Compensation in the Physician Specialties: Mostly Stable
Published: Oct 03, 2014
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Compensation for physicians in the specialties and medicine subspecialties remains stable despite the considerable flux in the health care sector resulting from national health policy changes and brisk physician practice merger and acquisition activity. Although a few specialties have experienced significant compensation increases in recent years, most are seeing gains roughly mirroring the inflation rate, and a few are seeing flat compensation.
Many specialties are seeing increases that roughly mirror the inflation rate, but there are exceptions in the surgical specialties and some medicine subspecialties.
The predictions that the Patient Protection and Affordable Care Act (ACA) and a handful of other health policy initiatives seeking to improve both care access and quality would dramatically affect physician specialty compensation and reduce earnings in some specialties just aren’t holding up, for now far anyway. The largest physician compensation surveys in the past few years reveal expected trends — primary care specialties continue to see their compensation increase, as promised, and supply-challenged specialties such as orthopedic surgery, gastroenterology, and hospital medicine are seeing steady upticks — but no major surprises.
“So far, the ACA hasn’t been a big factor in terms of its effect on physician compensation, and neither has the movement from volume- to value-based reimbursement,” said Tom Dobosenski, president of consulting services for the American Medical Group Management Association (AMGA). “But what we are seeing is that compensation overall for primary care continues to go up — and that’s the intent of the whole system change we’re undergoing.”
Over the last three years, including 2013 data just released, AMGA’s survey found an 8% increase in median compensation for internal medicine, 10% in family medicine, and 8.8% in general pediatrics. In last year’s survey alone, Mr. Dobosenski noted, primary care specialties as a group were up 3.8%, compared to 1.8% for all medical subspecialties combined. Surgical specialties as a group were up 3%, he added. The AMGA survey includes data from 480 large medical groups that, combined, represent more than 73,000 physicians and other providers.
The other physician “mega-survey” produced by the Medical Group Management Association (MGMA) found similar trends in some areas. In looking at three specialties (family medicine, noninvasive cardiology, and general surgery) and at compensation over five years for physicians in these specialties two years or less, MGMA data showed average median-compensation increases of 4.6%, 3.8%, and 3%, respectively. Over the 2009–2013 period, the total increases were 23.3% for family medicine, 19.1% for cardiology, and 15.1% for general surgery.
Specialty “Groupings” an Overall Barometer
These three specialties are “representative of primary care, medicine subspecialties, and surgery as a whole,” explained Dave Gans, the MGMA senior fellow for industry affairs who previously managed the compensation survey for many years. “This data gives you an overall sense of trends for these three [physician] sectors, where we’re seeing compensation increase generally at a rate greater than inflation. It’s not huge, but it’s notable.”
MGMA’s 2014 report showed a median starting compensation of $180,000 for family medicine, $284,000 for noninvasive cardiology, and $300,000 for general surgery. MGMA’s survey includes approximately 4,000 medical groups, most of which are small to mid-sized, that represent more than 60,000 physicians. Following are a few other “deep-dive” total-compensation figures from MGMA’s 2014 report, for physicians in these three specialties less than two years:
- Cardiology (noninvasive): mean — $383,117; 25th percentile — $320,000; and 75th percentile — $457,309
- Family medicine: mean — $190,693; 25th percentile — $159,672; and 75th percentile — $213,086
- General surgery: mean — $329,485; 25th percentile — $280,000; and 75th percentile — $367,200
Mr. Gans said physicians seeking their first practice opportunity should pay particular attention to compensation surveys’ interquartile range, from the 25th to the 75th percentile. “That’s where half of all the salary levels are,” he added, “although market factors also affect what physicians end up being paid.” He cites practice location, specialty supply and demand, and regional payer dynamics as three factors that might affect starting salaries in particular groups or geographic areas.
A third large survey conducted by New Jersey-based Hospital & Healthcare Compensation Service (HHCS), which included 41,489 physicians practicing in 283 organizations, revealed more nuanced compensation patterns in two primary care specialties, family medicine and internal medicine. Between 2011 and 2014, family medicine physicians’ salaries increased from $176,000 to $185,811, and internists’ from $180,000 to $193,776.
