Family physician compensation stayed level in 2016
The average annual compensation for family physicians remained stable last year as a majority expressed contentment with their pay and the state of medicine.
The Medscape Physician Compensation Report 2017 shows that family physicians responding to the survey received an average of $209,000 in total compensation in 2016, up almost 1 percent from the previous year but remaining second to the last among all specialties. The average compensation for all physicians included in the survey rose more than 5 percent to $294,000, with the highest average compensation achieved once again by orthopedists at $489,000. The lowest-paid specialty was pediatrics with an average of $202,000, which represented a decrease in compensation.
When broken down by state, data showed that the three top-earning states for physicians were North Dakota ($361,000 average), Alaska ($359,000), and South Dakota ($354,000). Researchers attributed this at least partly to government efforts to bring more physicians to rural and economically disadvantaged areas.
Fifty-three percent of family physicians said they felt their compensation amount was fair, about even with the 54 percent of all survey respondents who said the same. By comparison, 52 percent of family physicians believed they were fairly compensated in 2015. Emergency medicine physicians (at 68 percent) felt the most satisfaction with their compensation in the new survey, while nephrologists (at 41 percent) were the least satisfied.
Among family physicians, 77 percent said they would choose medicine as a career if they had the choice again, in line with the overall average. But family physicians were second from the last (at 67 percent) when asked if they would choose the same specialty. Internists were last at 64 percent.
Although the survey did not disclose physician employment trends as it has in past years, it did note that self-employed physicians, on average, tend to make more than their employed colleagues ($343,000 vs. $269,000). The difference varies widely between specialties, with self-employed primary care physicians earning $223,000 and employed primary care physicians earning $214,000, a 4-percent difference.
The gender pay gap continued to shrink for primary care physicians, albeit slowly. Male physicians in primary care reported earning 16 percent more than female physicians, down from 17 percent the previous year. The gap actually widened among other specialists, where male physicians made 37 percent more then female physicians, a 4 percent increase over the previous year. Researchers said this may be because of fewer female physicians participating in some high-paying specialties.
Gender-based pay disparities are smallest at 18 percent for physicians younger than 35 years old; the pay difference is 35 percent or more for older age groups.
The pool of physicians operating in a cash-only or “concierge” practice actually diminished slightly, with 9 percent of respondents saying they belonged to those types of practices. Ten percent reported operating those types of practices in 2015.
Compensation for family physicians rises in new survey
Family physicians saw their average overall compensation increase last year, and they felt slightly less anxious about their pay and their profession, according to a new report.
The Medscape Physician Compensation Report 2016, released April 1, reported that family physicians made an average of $207,000 in total compensation in 2015, up 6 percent from the previous year. Most specialties saw gains in annual compensation, with the highest-paid physicians being orthopedists with an average of $443,000. The lowest-paid specialty was pediatrics with an average of $204,000.
In addition to receiving higher pay, 52 percent of all physicians (and 52 percent of family physicians) said they believed their compensation was fair. By comparison, half of all physicians and 48 percent of family physicians felt they were fairly compensated in 2014. Dermatologists (66 percent) felt the most comfort with their compensation, while urologists (42 percent) were the least satisfied. Among family physicians, 73 percent said they would still choose medicine as a career if they had to do it all over again, which is up from 69 percent five years ago. The percentage of family physicians who would stick with the specialty, however, has fallen from 44 percent in 2011 to 29 percent now.
The trend of physicians choosing to work for hospitals and other large health care groups appeared to remain steady with 35 percent of men and 23 percent of women sticking with private practice, virtually the same percentages as a year ago.
Male and female compensation continued to have a disparity, but it is shrinking. Male family physicians made an average of $220,000 versus $183,000 for female family physicians, a difference of 20 percent. The difference was 28 percent in 2011. Also, survey results showed that female physicians faced a similarly sized pay gap regardless of whether they were employed or self-employed.
Despite the continued focus on “direct primary,” “concierge,” or “direct pay” care models, those types of practices remain very much in the minority. Only 10 percent of family physicians reported being in a concierge or cash-only practice, the same amounts as in 2014. The researchers said it appeared private practice physicians looking to get away from the regulatory and financial headaches of traditional practice are more likely to go into employed positions rather than go the direct-pay route.
The survey also said 39 percent of family physicians were in an accountable care organization (ACO) and 7 percent planned to join one in the coming year. By comparison, 35 percent belonged to one in 2014 and 8 percent planned to join one.
