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Physician Compensation

By June 11, 2010Commentary

The Medical Group Management Association takes a regular look at trends in physician compensation by conducting a survey, the most recent of which is reported in an MGMA press release and is discussed in a story on the New England Journal of Medicine website.  (NEJM Article) (MGMA Release) Overall the data show that the gap between primary care and specialist compensation is narrowing and that hospitals are becoming the major source of employment for many new physicians and established doctors looking to make a change.  Almost 65% of current doctors who changed jobs went to a hospital and half of the new physicians did so.

For those going into single specialty practices, primary care physicians reported median guaranteed first year compensation of $160,000 in 2009 versus $230,000 for specialists.  Since 2006 that number has decreased 2% for specialists and increased 17% for primary care.  Similarly in multispecialty practices, primary care pay increased 14% and specialists’ only 3%.  In all settings the median primary care compensation was $150,000 in 2008 and $275,000 for specialists.  Those were increases of around 10%.  Primary care compensation reflects strong demand for those doctors, while many specialties face pressure over excessive utilization issues, resulting in reduced demand and pay.

Hospitals have become attractive employers because in the last couple of years they have begun to pay as much or more than other practice types, which is a reversal.  They also are perceived as offering stability in an uncertain environment and having an ability to provide capital for things like health information systems.  The bad news for those who pay for health care is that a series of studies has shown that hospital pricing is primarily responsible for overall health cost increases.  The accumulation of medical resources only increases these institutions’ leverage and likely means even higher price increases ahead.  It also is notable that physician salaries and compensation are much higher than most of the public realizes, and those levels of compensation are responsible for much of the gap in spending in the United States versus other countries.

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