Exclusive Survey Earnings: Primary care tries to hang on

September 17, 2004

Family physicians and internists didn't keep up with inflation in 2003.

 

Jump to:Choose article section... Who's king of the compensation hill? With less managed care, Southern physicians earn more How revenue and compensation varied in 2003 In primary care,employed docs bring home less bacon Work in the city—but not too far in The gender gap narrows in primary care Where do you stand on the earnings ladder? Primary care earnings— in a holding pattern

Family physicians and internists didn't keep up with inflation in 2003.

In news reports last year, the word "economy" was frequently preceded by the word "sluggish." Nobody knew that better than primary care physicians. Their median total compensation in 2003 was the same as it was in 2002—$150,000.

This glum picture emerges from the latest Medical Economics Continuing Survey, which sampled office-based MDs and DOs in 24 specialties. With flat earnings, primary care doctors actually lost ground financially, as they watched the cost of living jump 1.9 percent last year.

Doctors' earnings blues stemmed from a number of causes. One is flat reimbursement. Medicare increased its fees by a paltry 1.6 percent in March 2003, and commercial payers, who typically take Medicare's lead, were just as stingy, either freezing their fees or cutting them. In some markets, laid-off workers who lost their health insurance translated into fewer visits. "People just put off going to the doctor," says consultant Keith Borglum in Santa Rosa, CA.

Meanwhile, the cost of running a practice continued to climb. "Our health insurance premiums went up 5 percent in 2003," says FP Michael Fleming, member of a 10-doctor group in Shreveport, LA, and president of the American Academy of Family Physicians. "We also needed to give raises to our employees to retain them." Not surprisingly, there wasn't any raise for Fleming himself last year.

To Atlanta consultant Gary Matthews, stagnant earnings in primary care represent a hangover from the heyday of managed care in the 1990s. "Compensation was artificially high when the gatekeeper concept was in vogue," says Matthews. "Hospitals and large groups were giving income guarantees as high as $180,000 a year to doctors straight out of residency. When the guarantees ended, everybody realized that the doctor couldn't bring in enough to justify that pay."

Despite facing some of the same economic forces as primary care doctors, many procedure-based specialists fared well in 2003. Invasive cardiologists, for example, registered an 11-percent jump in income. The proceduralists have benefited from the waning of the gatekeeper model, since they're now more accessible to patients. And they're kept busy by graying baby-boomers anxious to preserve their hearts, knees, and various organs.

Specialists also have managed to make up for meager third-party reimbursement by generating income from ancillary services such as diagnostic imaging, outpatient surgery centers, and even specialty hospitals, says Dan Stech, director of survey operations for the Medical Group Management Association. "Primary care doctors typically don't have enough money to launch a big ancillary service."

As is always the case, the income picture also changes considerably by geography, the size of the practice, age, gender, and a number of other variables. Job-hunting physicians, for instance, might want to remember the following factoid: You'll make the most down South. Doctors there earned a median $200,000 in 2003, $40,000 more than their Eastern counterparts, who were at the bottom of the income pecking order.

What accounts for the difference? Supply and demand is one likely explanation. Eastern states on the whole have more physicians per capita than any other region. Massachusetts, for example, had 419 physicians per 100,000 population in 2001, about two and half times the rate in Mississippi and twice the rate in Texas. Doctors in short supply tend to be busier. Conversely, insurers have more bargaining power to drive down fees where doctors abound, adds Dan Stech.

Physician income also tends to rise where HMOs are weakest. In 2003, the South had the lowest rate of HMO enrollment—15 percent—in the country, according to Interstudy Publications, a managed care research organization in St. Paul, MN. The Midwest had the second lowest penetration rate—19 percent—and, perhaps not coincidentally, the second highest level of physician income. "Capitated physicians often don't do as well as others," notes attorney and consultant Daniel Bernick with The Health Care Group in Plymouth Meeting, PA. "And HMOs have tighter referral policies than other types of plans."

Group practice is another predictor of financial success. Soloists ranked the lowest in earnings with $177,000, while doctors in groups of 10-24 were tops at $250,000. Income tailed off in groups of 50 or more, perhaps reflecting a greater prevalence of lower-paid employed physicians.