Does physician compensation differ in an accountable care organization?
A new study published in the Annals of Family Medicine suggests that family physicians in accountable care organizations (ACOs) may not be paid that much differently than their counterparts in non-ACO practices. The study also raises questions about the ability of ACOs to affect cost and quality if physician payment incentives are not aligned with those of the ACO.
The study in question used data from a national survey of physician practices to compare primary care physicians’ compensation among three types of practices:
• practices not participating in a Medicare ACO and with no substantial risk for primary care costs
• practices not participating in an ACO but with substantial risk for primary care costs
• practices participating in an ACO regardless of their risk for primary care costs.
Researchers measured physicians’ compensation based on salary, productivity, clinical quality or patient experience, and other factors. They then used regression models to estimate physician compensation as a function of ACO participation and risk for primary care costs while controlling for other practice characteristics. Among the findings:
• Physicians in ACOs and non-ACO practices with no substantial risk for costs were compensated similarly; on average, they received nearly one-half of their compensation from salary, slightly less from productivity, and about 5 percent from quality and other factors.
• Physicians not in ACOs but with
substantial risk for primary care costs received
two-thirds of their compensation from salary, nearly one-third from
and slightly more than 1 percent from quality and other
• Participation in ACOs was associated with significantly higher physician compensation for quality; however, ACO participation was not significantly associated with compensation from salary, whereas financial risk was associated with much greater compensation from salary.
The authors concluded that although practices in ACOs provide higher compensation for quality, compared with practices at large, they provide a similar mix of compensation based on productivity and salary. The authors also concluded that incentives for ACOs may not be strong enough to encourage practices to change physician compensation policies for better patient experience, improved population health, and lower per capita costs.
As the study authors themselves ask, if physicians in ACOs and physicians outside ACOs are paid similarly, will they practice differently? The corollary question would seem to be, if they don’t, will ACOs still be able to deliver the lower cost and better quality that they otherwise promise? Only time and additional research will likely tell.
– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians
Primary care pay rises faster than that of specialists
Compensation for primary care physicians outpaced that of specialists last year, although the median for primary care physicians remains far less.
The Medical Group Management Association (MGMA) released its annual Provider Compensation and Production Survey Report this week, comparing information gathered from almost 70,000 physicians and other providers.
Primary care physicians received a median compensation of $241,273 in 2014, a 3.6 percent gain from the previous year, according to the report. By comparison, the median compensation for specialists rose 2.4 percent to $411,852. MGMA defines compensation as salary, bonuses, incentive payments, research stipends, honoraria, and profit sharing. It does not include retirement or health care benefits, automobile allowances, or expense reimbursements.
The median compensation for a family physician who performed obstetrics was $227,883; without obstetrics, the median was $221,418.
Halee Fischer-Wright, MD, the president and CEO of MGMA, said in a release that the study confirmed that compensation models have begun shifting from being purely based on productivity to ones that incorporate value.
“We hope to see physicians’ salaries remain healthy throughout this transition,” Fischer-Wright said.
Survey shows rise in solo practice physician searches
The number of solo practices looking for new physicians or advanced practitioners rose last year, one of the largest physician recruiters says.
Physician search firm Merritt Hawkins in its annual review says 4 percent of the 3,120 search assignments conducted by itself and affiliated firms between April 1, 2014, and March 31, 2015, were for solo practices. This represents a sizable increase from the year before when solo practice assignments made up less than 1 percent of the company’s workload.
Physician-owned medical groups also made strides, making up 20 percent of search assignments, compared with 13 percent the year before, while those from hospitals fell from 64 percent to 51 percent. But the trend is still clearly with employed practice. Merritt Hawkins said 95 percent of its assignments during the review period were for employed positions, compared with less than half in 2004. Assignments from community health centers and academic positions also increased.
Family physicians continued to be the most frequent search assignment for the ninth year in a row, followed closely by internal medicine, psychiatrists, hospitalists, and nurse practitioners. The firm noted that advanced practitioners, a category combining nurse practitioners and physician assistants, would have been fourth on the list, up from fifth last year. Four years ago, neither made Merritt Hawkins’ top 20 assignments, either together or separately.
“Concierge” and other practice models where patients pay their physician directly for care without going through third-party payers, while gathering increasing attention from physicians, remained a tiny piece of the assignment mosaic. The company said it fielded only 25 assignments for concierge practices during the review period, down from 32 in the previous year.
After hitting a five-year high last year, the average base salary for family physician assignments during the study period fell slightly, declining from $199,000 to $198,000.
