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Compensation Trend Data Sources
By Dr. David Edward Marcinko MBA
[Editor-in-Chief] www.BusinessofMedicalPractice.com
Related chapters: Chapter 27: Salary Compensation and Chapter 29: Concierge Medicine and Chapter 30: Practice Value-Worth
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PERSONAL PREAMBLE
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Physician compensation is a contentious issue and often much fodder for public scrutiny. Throw modern pay for performance [P4P], and related metrics, into the mix and few situations produce the same level of emotion as doctors fighting over wages, salary and other forms of reimbursement.
This situation often springs from a failure of both sides to understand mutual compensation terms-of-art when the remuneration deal was first negotiated. This physician salary and compensation information is thus offered as a reference point for further investigations.
Introduction
More than a decade ago, Fortune magazine carried the headline “When Six Figured Incomes Aren’t Enough. Now Doctors Want a Union.” To the man in the street, it was just a matter of the rich getting richer. The sentiment was quantified in the March 31, 2005 issue of Physician’s Money Digest when Greg Kelly and I reported that a 47-y.o. doctor with 184,000 dollars in annual income would need about 5.5 million dollars for retirement at age.
Of course, physicians were not complaining back then under the traditional fee-for-service system; the imbroglio only began when managed care adversely impacted income and the stock market crashed in 2008.
Today, the situation is vastly different as medical professionals struggle to maintain adequate income levels. Rightly or wrongly, the public has little sympathy for affluent doctors following healthcare reform. While a few specialties flourish, others, such as primary care, barely move.
In the words of colleague Atul Gawande, MD, a surgeon and author from Brigham and Women’s Hospital in Boston, “Doctors quickly learn that how much they make has little to do with how good they are. It largely depends on how they handle the business side of practice.” And so, it is critical to understand contemporary thoughts on physician compensation and related trends.
Compensation Trend Data Sources
A growing number of surveys measure physician compensation, encompassing a varying depth of analysis. Physician compensation data, divided by specialty and subspecialty, is central to a range of consulting activities including practice assessments and valuations of medical entities. It may be used as a benchmarking tool, allowing the physician executive or consultant to compare a practitioner’s earnings with national and local averages.
The Medical Group Management Association’s (MGMA’s) annual Physician Compensation and Production Correlations Survey is a particularly well-known source of this data in the valuation community. Other information sources include Merritt Hawkins and Associates; and the annual the Health Care Group’s, [www.theHealthCareGroup.com] Goodwill Registry.
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www.CertifiedMedicalPlanner.org
Assessment
However, all sources are fluid and should be taken with a grain of statistical skepticism, and users are urged to seek out as much data as possible and assess all available information in order to determine a compensation amount that may be reasonably expected for a comparable specialty situation. And, realize that net income is defined as salary after practice expenses but before payment of personal income taxes.
Conclusion
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Filed under: Book Reviews, Career Development, CMP Program, Practice Management, Practice Worth | Tagged: Atul Gawande, concierge medicine, david marcinko, doctor salary, Goodwill Registry, Greg Kelly, Health Care Group’s, Medical Group Management Associations, MGMA, More on the Doctor Salary Conundrum, P4P, physician income, physician's money digest, private pay medicine, www.BusinessofMedicalPractice.com, www.CertifiedMedicalPlanner.org |
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Salary
I’ve said it before, and I’ll say it again.
Is there any other profession that is as tone deaf as we are when it comes to talking about our livelihood? Is there any other profession that feels so free to complain about making too little, when they objectively make so much compared to so many others?
Dr. David Edward Marcinko MBA
http://www.CertifiedMedicalPlanner.org
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Physician Pay Increasingly Tied to Patient Satisfaction
[A New Survey]
Physicians may have an extra incentive to keep their patients from sitting long in the doctor’s office waiting room, as an increasing amount of their compensation is becoming based on patient satisfaction.
In what appears to be the very beginning of a growing trend, a new survey shows two percent of primary care physicians’ compensation is based on “patient satisfaction metrics” while one percent of specialist physician compensation is based on “patient satisfaction metrics.”
It’s the first time patient satisfaction scores were part of an annual compensation report from the Medical Group Management Association but it likely won’t be the last. Across the country, business and health insurance companies are pushing for more patient satisfaction metrics, whether they are how quickly phone calls are returned to how long a patient sits in a physician office waiting area.
Source: Forbes via Medicare Matters [7/3/13]
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Pharmacist Employment and Salary by Dispensing Format
[Dispensing Format Total Employment Average Annual Salary]
Mass Merchants with pharmacies 31,870 $117,990
Chain and independent drug stores 122,840 $116,980
Supermarkets and pharmacies 22,590 $111,040
Mail pharmacies 3,110 $109,640
Total 180,410 $116,288
Publication Source: Managed Care, July 2013
Data Source: 2012 National Occupational Employment and Wage Estimates, U.S. Bureau of Labor Statistics: March 2013
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What if CMS divulges how much it pays doctors?