Male physicians once again out-earned their female counterparts in 2003, this time to the tune of $70,000, although the gender gap shrinks to $30,000 in primary care. On one level, it's a matter of sheer production. Because their family duties generally exceed those of men, female physicians tend to work fewer hours at the office and consequently see fewer patients.

Likewise, women gravitate to family-friendly employee positions with more fixed schedules. "Those jobs don't offer opportunities for greater income," says Leesburg, VA, public health specialist Diane Helentjaris, president of the American Medical Women's Association. And the specialties they choose tend to be less call-intensive—dermatology as opposed to neurosurgery—and, not surprisingly, less lucrative.

There's one more explanation for why female physicians make less—gender discrimination. "From what my AMWA members tell me, it's not over yet," says Helentjaris.

Gender, demographics, the post-9/11 economy—there are stories galore behind the numbers in our income survey. How about your income story? The accompanying charts and tables will help you compare yourself to other doctors.

 


Who's king of the compensation hill?

2003 practice revenue 2003 total compensation
$800,000Cardiologists (invasive)$400,000
$700,000Neurosurgeons$396,000
800,000Orthopedic surgeons$367,600
$600,000Thoracic surgeons$325,000
$550,000Cardiologists (noninvasive)$300,000
$580,000Gastroenterologists$300,000
$650,000Urologists$300,000
$660,000Plastic surgeons$292,000
$600,000Dermatologists$266,000
550,000Ophthalmologists$250,000
$400,000Pulmonologists$240,000
$450,000General surgeons$235,000
$425,000Nephrologists$230,00
$575,000Allergists/Allergy immunologists$217,000
$500,000Ob/gyns$208,000
$520,000Rheumatologists$197,000
$305,000Infectious disease specialists$160,000
$200,000Psychiatrists$160,000
$349,000Endocrinologists$150,000
$310,000Internists$150,000
$379,100FPs$149,300
$365,000Pediatricians$140,000
$250,000GPs$120,000
$414,000All respondents$180,000

 

With less managed care,
Southern physicians earn more

Practice revenueTotal compensationHMO penetration*
EAST$360,000$160,00031%
New England360,000

  159,000

Mid-East365,000166,00030
    
MIDWEST$420,000$180,00019%
Great Lakes region410,000180,00019
Plains states431,000180,00019
    
SOUTH$460,000$200,00015%
South Atlantic432,000180,00018
Mid-South500,000204,00014
Southwest500,000208,70011
    
WEST$400,000$173,90035%
Rocky Mountain region400,000165,00021
Far West (including Alaska and Hawaii)400,000175,00040
National$414,000$180,00023%

 


How revenue and compensation
varied in 2003

Practice revenueTotal compensation
All physiciansPrimary careAll physiciansPrimary care
Solo$387,000$346,800$177,000$150,000
Expense-sharing411,000375,000190,000150,000
2 physicians518,600450,000200,000159,600
3 physicians486,300408,000200,000170,000
4 physicians500,000410,000221,000180,000
5-9 physicians500,000448,000245,000180,000
10-24 physicians500,000400,000250,000173,300
25-49 physicians700,000—240,000—
50 or more physicians580,000—190,000170,000
Single-specialty groups500,000430,000240,000180,000
Multispecialty groups500,000392,000200,000170,000
1-5$385,000$320,000$150,000$135,000
6-10425,000360,000174,000150,000
11-20432,000400,000189,000151,000
21-30426,000377,000200,000160,000
31 +365,000330,000173,900145,000
30-34$390,000$360,000$135,000$135,000
35-39410,000360,000160,000148,000
40-44400,000360,000180,000145,000
45-49440,000400,000190,000160,000
50-54445,500380,000200,000160,000
55-59424,000374,900200,000160,000
60-64393,000325,000171,600140,000
65-69358,000318,800175,000149,200

 


In primary care,employed
docs bring home less bacon

Total compensation
All physiciansEmployed physicians
FPs$149,300$142,000
GPs120,000120,000
Internists150,000140,000
Ob/gyns208,000200,000
Pediatricians140,000120,000
All primary care$150,000$140,000

 


Work in the city—but not too far in

Type of communityPractice revenueTotal compensation
Inner city$300,000$150,000
Urban410,000200,000
Suburban430,400180,000
Rural431,000175,000

 


The gender gap narrows in primary care

Total compensation 
MaleFemale% difference*
FPs$150,000$130,00015%
GPs120,000100,00020
Internists151,000120,00026
Ob/gyns227,300190,00020
Pediatricians160,000120,00033
All primary care physicians$160,000$130,00023%
All respondents$200,000$130,00054%

 


Where do you stand
on the earnings ladder?