Trends in a Dozen Specialties: Mostly Unremarkable
In the smaller picture, a drill-down on compensation trends in roughly a dozen medical and surgical specialties, the numbers are following mostly predictable patterns as well, according to Mr. Dobosenski. Increases, where they are occurring, rarely outpace the inflation rate unless the supply-and-demand situation or particular market factors are driving the increases.
Surgery is a case in point. The recent trend directly employing physicians, coupled with brisk, ongoing merger-and-acquisition activity, is having a discernible effect on compensation in Mr. Dobosenski’s view. “There is a lot of competitive bidding going on, as organizations acquire surgery practices and guarantee salaries, and there are effects from all of the mergers we’re seeing in surgery specialties. Both are causing compensation to go up, especially in the larger surgery specialties,” he said, cautioning that the increases could be “a short-term phenomenon” that will stabilize once the market sorts itself out.
Following are surgical specialties two-year-spread median compensation data from AMGA’s reports:
- Cardiac/thoracic $535,944 $532,567
- General surgery 373,478 367,315
- Orthopedic surgery 525,000 501,808
- Otolaryngology 383,141 377,430
- Urology 424,063 413,746
Orthopedic surgery compensation survey data can be difficult to decipher because of all of the subspecialization in the field, Mr. Dobosenski pointed out. Increasingly, few orthopedic surgeons are truly generalists, except perhaps in smaller urban regions and rural areas, and the highly specialized surgeons tend to earn far more than their generalist counterparts. For instance, the 2014 AMGA report found that spine surgeons earned a median of $750,000 in 2013 — $225,000 more than generalists.
Corresponding MGMA media compensation data for general orthopedic surgery and urology, for 2012 and 2013, are below.
- Orthopedic surgery $559,137 $538,533
- Urology 422,624 420,516
In surgical and other non-primary care specialties, modest dips and spikes in compensation shouldn’t prompt physicians to read too much into the numbers, according to Mr. Gans. That’s because some single-year changes are a factor of either the data set itself or a short-term event or situation in the specialty — a newly approved procedure or, conversely, a Medicare payment cut. “Basically, anything that affects payment also affects physician compensation,” he said. “But generally, procedure-based specialties are more likely to see the impact of payment changes on their incomes than other specialties are. That’s why it’s more instructive to look at the five-year [compensation] numbers, if you want to get an idea of what’s going on in your specialty.”
Mr. Dobosenski concurred. “I advise physicians to look at a blend of compensation rates over a three-year period, and across surveys, because in some cases you could see anomalies that cause compensation to go down one year, and back up the next,” he said. In addition, survey pools can vary considerably. For instance, the AMGA survey focuses primarily on large multi-specialty practices, while MGMA’s focuses more on smaller single-specialty groups.
In the same vein, physicians whose specialties show fairly nondramatic compensation patterns — namely, stable incomes and only modest earnings increases — shouldn’t necessarily worry about their specialty’s financial health. “That’s not a cause for concern because the reality is that relatively flat compensation is an indication of a specialty that’s probably got about the right number of physicians in it, at about the right pay grade — and with productivity that’s staying about the same,” Mr. Dobosenski explained.
Smaller Medicine Subspecialties See Stable Incomes
A handful of medicine subspecialties fit that steady-is-good bill. Rheumatology compensation is going up modestly but steadily, for example, from a median of $231,579 in 2011 to $240,250 in 2013, per AMGA’s survey. That’s a three-year total increase of 3.74%, and net collected dollars (one measure of how hard physicians are working in terms of patient volumes to make their incomes) are also relatively flat. Infectious disease compensation is steady as well, at a median of $242,447 in 2013, up from $225,412 in 2011. “Infectious disease compensation is going up at a little less than the inflation rate, and there are no big changes in productivity, so the field appears stable,” Mr. Dobosenski said. (For the purposes of this article, productivity refers to relative value units, or RVUs, which most large surveys track.)
In pulmonary medicine, compensation, productivity, and net collected dollars are all fairly flat, he added. Per the AMGA survey findings, median compensation in the field (pulmonary medicine without critical care) was $300,646 in 2013, down from $303,125 in 2011. The fact that productivity hasn’t increased indicates that even though incomes aren’t going up, pulmonologists aren’t working harder to make their salaries.
