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Is a Future Look Predicated on the Past?
By Dr. Brian J. Knabe; CFP® CMP™
By Dr. David Edward Marcinko; MBA CMP™
By Prof. Hope Rachel Hetico; RN, MHA CPHQ CMP™
www.BusinessofMedicalPractice.com
With the passage of healthcare reform legislation, officially known as the Patient Protection and Affordable Care Act of 2010, many questions remain regarding its effect upon physicians’ livelihood.
Undoubtedly this bill moves the healthcare system several steps closer to a socialized model, but the effects on physicians’ salaries and compensation models are far from clear.
Other Countries
One way to see the effect that this shift may have on compensation is to look to other countries, many of which already have a more socialized system in place.
According to the CRS Report for Congress, US Health Care Spending: Comparison with Other OECD Countries http://assets.opencrs.com/rpts/RL34175_20070917.pdf) US specialists rank near the top in compensation compared to these other countries, trailing the Netherlands and Australia. The average specialist in the US made $230,000 in this survey. The comparable salary in Canada is $161,000, $150,000 in the UK, and $253,000 in the Netherlands. Generalists in the US are at the top in terms of compensation with an average of $161,000. This compares to $107,000 in Canada, $118,000 in the UK, and $117,000 in the Netherlands.
Inflation Adjustments
Another indicator of physician salary trends is the change in compensation adjusted for inflation. According to the American Medical Association, the inflation-adjusted income for the average patient care physician declined from $180,930 to $168,122 from 1995 to 2003, a 7% decrease. And, the inflation adjusted decrease is more substantial given the low interest rate environment thru 2010, and going forward.
Physician Net Income Chart
| Average net income | |||
| 1995 | 2003 | Decrease | |
| All patient care physicians | $180,930 | $168,122 | 7% |
| Primary care physicians | $135,036 | $121,262 | 10% |
| Medical specialists | $178,840 | $175,011 | 2% |
| Surgical specialists | $245,162 | $224,998 | 8% |
Source: http://www.ama-assn.org/amednews/site/free/prsc0724.htm
Given these trends, as well as the fact that an increasing percentage of healthcare payments are coming from dwindling government sources, it is likely that physician salaries will decline as “healthcare reform” legislation is implemented. In fact, it is likely that this trend will accelerate. A 15% to 25% inflation-adjusted decline in salaries over the next decade is a reasonable prediction.
Assessment
It is also important to note that the level of student debt in the US continues to rise, while college and medical education are usually subsidized in other countries. Many foreign physicians graduate with no student loan debt. The ratio of debt level to salary in the US continues to become more onerous for new physicians.
Conclusion
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Filed under: "Doctors Only", Health Economics | Tagged: Brian J. Knabe, Business of Medical Practice, David Edward Marcinko, doctor income, Hope Rachel Hetico, physician compensation, physician net income, physician salary, US Health Care Spending, www.BusinessofMedicalPractice.com |
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
Ad-Hoc Physician Compensation Survey
We are asking doctors and providers of all stripes to post personal examples of medical practitioners leaving primary, solo or small group practice because they just can’t afford continued reimbursement declines, tolerate this new ACA law, or the toxic environment of the general healthcare ecosystem any longer.
IOW: Tell us what you think?
Dr. David Edward Marcinko MBA
http://www.HealthcareFinancials.com
[Editor-in-Chief]
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Most Docs Fear Health Reform
[A Recent Survey]
Nearly two-thirds of U.S. doctors surveyed fear healthcare reform could worsen care for patients, by flooding their offices and hurting income, according to a Thomson Reuters survey just released. The survey of more than 2,900 doctors found many predict the legislation will force them to work harder for less money.
“When asked about the quality of healthcare in the U.S. over the next five years, 65 percent of the doctors believed it would deteriorate with only 18 percent predicting it would improve,” Thomson Reuters, parent company of Reuters, said in a statement.