Total compensation$600,000 or more$500,000- $599,000$400,000- $499,999$350,000- $399,999$300,000- $349,999
Allergists/Allergy immunologists7%2%7%6%9%
Cardiologists (invasive)1812201212
Cardiologists (noninvasive)51014914
Dermatologists1041377
Endocrinologists1<1314
FPs1<1224
Gastroenterologists11411815
GPs1<1113
General surgeons3210714
Infectious disease specialists11333
Internists2<1224
Nephrologists328710
Neurosurgeons231216914
Ob/gyns245610
Ophthalmologists1031666
Orthopedic surgeons207191011
Pediatricians11113
Plastic surgeons14311712
Psychiatrists02018
Pulmonologists126814
Rheumatologists24548
Thoracic surgeons1211141017
Urologists106161215
All respondents4%2%6%4%7%
All primary care1%1%2%2%4%
Total compensation$250,000- $299,999$200,000- $249,999$150,000- $199,999$125,000- $149,999$100,000- $124,999
Allergists/Allergy immunologists11%18%19%5%5%
Cardiologists (invasive)79513
Cardiologists (noninvasive)1314936
Dermatologists1521724
Endocrinologists713271218
FPs611251818
Gastroenterologists14181212
GPs310181019
General surgeons9141768
Infectious disease specialists1212241614
Internists512261616
Nephrologists14172166
Neurosurgeons117413
Ob/gyns12201969
Ophthalmologists1024964
Orthopedic surgeons1110541
Pediatricians414211522
Plastic surgeons18111225
Psychiatrists22032312
Pulmonologists17152085
Rheumatologists91820139
Thoracic surgeons714522
Urologists1111835
All respondents8%14%20%11%12%
All primary care6%13%23%15%17%
Total compensation$80,000- $99,999$60,000- $79,999Less than$60,000  
Allergists/Allergy immunologists5%3%2%  
Cardiologists (invasive)<11<1  
Cardiologists (noninvasive)121  
Dermatologists413  
Endocrinologists833  
FPs546  
Gastroenterologists201  
GPs141012  
General surgeons333  
Infectious disease specialists6<15  
Internists754  
Nephrologists114  
Neurosurgeons11<1  
Ob/gyns234  
Ophthalmologists312  
Orthopedic surgeons12<1  
Pediatricians853  
Plastic surgeons212  
Psychiatrists1163  
Pulmonologists121  
Rheumatologists224  
Thoracic surgeons212  
Urologists111  
All respondents5%4%4%  
All primary care6%5%4%  

 


Primary care earnings—
in a holding pattern

 Practice revenueTotal compensation
20032002% change20032002% change
FPs$379,100$350,0008.3%$149,300$150,000–0.5%
GPs250,000249,0000.4120,000116,0003.4
Internists310,000318,600–2.7150,000150,0000
Ob/gyns500,000500,0000208,000220,000–5.5
Pediatricians365,000350,0004.3140,000130,0007.7
All primary care$361,800$350,0003.4%$150,000$150,0000%
Inflation rate 20031.9%

 

How we conducted this year's survey

Questionnaires for the 2004 Medical Economics Continuing Survey, spearheaded by Sandy Johnson, manager of field services, were mailed in March to 54,725 MDs and DOs in private, office-based practice throughout the US. This represents a random sampling of 23 specialties from the AMA master list maintained by Phoenix Marketing Group, a subsidiary of St. Louis-based Express Scripts. Nonrespondents received a follow-up mailing in April.

By the cutoff date of May 20, 11,094 MDs and DOs—20.3 percent—had responded. We discarded returns with apparent discrepancies and those from physicians who hadn't rendered office-based patient care throughout 2003. This left us with a working sample of 8,159 physicians. These were coded by the Medical Economics research staff and then tabulated by Suzanne Coopersmith of Crosstabs in Syosset, NY.

The survey sample was selected to be representative within each specialty as to type of practice, age, geographical region, and gender. We weighted the results to reflect these criteria.



Robert Lowes. Exclusive Survey--Earnings: Primary care tries to hang on.

Medical Economics

Sep. 17, 2004;81:52.