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MGMA: 'Mixed Movement' on Physician Compensation

John Commins, for HealthLeaders Media, June 16, 2011

Compensation growth for primary care and specialty care physicians was all over the board in 2010, and appeared to be determined as much by location as by area of medical expertise, according to a survey from the Medical Group Management Association.

"A number of factors may attribute to regional differences in physician compensation," Jeffrey B. Milburn, with MGMA Health Care Consulting Group, said in a media release. "The supply and demand for primary care or specialty physicians may influence compensation. A high level of competition between groups or specific specialties may provide an opportunity for payers to reduce reimbursement.  In states where payers have little competition, reimbursement and subsequent physician compensation may be lower."

The survey -- Physician Compensation and Production Survey: 2011 Report Based on 2010 Data -- found that median compensation for both primary care physicians and specialists was highest in southern states, with primary care physicians earning a median of $216,170, and specialists earning a median $404,000. By comparison, primary care physicians in eastern states earned a median $194,409, and specialists earned a median $305,575.

"Location desirability is another factor influencing competition and compensation," Milburn said. "Some areas have a much higher ratio of physicians to population, and one might think this would lead to increased competition and lower compensation. But, the usual laws of supply and demand aren't always at work in healthcare."

The survey results are consistent with those in a report last week from physician recruiters Merritt Hawkins, which showed that most job openings for physicians are in hospitals, while demand for private practice physicians is on the wane.

Among primary care physicians: internists reported median compensation of $205,379 in 2010, an increase of 4.2% since 2009; family practitioners reported a median of $189,402, an increase of 2.9%; and pediatricians reported their median compensation was $192,148, an increase of .39%. Since 2006, median compensation has risen 15.5% for family practitioners, 13.3% for internists; and 10.3% for pediatricians, the survey found,

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