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Earnings Survey: More hours, more patients, no raise?

Article

Income growth for most primary care physicians still lags behind inflation.

 

EARNINGS SURVEY

More hours, more patients, no raise?

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Choose article section...How much did you make in 2001?The five-year pictureIncome is highest down SouthHow multispecialty group size

Income growth for most primary care physicians still lags behind inflation.

By Robert Lowes
Senior Editor

What do you have to show financially for those extra hours you're logging, those extra patients you're seeing?

Not much, according to the latest survey of physician compensation by the Medical Group Management Association. Internists, FPs who don't deliver babies, and pediatricians boosted gross charges (before insurance discounts and other adjustments) by 11 percent in 2001, but took home only 1.2 percent more in compensation. Blame it mostly on declining reimbursement from insurers.

Paltry gains for primary care trailed a 1.6 percent hike in the Consumer Price Index for 2001. For primary care doctors, it's the second year in a row that earnings have lost ground to inflation, according to the MGMA survey, which Medical Economics is introducing as its new X-ray of physician finances (see "Memo from the Managing Editor").

Not every doctor has experienced an erosion in buying power, though. Specialists earned 2.6 percent more based on a 5.2 percent increase in charges. Among the leaders were invasive cardiologists, who enjoyed an 11 percent gain in income in 2001. And noninvasive cardiologists couldn't complain about their 6.7 percent improvement. The graying of America is one reason why income for invasive cardiologists is rising sharply, says H. Christopher Zaenger, a consultant in Barrington, IL, and president of the National Association of Healthcare Consultants.

Invasive cardiologists are making the most of this bumper crop in patients. "More and more, they're establishing their own catheterization and nuclear testing labs, so they don't have to send patients elsewhere for these services," says Dale Rothenberg, a consultant with Doctors Management in Knoxville, TN. "That translates into higher income."

Physicians in the South led the compensation derby in 2001, and Dan Stech, MGMA director of survey operations, chalks that up to the managed care factor—there's less of it below the Mason-Dixon line. According to InterStudy, a managed care research organization in St. Paul, MN, HMO enrollment in the South as a percentage of population stood at 19.8 percent in 2001, trailing all other regions (as defined by the MGMA).

Capitation is truly a threat to physician income. For instance, internists who depended on capitation for more than half of their income made $17,000 less than those who were capitation-free, according to the MGMA. For pediatricians, the gulf widened to $42,000.

As has been the case for years, male physicians generally received bigger paychecks than their female counterparts. Male general surgeons, for example, earned 30 percent more then female general surgeons. The gender gap narrows, however, in family practice, internal medicine, pediatrics, and ob/gyn, where women are on track to outnumber men.

Doctors in single-specialty groups typically outearned those in multispecialty groups (the MGMA survey doesn't look at soloists). Orthopedic surgeons who practiced with other orthopedic surgeons pocketed $43,000 more than their colleagues in mixed groups. "Specialists make less in multispecialty groups because they subsidize primary care doctors," notes Stech.

Among multispecialty groups, the size of a group influenced the size of a paycheck. More often than not, compensation for doctors in our selected specialties was highest in groups with 51 to 75 doctors.

If most doctors were disappointed by income growth in 2001, they should brace themselves for worse numbers in 2002, due mostly to a 5.4 percent reduction in Medicare reimbursements that kicked in last January. "It's abysmal," says Zaenger. "Lots of commercial insurers link their rates to Medicare, so the reduction is having a huge impact." Rising malpractice insurance premiums also hurt the bottom line.

While there are no miracle cures for the recent income malaise, consultants such as Zaenger recommend several techniques to boost earnings. Negotiate with insurers for a more-lucrative fee profile. Add ancillary services such as diagnostic imaging, bone density scans, and physical therapy. Streamline your office procedures so you can see two extra patients a day.

And ruthlessly trim operating costs. That appears to be a key to success for a number of the specialties in the MGMA survey—especially invasive cardiologists and orthopedic surgeons—that posted compensation gains despite flat or reduced collections. You can get a better handle on cost-cutting by reading our report on practice expenses in our next issue.

 

How much did you make in 2001?

