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Good News for Primary Care?

Elyas Bakhtiari, for HealthLeaders Media, August 14, 2008

It seems that all we hear about primary care these days are dire warnings about low reimbursement and physician shortages, so I want to start out with some good news for a change: Compensation for primary care physicians increased nearly three times as much in 2007 as it did in 2006, and it outpaced compensation increases for specialists (combined) for the second straight year.

That sounds great, but here come the caveats. The numbers only sound impressive because the bar has been set so low. Primary care compensation increased about 6.3%, according to MGMA's latest Physician Compensation and Production Survey. That is the biggest increase primary care doctors have reported in years.

Specialty physicians also reported a bigger jump in compensation than last year, but again, that's because the previous increase was so low (less than 2%). Although some specialists did very well—invasive cardiologists, anesthesiologists, urologists—overall, compensation for specialty physicians barely kept pace with inflation.

So does this mean primary care is starting to "catch up" to specialty care?

"We are seeing a market adjustment where the market is starting to move back toward placing importance on primary care," says Crystal Taylor, MHA, MGMA's assistant director of survey operations.

Supply and demand forces, as well as CMS' efforts to increase reimbursement for evaluation and management codes, are certainly helping out, she says. But whether this is the beginning of a major market shift or just temporary "good news" remains to be seen.

The increases certainly aren't enough to reverse the shortage problem. Take internal medicine. With the latest increase, median compensation for internists is about $190,547. But a physician with the same training could earn $197,872 as a hospitalist, and probably work fewer hours.

Almost any other specialty a physician can choose when leaving medical school is more lucrative than primary care, and as long as that is the case, the shortage will only get worse.

Although the market is beginning to recognize the value of primary care, its problems can't be fixed in increments or by market forces alone. If supply and demand were the only factors influencing how much physicians are paid, I'd venture to guess that we'd be seeing double digit increases for primary care at this point.

But there's only so much practices can do to increase what they pay primary care doctors under a fee-for-service system. Their services simply aren't valued, and it's going to take a major change in the healthcare reimbursement system to fix primary care's problems.


Elyas Bakhtiari is a managing editor with HealthLeaders Media. He can be reached at ebakhtiari@healthleadersmedia.com.
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