While policymakers have increasingly discussed the switch of reimbursement from fee-for-service to models based on quality and value, Merritt Hawkins said only 23 percent of its assignments included bonuses tied to quality metrics, down from 24 percent during the previous year. Fifty-seven percent of assignments still relied on relative value units (RVUs) for measuring physician productivity.
Feds warn about potentially illegal medical director compensation
Federal investigators are warning physicians who serve as medical directors to make sure their compensation agreements aren't violating anti-kickback regulations.
The Department of Health and Human Services' Office of Inspector General (OIG) this week said it recently reached settlements with a dozen physicians across the country who had served as medical directors for various health care organizations. The agency said it determined those physicians' directorship compensation agreements were improper because they were tied to the individual physicians' volume or value of referrals and didn't reflect fair market value of the services they rendered – if they provided any services at all.
In some cases, the physicians also entered agreements that led to an affiliated hospital, health group, or other entity paying the salaries of the physician's office staff. While not paying the physician directly, these arrangements reduced the physicians' actual business expenses, so the inspectors claimed this compensation improper.
The OIG reminded physicians that a compensation arrangement is potentially illegal if any part of it compensates the physician for past or future referrals of federal health care program business. For more information, see "OIG compliance program guidance for individual and small group physician practices" and "A roadmap for new physicians: avoiding Medicare and Medicaid fraud and abuse."
Physician compensation rises but so do frustrations
Most primary care and other medical specialties saw a modest gain in overall compensation last year, although many physicians are still unhappy with the state of medicine.
More than 19,000 physicians in 25 specialties were surveyed for the Medscape Physician Compensation Report for 2015 released this week. It showed that the average compensation for primary care physicians held steady at $195,000 in 2014 while other specialties reported an average of $284,000. Family medicine led the gains for primary care, increasing 10 percent over 2013 to $195,000. Internal medicine and pediatrics each gained 4 percent to $196,000 and $189,000, respectively.
While the pay is up, only 47 percent of primary care physicians and 48 percent of family physicians said they felt they were fairly compensated, compared with half of specialists. Also, while almost three-fourths of family physicians surveyed said they would again choose medicine as a career if they had it to do over, less than a third said they would stick with family medicine.
The trend of physicians choosing to work for hospitals and other large health care groups continued with 63 percent of survey responders saying they were employed while 32 percent said they remained in private practice. Employed primary care doctors appeared to be trading some compensation for the security and fewer regulatory headaches of employment as they made an average of $189,000 versus the $212,000 earned by self-employed physicians.
The wage gap between male and female physicians appears to be shrinking, albeit slowly. Male physicians made an average of $284,000, or 24 percent more than female physicians ($215,000). The difference was 28 percent when Medscape measured in 2011. The researchers suggested much of the difference in compensation levels comes from female physicians typically working fewer hours and weeks and tending to go into lower-paying specialties such as obstetrics/gynecology or pediatrics.
There has been a lot of focus on physicians moving to alternative practice styles, but real-world results are mixed. Just 3 percent of surveyed physicians said they were in a concierge practice, which typically charges an annual retainer, and 5 percent said they were in a cash-only practice, down from 6 percent in 2013. Thirty-seven percent said they were participating in or planning to participate in an accountable care organization (ACO), which can reward physicians and allied health care groups for lowering costs and improving care.
Primary care physicians are apparently more open to these new practice models with 4 percent in concierge practices, 5 percent in cash-only practices, and 43 percent in or planning to join an ACO.
To learn more about some of these subjects, visit the following FPM topic collections:
Forewarned is forearmed: Using comparable compensation data in employment contract negotiations
For many employed physicians (and there are an increasing number of you), the annual rite of contract negotiations with payers has given way to the annual rite of contract negotiations with employers. One of the key elements in those negotiations is compensation.
The driving concern will be whether you are being compensated fairly, and solving that riddle means knowing whether the compensation you’re being offered is comparable to that of physicians in your region with similar skills and experience.
But, where can you find that information? One option is national medical specialty societies. For instance, the American Academy of Family Physicians has data on individual income (before taxes) of family physicians segmented by employment status, primary employer, practice size, number of years since residency, region, and primary location (i.e., metropolitan versus non-metropolitan).
Another option is data published by trade groups such as the Medical Group Management Association (MGMA) and recruiting firms like Merritt-Hawkins. Those data have their limitations, but to the extent that physicians’ employers are consulting them already, it is often useful for physicians to be aware of them too.
