Even a doubling of median total compensation was not enough to keep up with record inflation rates
A report from the Medical Group Management Association found that provider compensation is on the rise but not keeping up with inflation.
The 34th annual DataDive Provider Compensation report revealed the effects of inflation and staffing shortages on physician compensation and productivity in 2022.
The report found that while growth in median total compensation for primary care physicians doubled from 2021 from 2.13% to 4.41% in 2022, it was not enough to compensate for inflation that was well above 6% both years.
Compensation growth varied across specialties over the past three years, ranging from an 0.13% increase in urgent care physician compensation to 10.57% increases for family medicine (without obstetrics) physicians.
Compensation also varied by region. Since the start of the pandemic, physicians in the Western region have experienced larger increases in total compensation than other areas of the country, according to the report. Primary care providers in the Southern and Western regions have experienced the largest increases in total compensation over the past four years.
For the second year in a row, primary care physicians earn the most in Mississippi, earning $140,000 more than their District of Columbia counterparts and $126,000 more than their counterparts in Nevada. The difference in surgical and nonsurgical specialist pay is even greater. Surgical specialty physicians earn $327,000 more in South Dakota than their counterparts in Louisiana, and nonsurgical specialty physicians report earning $429,000 more in Alabama than their counterparts in Nevada.
As new physicians emerge from residencies and fellowships, those newly hired in 2022 reported earning more guaranteed compensation than their pre-pandemic counterparts in 2019. In some cases, signing bonuses were offered to physicians, but less than 50% reported such an offer as part of a contract or negotiation. For physicians offered a signing bonus who ultimately did not start employment with the practice after accepting, about one-third were required to pay back the full amount, which for primary care physicians, averaged $20,000.
For productivity, physician-owned practices reported higher levels or productivity compared to hospital-owned practices, according to the report. The difference in total collections ranges from $96,580 to $172,221 between primary care physicians, surgical and non-surgical specialists, and advanced practice providers.
Practices that reported faring well last year noted using some or all of the following strategies:
The report features data on nearly 190,000 providers from over 6,800 organizations to provide a snapshot of the industry as well as strategies health care leaders should consider to move forward.