Did you know that the CMS will make case-by-case determinations on releasing Medicare physician payments in response to Freedom of Information Act requests.
http://www.medicalpracticeinsider.com/news/what-if-cms-divulges-how-much-it-pays-you?email=MARCINKOADVISORS@MSN.COM&GroupID=90115
Meanwhile, the AMA cautions that unrestrained disclosure could be unfair to doctors.
Hope R. Hetico RN MHA
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Docs Need Increase in Minimum Wage, Too
While Congress entertains the idea of increasing the minimum wage, let’s not forget doctors who also need a pay bump.
http://www.thedailybeast.com/articles/2014/05/13/why-primary-care-physicians-need-a-minimum-wage.html?utm_source=Copy+of+Copy+of+Copy+of+Copy+of+Copy+of+Copy+of+5.1.14&utm_campaign=11713&utm_medium=email
Yes, doctors-primary care physicians (PCPs) who are receiving only a tiny fraction of all that money you’re now forced to fork over for health insurance.
At least, according to Princeton economist Uwe Reinhardt who has argued cogently for physician salary raises.
Dr. David Edward Marcinko MBA
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Reduce health costs?
http://www.kevinmd.com/blog/2014/07/reduce-health-costs-stop-focusing-physician-salaries.html
Stop focusing on physician salaries.
Donald
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Higher Hourly Rate
[Cardio Surgeon or Auto Mechanic? ]
It’s a sad situation when physicians earn significantly more money speaking about medicine than they do by actually performing complex, life-saving procedures.
http://www.medpagetoday.com/Cardiology/CHF/47087
On average, encounters with investment firms, pharmaceutical corporations, and/or device manufacturers regarding prescribing preferences or device choice generate reimbursement for the physician at a rate of approximately $500/hr; about the same as the rate that insurance companies reimburse physicians for chart review in malpractice cases.
Izak [Izzy]
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Avarice?
The AMA’s Forgotten Fight Against Physician Greed.
http://thehealthcareblog.com/blog/2015/09/10/the-amas-forgotten-fight-against-physician-greed/
Brent
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Highest Paying Jobs for Doctors
http://www.msn.com/en-us/money/topstories/the-15-highest-paying-jobs-for-doctors/ss-BBsE0u4#image=11
Dr. David Edward Marcinko MBA
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Survey Reports 2.9 Percent Average Increase in Physician Compensation for 2017
More than three out of four physician specialties had an average increase of 2.9% in median compensation from 2016 to 2017, according to a new survey conducted by AMGA Consulting, a healthcare consulting firm in Alexandria, VA. Compare this 2.9% increase with the rise in the cost of living in the United States (represented by the Consumer Price Index) which grew only 1.2% from July 2016 to June 2017, the Bureau of Labor Statistics reported.
The AMGA 2017 Medical Group Compensation and Productivity Survey included responses from 269 medical groups, representing 102,261 providers. Results of the survey showed that primary care physicians, medical specialists, and surgical specialists each had overall increases in median compensation, although some increases were historically better than others.
Source: John J. Murphy, MDLinx [8/4/17] via PMNews
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Physicians’ Median Base Salary is $195,842 for 2018
Glassdoor recently released an analysis of the highest paying salaries in the U.S. for 2018, excluding CEOs. Here are some key findings:
• Physicians have the highest paying job with a median base salary of $195,842.
• Pharmacy Managers have the second-highest paying job with a base salary of $146,412.
• Pharmacists have the third-highest paying job with a base salary of $127,120.
• Physician Assistants have the 7th-highest paying job with a base salary of $108,761.
Source: Glassdoor, August 15, 2018
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CMS Downgrade 2020
https://www.fiercehealthcare.com/practices/cms-proposes-changes-to-medicare-payments-mips-including-payment-cuts-for-some
Lou
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The Gender Wage Gap Among Physicians Was 28% This Year
Doximity recently released their annual ‘Physician Compensation Report.’ Here are some key findings:
• Physicians saw a 1.5% average increase in pay between 2019 and 2020.
• The gender wage gap among physicians was 28% this year, up from last year’s 25.2% gap.
• Milwaukee, WI has the highest average compensation for physicians at $430,274.
• Vascular Surgery (4.9% growth) is the specialty with the largest increase in compensation.
Source: Doximity, October 29, 2020
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CERTIFIED MEDICAL PLANNER®
Before engaging with the CERTIFIED MEDICAL PLANNER® material, I would have been like most of the public in not feeling sorry for highly compensated physicians. Once you get a peek under the hood of how these practices function and how every dime is fought for from insurance companies, my perception has dramatically changed.
For new physicians headed out of academia and into practices and hospitals – you better make sure to spend a bit of time figuring out which business model allows your discipline to flourish.
JOE
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Radiologists
While most health care professionals can rest easy knowing patients prefer treatment from people, radiologists are at unique risk of being supplanted by machines that can analyze complex data from MRI and CT scans more efficiently. But despite companies including IBM and GE working toward diagnoses by artificial intelligence, at least some radiologists will still be necessary for the foreseeable future to design algorithms and interpret results.
Jorge
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