Is physician compensation different than executive compensation?

I had dinner this weekend with a number of bankers from Goldman Sachs, this weekend in London. Inevitably conversation turned to the recession. The bankers quickly steered the conversation and their anger towards Obama's recent proposal to cap TARP recipient executive compensation

U.S. Plans $500,000 Cap on Executive Pay in Bailouts - NYTimes.com

The bankers argued that compensation is critical and paramount in recruiting and retaining top talent in banking and finance.

This got me thinking - is the same thing true with physician compensation? It can't be - or else we would be a nation of interventional cardiologists. Granted there's a supply restriction, but you see top quality students in supposedly easier professions such as family medicine, primary care and pediatrics. And we always hear about there's a rising trends of medical students gravitating towards professions high on the lifestyle-compensation matrix: "dermatology, radiology, anesthesiology". This JAMA paper brought a lot of attention to this trend.

You also get studies such as this one that show there is no association between PC residency choice and debt. The authors conclude that medical students make residency decisions on the basis of a complex set of factors.

So are physicians drawn to their specialty due to compensation, lifestyle, or some complex mix of factors? Is it specialty specific - i.e. dermatologists are all very similar in their desire for high compensation, high lifestyle?

For better or worse, in classic consulting style, some colleagues of mine did a conjoint analysis to determine what are the archetypes of physicians. We found through our interviews of over hundreds of physicians that there are broadly six types of physicians. Take with a grain of salt, but this is one classification set:

Financially oriented physicians
Wealth maximizers: Seek ways to increase pay even if it involves risk, least interested in non-financial rewards
Financial security guards: Value security, less reward from pure act of patient care, highly risk averse
Industrious clinicians:Value rewards of hard work, committed to medicine, appreciate respect and admiration

Non-financially oriented
Caring healers: dedicated to patient care, public health, and teaching, least value on money
Academic clinicians: Teaching and contributing to science most important, less concerned with hours or income
Lifestyle conscious: Most likely to cut back hours, less reward from patient care or academic pursuits

Each physician has a different set of values, and will be drawn to work to an institution that can best fit his or her values. By understanding your hospital's goals, you can determine what is the mix of physicians that you want to hire and what you can offer to attract the right talent.

How does this get back to executive compensation? The bankers may be right - perhaps all banking executives are "wealth maximizers". However, my gut tells me that there must be other archetypes - ones who enjoy applying intellectual rigor to solving business challenges, those who enjoy the entreprenurial nature of building a business, those who enjoy being a caretaker for a large brand and its employees... and each of these archetypes is driven by something more than just money.

The compensation argument just seems to shallow. Perhaps it is true - that is the best way to recruit and retain talent in the finance and banking sector - but somehow that would just be unfortunate on many levels. I think the industry just needs to do a bit more self reflection to find out what are the drivers of happiness amongst executives, and tailor compensation accordingly.