Knowing what other physicians in similar circumstances are earning is no guarantee that you will earn the same. However, as Kofi Annan, former secretary-general of the United Nations once observed, “Knowledge is power. Information is liberating.”
– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians
Physician recruiter sees continued plunge in private practive
One of the largest physician recruiters in the country says the market for private practice, at least among its clients, is drying up quickly.
According to an annual review by physician search firm Merritt Hawkins, less than one in 10 of the company's 3,158 search assignments between April 1, 2013, and March 31, 2014, were for independent practice settings, such as partnerships, solo offices, or concierge/direct pay practices.
The vast majority of assignments were for employed positions, with 64 percent going to hospitals and the remainder serving large groups, community health centers, or academic facilities.
By comparison, independent practice situations made up more than 45 percent of Merritt Hawkins' search assignments in 2004.
Researchers said the mounting economic and regulatory pressures of the Affordable Care Act and other changes in the health care landscape continue to fuel the shift of physicians, who typically view employed positions as more financially stable and free of the burdens of running their own practices.
Overall, there were 714 searches for family medicine, making it the most requested recruiting assignment for the company for the eighth year in a row. The next most-popular search was for internal medicine, with 235 assignments.
The average base salary for family medicine assignments during the study period was $199,000, the highest average in the last five years. That average salary is a little higher than the $190,907 found in a recent study of AAFP members.
"Concierge" and other practice models where patients directly pay the physician a retainer or other regular fee for increased access has also grown. Merritt Hawkins said it completed 32 searches during the past year for these positions – only 1 percent of total searches but an increase from 10 searches two years ago.
The ongoing shift of medical reimbursement from models based on volume to those based on quality and value has been difficult for health care organizations, and it shows in the incentives used to attract physicians. Researchers said only 24 percent of the company's recruiting assignments included production bonuses based at least partly on quality and value, a decrease from 39 percent of assignments during the previous year.
Production bonuses based on Relative Value Units (i.e., the work units performed by a physician) are still the most common. Fifty-nine percent of assignments included that type of bonus versus 57 percent last year.
Average family physician income up, but not equally
Family physician income, on average, has risen, but a new study indicates a greater number of family physicians are finding themselves on the low end of pay.
The 2013 Practice Profile Survey, a proprietary report issued in May, polled almost 500 American Academy of Family Physician (AAFP) members and found the average individual income in 2012 equalled $190,907. That's the highest average since the AAFP began surveying its members more than 30 years ago. However, the report noted that the median income was $170,000. A third of respondents said they earned $120,000 or less; a quarter of respondents said they earned more than $210,000.
"This suggests that the income levels among physicians are separating," the researchers wrote. "The separation is supported when the responses are categorized by income, as the percentage of respondents in the lowest category (earning $120,000 or less) was higher yet the mean income earned continued to grow."
When adjusted for inflation, the 2012 average still rises above previous years, but the median is similar.
Other survey findings include the following:
• Respondents said they worked an average of 48.3 hours a week in 2013, a decrease from 51.7 hours in 2012. Of that, they spent 34.1 hours in direct, face-to-face patient care, which was actually an increase from the previous year but similar to 2010 levels. The average amount of time spent on non-patient-care duties was down in 2013, falling to 2.6 hours per week, compared with 4.4 hours in 2012 and 4.8 hours in 2010.
• Sixty-eight percent of respondents said they were familiar with accountable care organizations (ACOs) and 28 percent said their practice was engaged in an ACO initiative. These are both increases over previous years as the ACO model continues to grow.
• Forty-two percent said they were familiar with the direct primary care (DPC) model. But only 2 percent of physicians said they currently worked in a DPC practice and 1 percent said they were transitioning to the DPC model.
• Twenty-six percent of respondents said their practice was recognized as a patient-centered medical home (PCMH), up from 24 percent the previous year. Nine percent said their practice had completed the transition and had applied for PCMH recognition. There was a slight decline in the percentage of physicians saying their practices received care management fees (44 percent), enhanced fee for service (37 percent), or shared savings amounts (13 percent) because of their inclusion in a PCMH. However, the percentage saying they received pay-for-performance amounts increased from 33 percent to 44 percent last year. Overall, 97 percent of respondents in a PCMH said their practice planned to reapply for PCMH recognition when the time came.
Family physician compensation continues to disappoint
The income disparity for family medicine is taking a toll, according to a new survey.
