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As physicians, we are accustomed to deciphering complex medical cases, but the task can be just as intricate when it comes to understanding our compensation. As physicians eagerly search for insights into their earnings with the release of the latest MGMA DataDive, it’s essential to exercise caution. While statistics can be a powerful tool for shedding light on compensation trends, they can also lead to confusion and misinterpretation. It’s worth noting that many physicians may need direct access to this comprehensive data, leading them to rely on less accurate sources like Doximity, Medscape, or other surveys that may not be considered the ‘gold standard’ in understanding physician compensation. This article aims to explain another statistical paradox known as Ecological Fallacy.

Simpson’s Paradox sparked curiosity in my previous blog about physicians’ compensation. Yet, the intrigue doesn’t end there. While powerful in shedding light on earnings, statistics can also cast a veil of confusion, especially when navigating the complexities of physician compensation data.

Simpson’s Paradox is a statistical phenomenon where an association between two variables emerges, disappears, or reverses when the group is divided into subgroups. Understanding Simpson’s Paradox is vital for drawing the best conclusions from statistical data such as the newest MGMA DataDive.

Simpson’s Paradox is not a paradox but a way of presenting inconsistent yet plausible conclusions. In a sense, Simpson’s paradox results from a conflation between causal and probabilistic reasoning.

An example is if my compensation is consistently less than that of one of my colleagues in another location, I should ask for a raise. But our locations and situations may be different and not comparable.

Ecological Fallacy acts as a Cousin to Simpson’s Paradox

Ecological fallacy is another logical error in statistics that is a cousin to Simpson’s Paradox. It occurs when the characteristics of a group are attributed to an individual. It is also an error in reasoning. Many physicians looking at compensation data fall prey to ecological fallacies. Simply put, if other physicians like them are making more money, they need a raise!

If one physician’s salary is consistently less than a colleague’s, then it is natural to think that the characteristics of these physicians are comparable. Ecological fallacies occur because of the assumption that what is true for one type of physician is true for a population of like physicians. The dilemma is that different physicians have different characteristics, even if they practice in the same specialty or location. In other words, the story matters to each physician.

The word ecological in this context refers to a group of physicians such as cardiologists. Ecological fallacies are more straightforward to understand than Simpson’s Paradox. We cannot conclude the data collected about all cardiologists, for example, at the group level. Even though cardiologists are highly compensated, as a rule, it does not automatically mean that every cardiologist will garner similar compensation.

Another way of looking at physician compensation and the ecological fallacy is that groups of physicians are not homogeneous. In reality, individual physicians may or may not share characteristics with the group of cardiologists, especially in different locales. Some physicians may perform specialized procedures such as mitraclips and tavrs, while others don’t.

As an example, a cardiologist who is on the faculty at UCLA may command a high salary because of high patient volume and performing specialized procedures. A similarly well-trained cardiologist who lives in rural Nebraska and works at an independent private practice may be compensated less. The trade-offs come down to lifestyle, location, and personal reasons. The ecological fallacy may be that the rural Nebraska doctor feels his compensation should be commensurate with the UCLA doctor, which is untrue.

MGMA DataDive is Subject to Ecological Fallacy

By definition, MGMA DataDive uses group-level or aggregate-level data to establish whether there is a potential relationship between sets of two variables. An example is comparing cardiologists’ compensation in different states or regions. In statistical terms, all physician compensation surveys are observational and known as ecological studies. It is not possible to consider these surveys to be individually based comparisons.

The critical point is that while physicians and employers hope to conclude individual physicians using data such as those provided by MGMA, the data is still group data. Conclusions, correct or not, can be drawn about an area or state but not at an individual level. That is why physicians often need clarification on the apparent disparities between themselves and larger groups of physicians who reported their compensation levels.

Root Causes of Ecological Fallacy

When looking at physician compensation data, misinterpreting statistical information is the root cause of ecological fallacies. The goal of obtaining physician compensation data is to generalize from the sample of physicians to the population, not vice versa. Think of it like writing up a patient summary at the end of an office note–some patient details may be skimmed over or lost.

Let’s continue to pick on cardiologists. Is there a correlation if physician compensation data reveal a correlation between performing many echocardiograms and stress tests and higher base pay? Does it mean that all cardiologists who perform voluminous numbers of echocardiograms and stress tests will have the highest salary? No.

While the data indicates some insights about the more productive and highly compensated cardiologists, it does not establish causality. The data is aggregated. Cardiologists may perform many echocardiograms and stress tests as a population, but it may not be observed individually. Some cardiologists may do other procedures or see more patients.

Correlations seem larger when an association is assessed at the group level. The correlation may even disappear when evaluated at the individual level.

What actions can be taken?

  • Clearly define the unit of analysis.
    • Before looking at physician compensation data, consider what is being analyzed.
    • An example is when physicians are compared by location, performance, or market demand.
    • Contract Diagnostics can offer physicians the insights they need to determine if the data refers to a group or an individual.
  • Don’t fall prey to logical leaps.
    • Physicians doing their own research and consuming physician compensation data can be confusing. It is easy to fall into traps in logic.
    • Think: Is this claim at the same level as the data? Or is this an ecological fallacy because it applies to all physicians in the population studied, not me?
  • Results from group-level data cannot be applied to individuals: This is where the rubber meets the road.
    • The only way to relate to physician compensation data is to investigate individuals or subpopulations within larger groups of physicians.
    • Statistically, this means seeking suitable sampling methods such as stratified sampling.
    • The physician compensation experts at Contract Diagnostics can provide those resources.


Navigating physician compensation data requires a thoughtful approach to avoid Ecological Fallacy and draw accurate conclusions. Physicians, at any stage of their career, can rely on Contract Diagnostics to help interpret data, understand their relative value, and negotiate compensation that aligns with their unique circumstances. Remember, your story matters much like what this physician told us was the best investment he had ever made. Contract Diagnostics is here to help you make informed decisions regarding your compensation and benefits.

Are you ready for a compensation checkup specially designed for physicians? Schedule a free 15-minute compensation review call with our experts at Contract Diagnostics today!

About the Author

Dr. Drew Sutton, MD, has walked the long road of a successful medical career, amassing invaluable insights and expertise. With a wealth of knowledge derived from his time in the trenches, he understands the myriad challenges and opportunities that come with physician contracts and compensation. Dr. Sutton is not just sharing theoretical knowledge; he imparts lessons learned from his own hands-on experience in the medical profession. Dr. Sutton has been where you are, and he’s navigated the path to where you want to be.

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