By Vanessa Orr

In August, The Washington Post ran an article that reported on how much money doctors in the U.S. make each year. Based on a paper published by the National Bureau of Economic Research, the article also showed how much income doctors made from wages versus other sources of income.

While the amount of money that physicians earn garnered quite a bit of attention, the fact that doctors were making a good part of their living from outside business activities may have been lost in the shuffle. But doctors need to ensure—especially if much of their income is derived outside of their practice salary—that they are protected in case of a lawsuit.

“The interesting part of this article to me and to many doctors is that overall, when you look at the total population of doctors studied, 94 percent of their income came from wages,” said Matt Gracey, Managing Director, Risk Strategies / Danna-Gracey. “However, if you look at the top 10 percent of earners in the medical world, that number drops to 69 percent.”

He noted that within the top 5 percent of doctors studied, only 49 percent of their total income comes from wages, and that in the top 1 percent, that amount decreased to only 15 percent of their income coming from wages.

“This is a stark reminder that doctors who make much more than the average physician are doing so with what we assume are outside business activities,” said Gracey. “A lot of very successful doctors—and we know this from our experience insuring doctors—are doing different things to make money outside the normal course of practice, seeing patients and the like.”

This is important, according to Gracey, because doctors often believe that these outside income-producing activities, many of which involve medicine, are covered by their malpractice insurance. Examples of these activities may include serving as expert witnesses, providing independent medical exams (IMEs), taking part in product sales to patients, and becoming involved in clinical trials and other research.

“What these doctors need to understand is that malpractice insurance only covers direct patient care and administrative duties associated with direct patient care,” Gracey said.

While the article does not denote how physicians are earning money outside of wages, for example, if they receive real estate income, if the activity involved is linked to medicine, it’s imperative that they know what is and isn’t covered through their malpractice insurance.

“I am always surprised with the questions I get from doctors about the excluded activities in their malpractice insurance coverage,” said Gracey. “As these top wage earners are not relying solely—or in some cases—very much at all on wages, it raises the fact in the medical and insurance communities that doctors are taking part in activities other than medical practices that involve patient care.

“This is why they need to consult with a malpractice insurance expert to make sure that any activities they are doing are either covered by malpractice insurance, or seek out advice on how to get coverage for those outside activities,” he added.

For more information, contact Matt Gracey at (800) 966-2120 or visit