Source: Reuters [1/19/11]
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In an email today, my friend Bill Rusteberg reports that last week, former HHS Secretary Tommy Thompson was addressing a medical foundation in San Antonio when he told physicians in the audience that within a few years, those who continue their practice as usual will go out of business whether Obama and his Healthcare Reform are re-elected or not. Thompson predicts that doctors will become involved with integrated practices, many joining hospital payrolls as employees and others starting concierge services.
Is this where dentistry in the US is headed as well?
Darrell K. Pruitt DDS
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What Do Doctors Earn from Medicare?
Dr. Knabe, et. al,
Did you know that two senators have introduced legislation to overturn a 1979 court injunction that bars the government from revealing what individual physicians earn from Medicare.
Yep! The Medicare Data Access for Transparency and Accountability Act, or DATA Act, was just introduced by Sens. Ron Wyden (D., Ore.) and Charles Grassley (R., Iowa).
http://online.wsj.com/article/SB10001424052748704013604576249090982504246.html
Any thoughts?
Janice
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NON-CLINICAL CAREER CONFERENCE
Sept 2011
Opportunities Available for Physicians in the Financial Services Industry and How to Obtain Them
By Brian J. Knabe, MD, CMP™, CFP, FAAFP
Dr. Knabe explained the many and varied positions in the financial industry and the compensation structure for these positions. He discussed the unique abilities and qualities physicians bring to the table, and the professional designations and certification available. Dr. Knabe offered practical bottomline advice on how to position yourself as an expert and leverage your experience as a physician to transition into the financial industry.
Brian J. Knabe, MD, CMP, CFP, FAAFP is a financial advisor at Savant Capital Management in Rockford, IL. Brian is a financial advisor and a member of the Advisory Team. He draws upon his experience from the medical field as he works with clients, advisors, portfolio managers, and planners in order to develop comprehensive planning, investment, and tax strategies for professionals. Brian is a magna cum laude graduate of Marquette University with an honors degree in biomedical engineering. He earned his medical degree from the University of Illinois College of Medicine and has earned the Degree of Fellow of the American Academy of Family Physicians (FAAFP). Brian also attended the University of Illinois for his family practice residency, where he served as chief resident. Brian is a Certified Medical Planner (CMP)TM, has earned a Certificate in Financial Planning from Marquette University, and recently received his Certified Financial Planner (CFP®) designation. Brian is a clinical assistant professor in the Department of Family Medicine with the University of Illinois. He is a member of several professional organizations, including the American Academy of Family Physicians, the Illinois State Medical Society, and the Catholic Medical Association. He serves on the Executive Committee at the University of Illinois College of Medicine at Rockford, and on the Executive Board for the Blackhawk Area Council of the Boy Scouts of America as well as the Haven Network board. Brian joined Savant in January 2007.
http://www.seak.com/September_2011_NCC_Non_Clinical_Careers_Conference.html
Well done Brian; you make us proud!
Prof. Hope Rachel Hetico RN MHA CMP™
http://www.CertifiedMedicalPlanner.com
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Retire following the ACA?
Is it now time for doctors to retire? I am not sure yet, but will pay more attention to related ME-P topics and purchase all Dr. Marcinko’s books on the subject.
Dr. Wilmington Reynolds
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How can it be possible? Physicians charge much to patient. Physician Net Income Chart should increase.
Justin Camp
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Physician Registration to Review Sunshine Act Data Now Open
Beginning August 1, 2013, the Physician Payment Sunshine Act (PPSA), a section of the Affordable Care Act, required manufacturers of drugs, devices, biologicals, or medical supplies to start collecting data consisting of payments and other transfers of value made to physicians, including podiatrists. CMS will post the information on a publicly available, searchable online database by September 30, 2014, and on June 30 of each year thereafter.
Physicians are not required to collect and report data. Physicians should, however, register with CMS to review and potentially dispute data about payments or other transfers of value they have received from drug and medical device companies. Physicians are not required to review and dispute the data but are encouraged to do so to ensure its accuracy.
Source: APMA Weekly Focus [5/27/14}
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