2001 collections
Change from 2000
2001 compensation
Change from 2000
Cardiologists (invasive)
$731,904
1.9%
$362,209
11.2%
Cardiologists (noninvasive)
522,165
-16.8
320,111
6.7
FPs (w/obstetrics)
309,419
1.8
150,290
-2.4
FPs (w/o obstetrics)
287,239
-1.0
146,601
1.0
Gastroenterologists
620,610
5.7
312,074
10.9
General surgeons
497,633
0.0
257,509
4.9
Internists
288,494
0.8
149,020
0.0
Ob/gyns
501,634
0.1
231,000
3.5
Orthopedic surgeons
678,186
-6.7
354,184
10.5
Pediatricians
321,935
2.5
150,000
6.1

 

The five-year picture

Median compensation for:
1997
1998
1999
2000
2001
Change 2000-2001
Change 1997-2001
Primary care*
$135,791
$139,244
$143,970
$147,232
$149,009
1.2%
9.7%
Specialists
220,476
231,993
245,910
256,494
263,254
2.6
19.4
Consumer Price Index
1.6
9.5

 

Income is highest down South

Median compensation for:
East
Midwest
South
West
Cardiologists (invasive)
$366,102
$350,618
$410,783
$284,457
Cardiologists (noninvasive)
309,807
332,204
373,624
254,323
FPs (w/obstetrics)
136,473
161,702
144,108
141,155
FPs (w/o obstetrics)
140,000
144,176
164,000
141,698
Gastroenterologists
289,740
348,047
354,680
251,252
General surgeons
226,909
271,452
273,200
238,421
Internists
140,404
147,819
164,667
149,502
Ob/gyns
209,290
261,365
264,364
206,852
Orthopedic surgeons
354,944
379,896
386,130
309,948
Pediatricians
142,327
148,741
156,075
150,907

 

How multispecialty group size1 affects income

Median compensation for:
10 or fewer physicians
11 to 25
26 to 50
51 to 75
76 to 150
Cardiologists (invasive)
—
—
$407,298
—
$360,000
Cardiologists (noninvasive)
—
—
325,000
—
337,083
FPs (w/obstetrics)
$148,390
$151,175
148,473
$155,634
148,098
FPs (w/o obstetrics)
136,212
141,969
143,052
165,228
146,952
Gastroenterologists
—
—
354,668
374,003
319,478
General surgeons
—
211,265
257,714
259,501
278,834
Internists
145,000
139,306
149,861
154,538
148,181
Ob/gyns
256,610
183,096
238,599
261,773
241,188
Orthopedic surgeons
345,700
375,043
354,213
334,449
376,886
Pediatricians
135,000
135,450
149,649
162,283
151,295

 

Doctors in single-specialty practices earn more

Median compensation for:
Single- specialty
Multi- specialty
Cardiologists (invasive)
$388,963
$325,000
Cardiologists (noninvasive)
380,904
288,509
FPs (w/obstetrics)
153,400
149,821
FPs (w/o obstetrics)
154,452
144,911
Gastroenterologists
380,638
289,785
General surgeons
294,618
251,140
Internists
156,398
148,322
Ob/gyns
250,168
226,077
Orthopedic surgeons
376,539
333,733
Pediatricians
167,760
147,979

 

The gender gap won't go away

Median compensation for:
Male
Female
Cardiologists (invasive)
$371,655
$294,261
Cardiologists (noninvasive)
338,850
224,898
FPs (w/obstetrics)
159,864
135,000
FPs (w/o obstetrics)
153,282
128,135
Gastroenterologists
336,272
240,813
General surgeons
263,438
202,523
Internists
157,414
132,573
Ob/gyns
244,281
213,084
Orthopedic surgeons
356,225
236,134
Pediatricians
167,036
134,000

 

Another view of physician income

Any number of organizations track physicians' compensation and publicize the results. Most efforts focus narrowly, on starting salaries, for example, or on large or hospital-owned groups. Not surprisingly, figures can be all over the map. So we decided to supplement our accompanying report, which uses data exclusively from the Medical Group Management Association, with another set of numbers for reference.

We turned to the National Association of Healthcare Consultants, a group of approximately 350 practice management consultants nationwide. Its survey represents data from 5,000 physicians, who are also clients of the Association's members.

Keep in mind that the Association's survey draws heavily from smaller practices, mostly in the South and Midwest, and isn't scientifically adjusted to account for how the survey's sample varies from the universe of all doctors. This skewing could help explain some of the more-surprising income figures, such as those for FPs (on the low side) and invasive cardiologists (on the high side).

 

See where you stand

 
Net profit*
Cardiologists (invasive)
$519,643
Cardiologists (noninvasive)
362,277
FPs (w/obstetrics)
111,984
FPs (w/o obstetrics)
128,782
Gastroenterologists
362,244
General surgeons
285,838
Internists
165,950
Ob/gyns
264,982
Orthopedic surgeons
412,892
Pediatricians
169,178

 



Robert Lowes. Earnings Survey: More hours, more patients, no raise?.

Medical Economics

2002;22:76.

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