Specialty Physician Compensation Barely Keeps up with Inflation

ENGLEWOOD, Colo.— Specialty physicians’ overall compensation remained flat in 2007, (increasing just 0.31 percent, adjusted for inflation, or 3.16 percent without inflation) according to the Medical Group Management Association (MGMA) Physician Compensation and Production Survey: 2008 Report Based on 2007 Data. Specialists’ compensation rose to a median of $332,450. Inflation amounts to a 2.85 percent increase in the consumer price index.

For primary care physicians, median compensation rose 3.35 percent over inflation (6.3 percent 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 percent increase in production (gross charges). Specialists reported flat overall production rates (.6 percent).

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

“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,” said William F. Jessee, MD, FACMPE, 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.

MGMA’s Physician Compensation and Production Survey Report is one of the most respected benchmarking reports in the industry based on the detailed information it offers, its nearly 25-year history and rigorous in-house data validation and analysis. 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. This year’s report includes data for physicians and non-physician providers in 105 specialties including new data for family practice physicians and internists in ambulatory-only care; hospitalist compensation for family practice, internal medicine (IM), pediatrics, IM pediatrics; and compensation for care provided in hospice or palliative care settings.

Source: Medical Group Management Association