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Analysis

AMGA: Physician Compensation Rose Significantly in 2018

By Christopher Cheney  
   August 30, 2019

Physicians in primary care specialties experienced a relatively high 4.91% increase in median compensation, survey data shows.

In 2018, physician compensation increased significantly and physician productivity rose slightly, according to an American Medical Group Association survey.

The AMGA has been conducting the compensation and productivity survey since 1986. The survey is designed to help medical groups evaluate and compare physician compensation and productivity levels as well as gauge trends. The compensation data can help medical groups make compensation-related decisions.

Median overall physician compensation in 2018 increased 2.92%, compared to a 0.89% increase in 2017. Physician productivity increased 0.29%, compared to a 1.63% decrease in 2017.

“The 2019 survey shows that physician compensation in 2018 rebounded from a stagnant 2017. While productivity also increased, it did not increase enough to surpass the decline we saw in last year's survey, meaning productivity still has not risen since 2016," AMGA Consulting President Fred Horton, MHA, said in a prepared statement.

The survey data, which was collected from 272 medical groups that employ more than 117,000 providers, includes several key data points:

  • Median compensation for primary care specialties rose 4.91% in 2018, compared to a 0.76% increase in 2017.
     
  • Compensation for primary care physician assistants rose 2.50%.
     
  • Compensation for primary care nurse practitioners rose 2.92%.
     
  • Overall median compensation for other medical specialties increased 3.39%.
     
  • Five of the highest specialties for mean compensation were orthopedic surgery, $591,245; gastroenterology, $527,998; general cardiology, $519,964; diagnostic radiology (MD non-interventional) $482,599; and urology, $469,755.
     
  • Five of the lowest specialties for mean compensation were urgent care, 283,787; internal medicine hospitalists, $293,252; neurology, $310,518; general obstetrics/gynecology, $340,388; and emergency medicine, $363,201.
     
  • To set physician base salaries, 93% of survey respondents said they relied on market salary data.
     
  • The use of work RVUs remained the dominant measure of productivity determining pay, at 79% of survey respondents. A work relative value unit is a non-monetary unit of measure that indicates the professional value of services provided by a clinician.
     
  • Other than productivity, the top five components of determining compensation were patient satisfaction, clinical quality and outcomes, citizenship, patient access measures, and care coordination.

Interpreting the data
 

The increase in overall compensation could have been an effort to offset the low compensation increase in 2017, Horton told HealthLeaders.

"Yearly compensation increases are approximate to standard 'cost of living' adjustments for physicians, so we expect to see them occur every year. In 2017, providers only saw an increase of 0.89%, which is well below the 2% to 3% we had seen in years prior. The 2.9% increase in 2018 is within the 'normal' range, albeit at the upper end. It may be that organizations in 2018 were attempting to compensate providers for a stagnant compensation increase in 2017," he said.

Supply-and-demand economics drove 2018 compensation higher for primary care specialties, Horton said. "The healthcare industry is currently experiencing a shortage of primary care physicians, so the demand for primary care is driving higher compensation."

The aging physician population is a major contributing factor to low productivity in recent years, he said. "In 2018, our survey showed there were more physicians over the age of 55 and nearing retirement than ever before in the history of this survey. Physicians at the beginning of their careers tend not to produce as much as those at the end of their career."

Three other factors likely contributed to low productivity in 2018, Horton said. "Employers are placing more of an emphasis on addressing burnout and lifestyle issues, which contributes to lower production. Physician assistants, nurse practitioners, and some other non-physician providers are starting to take on their own panel of patients, lessening the need for physician involvement. Burdensome electronic health record use is another factor contributing to productivity inhibition."

The 2018 data and information collected this year indicate trends for 2019 compensation and productivity, he said. "Thus far, we have seen no signs that indicate compensation will go above or below the 2% to 3% increase we typically see. We also do not expect to see significant increases in productivity, given ongoing retirements."

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


KEY TAKEAWAYS

Median overall physician compensation in 2018 increased 2.92% over the 2017 level, national survey data shows.

Physician productivity in 2018 increased 0.29%, compared to a 1.63% decrease in 2017.

To set physician base salaries, 93% of survey respondents said they relied on market salary data.


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