the opportunity cost of medical school, residency and for the higher compensated specialties, fellowships.

Obviously, not all physicians are raking in the big bucks. Primary care physicians and pediatricians are among the most poorly compensated (relatively speaking).

Not only is this not sustainable, but I suspect that it is already starting to change. Increasingly, tasks that were formerly performed by MDs are being done by physician assistants and nurses. Many routine surgeries are done partly or completely using robots. And in specialties like radiology, AI is proving to be more reliable than human docs, which will reduce demand for this specialty.

Why do physicians make so much?