July 29 - Survey Says... Physician Compensation Barely Keeping Up With Inflation

Inflation is taking a significant bite out of physicians’ compensation, according to the latest Medical Group Management Association (MGMA) Physician Compensation and Production Survey, which is based on 2007 data. Specialty physicians’ overall compensation remained flat in 2007, (increasing just 0.31%, adjusted for inflation, or 3.16% without inflation) with a median of $332,450. Inflation amounts to a 2.85% increase in the consumer price index.

Among specialists, invasive cardiologists’ compensation declined (0.18% loss) even before inflation. Conversely, noninvasive cardiologists’ compensation increased 11.72%. Compensation for emergency medicine physicians and hematology/oncology also failed to keep up with inflation. Specialists who fared better included anesthesiologists (6.43% increase above inflation) and urologists, posting a gain of 5.5% above inflation—compounding a similar gain in 2006.

For primary care physicians, median compensation rose 3.35% over inflation (6.3% without inflation) to $182,322 in 2007. This nominal increase comes after several years of flat or declining compensation. Additionally, primary care physicians reported a 7.59% increase in production (gross charges). Specialists reported flat overall production rates (.60%).

“Although primary care physicians posted modest gains in compensation as a result of increased productivity and reweighting of evaluation and management codes, overall practice costs continue to rise at staggering rates,” says William F. Jessee, MD, FACMPE, the president and CEO of MGMA. “The continued uncertainty of the reimbursement environment creates an untenable situation for physician groups.”

MGMA observed that trends have shifted for primary care physician compensation in specific regions. Historically, physicians in the southern section of the United States have reported slightly higher compensation than the national median of their peers in other regions. For the first time, primary care physicians in the western section were more highly compensated in 2007.

This year’s report represents data submitted by practices that provided information on nearly 52,000 providers—the largest provider population of any physician compensation survey report in the United States. It includes data for physicians and nonphysician providers in 105 specialties including new data for family practice physicians and internists in ambulatory-only care; hospitalist compensation for family practice, internal medicine, pediatrics, and internal medicine-pediatrics; and compensation for care provided in hospice/palliative care settings.

Source: Medical Group Management Association

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