Primary Care Salaries Exempt from Law of Supply and Demand

HealthLeaders Media Staff, June 22, 2009

If you have a clogged sink, the money you pay a plumber to unclog it will depend—in part—upon how many plumbers there are in your area, and how many sinks they're already working on.

The formula looks something like this: Fewer plumbers + many clogged sinks = higher labor costs. It's the simple law of supply and demand and it is almost universally applied in our capitalist system with the notable exception of physicians in general and primary care physicians in particular.

Maybe it's the buzz about patient-centered care, medical homes, and the renewed emphasis on the gatekeeper function in coordinating healthcare. Or, maybe it's because there aren't that many of them. Whatever the reason, a new study by physician recruiters Merritt Hawkins & Associates affirms that primary care physicians are in greater demand than any other type of doctors.

The Irving, TX, firm bases its findings on more than 3,200 physician recruiting assignments it conducted in 47 states from April 1, 2008, to March 31, 2009. In that time, the company fielded more requests for family physicians than for any other type of doctor. Requests for primary care doctors—family physicians, internists, and pediatricians increased 23% over the previous 12-month period examined in the survey.

Despite growing demand, 2009 Review of Physicians Recruiting Incentives shows that huge salary disparities continue to exist between primary care physicians and subspecialties. The average salary offered to family physicians in the Merritt Hawkins study was $173,000, the lowest of any specialty. By comparison, cardiologists were guaranteed average base salaries of $419,000 a year, and orthopedic surgeons were guaranteed $481,000.

Those compensation figures are consistent with other studies, like the Medical Group Management Association's recently released Physician Placement Starting Salary Survey: 2009 Report Based on 2008 Data. The MGMA study found that median starting salaries for all primary care physicians grew by 7.4% between 2005-2008, to $150,000, while the median starting salaries for all specialists grew by 25% for the same period, to $275,000.

Ted Epperly, MD, president of the American Academy of Family Physicians, says the salary differential between primary care physicians and subspecialists exposes a fundamental flaw in the nation's healthcare delivery system. "It's a perversely incented system that overvalues procedures and imaging and undervalues the complex mental thinking needed to keep people well," he says. "We have a total reactive sick care system instead of a proactive healthcare system."

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