Physician compensation trails inflation

Flat compensation for primary care

Physicians’ overall compensation in primary and specialty care did not keep pace with inflation in 2008, reports the Medical Group Management Association’s (MGMA) Physician Compensation and Production Survey: 2009 Report Based on 2008 Data.

Primary care physicians saw generally flat compensation with a reported 2% increase, which was a 1.73% decrease when adjusted for inflation, for a median of $186,044. Specialists’ compensation rose 2.19%, a 1.59% drop when adjusted for inflation, to a median of $339,738. Inflation in 2008 amounted to a 3.8% increase in the U.S. consumer price index (refer to Figure 13).

“Physician practices endure tough economic challenges to stay solvent, especially these days. For physicians to have a chance to hold their incomes steady, it’s vital that they pay close attention to their bottom line and benchmark their practices and compensation levels against their peers,” says William F. Jessee, MD, MGMA president and CEO. “With physician payment rates lagging behind inflation, physician practices need as many tools as possible to maintain their incomes.”

Internists fared worst among primary care physicians, with an increase of less than 1% in compensation in 2008, a 3.37% decrease with inflation factored.

Among specialists, emergency medicine physicians, dermatologists, and general surgeons all reported flat salaries before inflation was factored in, with inflation- adjusted declines of up to 3.2%. Among the few specialties that posted nominal compensation gains in 2008 were gastroenterology, up 7.38%, and pulmonary medicine, up 6.65%. Psychiatry posted a 1.32% loss before inflation. With an increase of 7.16% from 2004 to 2008, psychiatry’s five-year compensation increase was half that of other specialties.

MGMA observed that median collections for professional charges were flat in primary care and declined by 6.53% for specialties, which reflects on widespread reports that financially strapped patients are postponing care (see Figure 14).

This year’s 25th annual compensation report provides data on nearly 50,000 providers and includes physicians and nonphysician providers in more than 110 specialties. MGMA has 22,500 members who lead 13,700 healthcare organizations nationwide representing 275,000 physicians.




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