In the Medscape Compensation Report for 2013, released earlier this week, physicians were asked if they still would have pursued a medical career if they had to do it all over again. Sixty-seven percent of family physicians surveyed said they would have but only 32 percent said they would have stuck with family medicine. By comparison, 58 percent of all physicians surveyed said they would still have gone into medicine with 47 percent sticking with their current specialty.
Other parts of the report reveal hints of what might be causing so many family physicians to wish they had a time machine.
For example, family physicians reported an average compensation of $176,000 last year, the second-lowest among the 25 specialties surveyed. Family medicine beat out only HIV/infectious disease physicians, who made an average of $174,000. The most lucrative specialties last year were orthopedics and cardiology, with average compensation of $413,000 and $351,000, respectively.
Only half of family physicians said they felt fairly compensated, which placed the specialty in about the middle of the pack. Dermatologists seemed to be the happiest with 65 percent expressing overall career satisfaction.
Forty-two percent of family physicians said they spent 40 hours or more each week serving patients while more than two-thirds said they saw 76 patients or more each week. Sixteen percent said they saw 125 patients or more each week.
In terms of family medicine practice environments, the researchers found the highest average compensation among those working in hospitals ($191,000), health care organizations ($190,000) and office-based multispecialty group practices ($187,000). The lowest average belonged to office-based solo physicians ($158,000).
Also, 29 percent of family physicians said they belonged to an accountable care organization (ACO) last year and another 11 percent said they plan to join within a year. By comparison, only 5 percent belonged to an ACO in 2011.
Lies, damned lies, and statistics
Mark Twain famously said, "There are three kinds of lies: lies, damned lies, and statistics."
I was reminded of the phrase recently when researching how the employers of some family physicians are using data from the Medical Group Management Association's (MGMA's) annual Physician Compensation and Production Survey to create compensation systems that disadvantage family physicians relative to their peers in internal medicine. MGMA's data show that the median compensation per work relative value unit (RVU) for family physicians solely in ambulatory care (i.e., no inpatient care) is less than the corresponding figure for internal medicine.
In reviewing the survey data and speaking with MGMA staff members, I learned that, in MGMA's experience, the compensation per RVU data is the most misused and misinterpreted piece of information in the annual survey. Further, a summary of MGMA's 2012 report based on 2011 data highlights the disconnect between compensation and production (as measured in work RVUs) as the relationship between the two is not constant. The summary report shows that as family physician compensation increases from one quartile of productivity to another, compensation per RVU decreases, reflecting the fact that productivity (as measured by work RVUs) increases at a greater rate than total compensation across the quartiles.
The lower compensation per work RVU for family physicians compared to general internists may simply reflect that family physicians are more productive than their general internist colleagues, relative to their compensation. For example, the median work RVUs for family physicians in ambulatory care in the MGMA data tables were 5,468, while the median for general internists were only 5,233.
Or it could be due to a number of other reasons:
• Unlike Medicare, many private payers use multiple conversion factors that vary by, among other things, types of service. If general internists provide a mix of services with higher conversion factors than those provided by family physicians – more surgical or procedural services versus evaluation and management services, for example – that could result in a higher compensation per work RVU.
• The payer mix may also impact total compensation. For instance, if family physicians treat a higher percentage of Medicaid patients, their compensation may be lower even if they provide exactly the same services (and generate the same work RVUs) as general internists.
• Some medical groups are able to negotiate higher compensation rates from private payers than other groups; if general internists disproportionately belong to such groups, they may benefit from higher compensation, even if producing the same number of work RVUs as their family medicine colleagues with less bargaining clout.
To its credit, MGMA is clear that the information contained in its report "is presented solely for the purpose of informing readers of ranges of medical practice compensation, charges, and revenue reported by MGMA-ACMPE member and nonmember organizations." They are also explicit that the data "may not be used for the purpose of limiting competition, restraining trade, or reducing or stabilizing salary or benefit levels." Finally, MGMA notes that its "publications are distributed with the understanding that MGMA-ACMPE does not render any legal, accounting, or professional advice that may be construed as specifically applicable to individual situations."
In summary, MGMA is simply reporting what its survey respondents told it. The calculated compensation per work RVU is the result of multiple factors, and it is intended to be descriptive, not prescriptive. If an employer of family physicians is using the compensation per work RVU calculations to set compensation levels for family physicians less than other primary care physicians, it would appear to be a misuse and misinterpretation of the data.
Or as Mark Twain once put it, "Get your facts first, then you can distort them as you please."
– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians
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