Primary Care Compensation Makes Headway

Physician salaries aren't really immune to supply and demand—it only seems that way. Primary care compensation is slowly catching up. But specialist salaries will always be ahead.

A report out this week on physician recruiting and compensation suggests the laws of supply and demand don't apply to the healthcare sector.

Merritt Hawkins, the Irving, TX-based physician recruiting firm, issued its annual summary of 3,120 physician and advanced practitioner recruiting assignments it conducted across the nation over the past year.

For the ninth straight year, family physicians were the most-recruited specialty. In fact, six of the top 10 most-recruited specialists were in primary care, including family physicians, internists, hospitalists, nurse practitioners, OB/GYN, and pediatrics.

In most sectors of the economy, the people with skills that are most in demand would expect to receive higher compensation. Despite the demand for primary care, the average salary offered to primary care doctors recruited through Merritt Hawkins was $198,000. By comparison, the average salary for urology—No. 14 on the Top 20 most recruited list—was $412,000.

As much as we loathe sports analogies, it has been too frequently noted that primary care physicians have become the quarterbacks of the healthcare delivery team. So why are they still getting paid like the back-up punter?

"Well, that's a touchy subject, and it is multifactorial," says Don Beckstead, MD, program director for Altoona (PA) Family Physicians Residency.

"One of the factors is that the specialists' lobby has been pretty strong over the years," Beckstead says. "I don't want to get myself in trouble with my specialist colleagues, but they are very protective of their right to make a lot of money. The presumption is, 'I do a fellowship and spend extra years in residency; therefore I should make more.' "

"I would argue that family docs these days are seeing more and more difficult patients and handling more and more difficult patients and therefore should be reimbursed accordingly. We obviously as a group think we should make every cent as much as the specialists."

Compensation on the rise
Dr. Beckstead may be on to something.

However slowly, the healthcare sector is responding to market demand for primary care, with that demand more and more reflected in compensation. For example, in 2010 Merritt Hawkins reported that family physicians were the No. 1 most-recruited physicians, with annual compensation averaging $175,000. That average grew to $198,000 in 2015, a 13% increase.

A 13% increase over five years might not seem like a lot until you compare it with other specialties. In that same time frame, general surgeons' average compensation went from $336,000 to $339,000, an increase of 0.9%; urology average compensation went from $453,000 to $412,000, a decrease of 9%; and orthopedic surgeons' average compensation fell from $521,000 to $497,000, a decrease of 4.6%. (Dermatology bucked the trend. Average compensation rose from $331,000 to $398,000, an increase of 20%.)

Beckstead has noticed a substantial increase in compensation for family physicians in the last few years.

"My graduates were seeing $135,000 a couple of years ago, and now it's about $180,000 to start. It is increasing but it is slow to catch on," he says. "Some of the specialists salaries I have seen have at least not accelerated as quickly as ours have. I don't ever expect them to be equal, but at least the gap is closing, and that is a good sign."

Some caveats apply here, as with any data. These are rough numbers taken from one source, and they could be subject to considerable exceptions for any number of reasons. But these compensation trends match what is happening in healthcare right now: a transition away from inpatient volume, acute care, and fee-for-service, and toward population health and managing chronic illness.