A Look at Physician Compensation
A Look at Physician Compensation | Medical Group Management Association, MGMA, MGMA 2011 Physician Compensation and Production Survey, Harold Ingram, MGMA of Mississippi, Jeffrey B. Milburn, MGMA Health Care Consulting Group, MGMA 2011 Academic Practice Compensation and Production Survey for Faculty and Management, Jonathan Tamir, Yale University School of Medicine, MGMA Survey Operations Committee, Merritt Hawkins, Accenture Health,  2011 Review of Physician Recruiting Incentives, Travis Singleton, MGMA 2011 Medical Directorship and On-Call Compensation Survey, Lynne Jeter.

MGMA Annual Survey, Supplemental Reports, Highlight Regional, Specialty Trends

Physicians practicing medicine in the South earn more money than their counterparts in other regions of the country, according to Medical Group Management Association (MGMA) 2011 Physician Compensation and Production Survey.

Last year, the median annual compensation for primary care doctors in the South was nearly $220,000, and specialists topped $400,000. Perhaps surprisingly, the lowest median compensation for primary and specialty care physicians—$194,409 and $305,575, respectively—was reported in the eastern region of the country.

Why such a disparity between doctors’ earning power in the South versus the rest of the nation? Harold Ingram, immediate past president of MGMA of Mississippi, said it may simply be because “many physicians prefer other parts of the country and need extra incentive to move south.”

Location desirability is definitely a factor influencing competition and compensation, noted Jeffrey B. Milburn of the MGMA Health Care Consulting Group.

“Some areas have a much higher ratio of physicians to population, and one might think this would lead to increased competition and lower compensation,” he said. “But the usual laws of supply and demand aren't always at work in healthcare.”

The 25th consecutive annual report reflects data from nearly 60,000 providers representing more than 150 specialties, the largest provider population of any physician compensation survey in the United States. Referring to a “mixed movement in compensation in 2010,” MGMA pointed out national earning highlights for specialties in the 2011 report:

  • Internists reported the highest gains in compensation; radiologists reported the least.
  • Physicians in internal medicine earned $205,379 in median compensation, an increase of nearly 5 percent since 2009.
  • Radiologists earned a median compensation of $471,253, signaling a decrease of nearly 2 percent.
  • Orthopedic surgeons had the highest median compensation in 2010 at $514,650, representing a 3.7 percent increase from the previous year.
  • Neurologists reported the largest overall increase in compensation—5 percent—from the previous year to $249,867.
  • Family practitioners (without obstetrics) reported median compensation of $189,402.
  • Pediatric/adolescent medicine physicians earned $192,148 in median compensation, an increase of less than 1 percent since 2009.
  • Psychiatrists, dermatologists, neurologists and general surgeons were among specialists who reported an increase in median compensation since 2009.
  • Anesthesiologists reported decreased compensation, as did gastroenterologists.

“A number of factors may attribute to regional differences in physician compensation,” said Milburn. “The supply and demand for primary care or specialty physicians may influence compensation. A high level of competition between groups or specific specialties may provide an opportunity for payers to reduce reimbursement. In states where payers have little competition, reimbursement and subsequent physician compensation may be lower.”


Factoring in Academia

According to the MGMA 2011 Academic Practice Compensation and Production Survey for Faculty and Management, some physicians in academic practices have looked seriously at generational trends, in which cutting the availability of primary care doctors in the healthcare marketplace may be bumping up their pay levels. Young, rising physicians are demanding more life balance and therefore fewer work hours and limited on-call availability. At the same time, physicians in the baby boomer era are slowing down and seeking part-time employment. Add to the shortage of academic primary care providers (PCPs) that leads to a higher price: PCPs typically earn less than their peers in other specialties, and academic practice usually pays less than private practice.

As a result, median compensation increased in academic settings for primary care faculty by 3.47 percent, pediatric faculty by 2.21 percent, and internal medicine primary care faculty by 6.84 percent. Other academic-based providers to experience compensation increases: pulmonary medicine physicians (7.38 percent) and non-invasive cardiologists' salaries (6.7 percent).

Specifically, median compensation for PCPs in academic practice was $163,704, compared with $241,959 for specialists. Compensation packages for doctors in academic practices remains lower than those of their peers in private practice because faculty physicians divide their time among clinical activities, research and teaching responsibilities. The latter two duties aren’t compensated as highly as clinical work, pointed out Jonathan Tamir, associate chairman of finance and administration for the Yale University School of Medicine Department of Internal Medicine.

“Recently, higher salaries have been required to hire internal medicine faculty,” said Tamir, a member of the MGMA Survey Operations Committee. MGMA’s academic practice compensation survey report reflects data on 18,776 faculty physicians and non-physician providers and 1,993 practice managers. “It’s the law of supply and demand. More applicants are interested in part-time appointments or reduced on-call roles. The demand for more highly paid hospitalists is increasing, further reducing the applicant pool, and senior physicians are retiring earlier than in the past. The bottom line is that that there aren't enough internal medicine applicants available.”


Recruitment Trends

Supplementing the MGMA annual report, a recent Merritt Hawkins & Associates survey revealed that 56 percent of physician job openings are hospital-related. Accenture Health reported that physicians will shift employment from private practice to large health systems, estimating that only one in three physicians will be in private practice by 2013.

A disturbing employment trend that has hindered recruitment and compensation movement: the Merritt Hawkins survey showed that physicians are compensated for patient volume and not quality. In general, 74 percent of recruited jobs offer performance bonuses. Despite national initiatives to reward for quality of care, 90 percent of those recruited jobs are linked to “fee-for-service style volume,” according to the Merritt Hawkins 2011 Review of Physician Recruiting Incentives. Only 7 percent of jobs include bonuses for quality or cost reduction objectives.

Performance aside, American Medical News reports that three of four recruited jobs offer an average signing bonus of $23,790, up from the previous year’s $22,915. Loan forgiveness (12 percent) and housing allowance (6 percent) reflected other effective recruitment incentives. 

“Signing bonuses have gone from a carrot at the end of the stick to an expected part of the package,” said Travis Singleton, senior vice president for Merritt Hawkins. “It's an extreme negative these days if you don't have a signing bonus.”


Directing Traffic

Compensation for medical directors varied widely across specialties and among hospital-owned versus non-hospital owned practices, according to MGMA’s 2011 Medical Directorship and On-Call Compensation Survey. The survey of 1,529 directorships representing 255 medical organizations revealed that the majority of participants reported median annual compensation levels of roughly $50,000 or less. Levels dipped as low as $7,500 for internists and pediatricians.

Directorship compensation varied by practice specialty and ownership, with radiologists and neurologists reporting greater annual compensation in non hospital-owned-practices, while family practitioners with and without obstetrics reported greater compensation in hospital-owned practices.

General surgeons in hospital-owned practices earned a median annual compensation of $26,972 for directorship duties, while general surgeons in non hospital-owned settings earned $29,904 annually. These figures represent a much smaller compensation difference between ownership type compared with the previous year’s data, which reported annual directorship compensations of $25,000 and $40,000, respectively.

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