Nephrologists’ compensation is also fairly flat, per the AMGA survey, at a median of $277,449 in the 2014 report, slightly down from $277,934 a year earlier, but up from $259,776 in 2011. Despite this apparent flattening, nephrologists’ productivity is on the rise, Mr. Dobosenski observed, with productivity up 11% and collections down 4% over the past three years. “Some of this could be an anomaly of the data set,” he noted, “but nephrologists appear to be working hard to maintain income levels.” The HHCS survey found an increase of 3.6% between 2012 and 2013, raising the median to $208,217, followed by a decline of 1.2% in the 2014 report.
Hematology-oncology compensation trends are a bit harder to tease out. Although the AMGA and MGMA surveys both point to stable incomes, hematology-oncology is a field populated by a broad range of practice sizes, from solo physicians to large groups at major cancer centers. Here’s a snapshot of the two major surveys’ findings:
- Hematology-oncology — MGMA survey: 2013 median of $421,093 versus 2012 median of $425,750
- Hematology-oncology — AGMA survey: 2013 median of $350,268 versus 2012 median of $348,157
The clear disparity between the two surveys’ findings may result from group size differences, the different data samples, and market and reimbursement factors affecting cancer treatment. The AMGA data, for instance, found that productivity was up 7.8% over the recent three-year period, but that actual collected dollars fell 2%.
In diagnostic radiology, the MGMA and AMGA surveys’ numbers are a bit closer together, particularly for the recent two-year period. Here are those data:
- Diagnostic radiology — MGMA survey: 2013 median of $498,122 vs. 2012 median of $495,768
- Diagnostic radiology — AGMA survey: 2013 median of $453,216 vs. 2012 median of $459,186
The compensation picture for diagnostic radiology has been stable if fairly flat for several years, usually increasing at about the rate of inflation, but two recent developments are worth noting, in Mr. Dobosenski’s view. RVUs increased 7.2% last year; and the gradual reorganization in the field, as groups and hospitals move to higher volumes and 24-hour coverage, and offsite services proliferate. Both developments could foretell compensation shifts ahead, but it’s hard to predict what those will be.
Hospital Medicine Sees Steady Increases
One specialty where compensation news has been consistently good is hospital medicine. The AMGA’s 2014 report shows a median of $241,250, up 2% from 2012 and up a total of 11.8% from 2010 to 2013. The data from the MGMA and the Society of Hospital Medicine (SHM), which collaborate on the annual survey, showed median compensation of $253,977 in the 2013 report, up from $248,320 in the 2012 report. Pediatric hospitalists’ median compensation increased a total of 11.4% since the 2011 survey, according to the SHM, to a median of $178,885 in the 2013 report.
“Hospitalists continue to be in demand, demonstrating a steady increase in compensation. This, combined with the steady growth of the specialty, indicates that U.S. hospitals continue to value the work of hospitalists,” said Joe Miller, the SHM’s senior vice president of practice management; he also noted that career paths for hospitalists are also on the increase in recent years.
“Hospitalists are a key part of the overall trend toward physician shift-based models in hospitals, and because the demand is still high, the specialty will likely see continued steady [compensation] increases,” Mr. Dobosenski observed.
Specialty Compensation Trend Takeaways
Following are tips and reminders from this article’s sources for young job-seeking physicians as they wade through survey data to gauge what’s going on in their fields:
Starting salary is just one factor and one number. “Physicians should keep in mind that the starting salary they receive has to be sustainable. And for that to happen, within a year or so, the practice has to be able to have the physician working at a level where he or she carries a full patient load and can pay for their own compensation and their share of the overhead. Physicians will continue to be paid well, but they’ll work hard for their earnings. In addition, care value, not volume will be increasingly important in the system, and it will affect compensation.” — Dave Gans, MGMA
Seek out reliable data, and look at it over time. “There’s a ton of misinformation out there, especially about compensation potential, so don’t rely on what one source says for your information when looking at offers. Look at survey data over time, and take everything (including that data) with a bit of caution as to what it’s telling you. All surveys have anomalies, so don’t get hung up on what one survey says as gospel. And remember that every physician knows someone in the specialty who gets paid more and works less — and that will never change.” — Tom Dobosenski, AMGA