Average Physician Compensation Jumps 3.1%, But Salaries Aren't Thriving

“Empty pockets never held anyone back. Only empty heads and empty hearts can do that.” —Norman Vincent Peale

I was about 20 years old, working in the yard with my father one weekend, when I summoned up the nerve to ask him how much money he made as a physician. He candidly told me that he and his medical partner, my uncle, had “a pretty good” past year. After expenses, the two doctors had split about $210,000. That was 35 years ago.

Adjusted for inflation, dad would be earning over $305,000 today practicing internal medicine. That’s well ahead of the income for today’s “primary care doctors.”

According to results from the new 2016 American Medical Group Association Medical Group Compensation and Productivity Survey, while the financial story is mildly better for doctors in group medical practices today, when factoring in the expenses of life and business, incomes remain mostly stagnant.

Based on the analysis of 92,000 group doctors from 138 medical specialties, 74% of physician specialties realized compensation increases in 2015. The average pay increase for these doctors last year was 3.1% — similar to the 2.8% bump in 2014. But even in this age of relatively low inflation, those salary numbers aren’t thriving.

Summary findings include:

• Primary care physicians saw an increase of 3.6% in annual compensation — up from a 0.3% increase in 2014.

• Other medical specialties saw an average increase of 3% — very similar to the 3.2% increase in 2014.

• Surgical specialties saw an average increase of 3.6% — up from a 2% increase in 2014.

The medical specialties that experienced the biggest increases in compensation in 2015 were Emergency Medicine (9.6%), Cardiac/Thoracic Surgery (8.1%), Cardiology (6.9%), and Hypertension and Nephrology (6.7%).

“Once again this year, we see that physician compensation in general has remained relatively flat, with an average increase around 3%,” said Donald W. Fisher, PhD, AMGA president and CEO. “We’ve seen peaks in certain specialties, and dips in others, and much of this reflects the cyclical nature of healthcare economics. However, with the movement to value-based incentives for care, the delivery model is changing to a more team-based approach. It will be interesting to watch compensation trends over the next few years as these value-based models become more prevalent.”

Here is the latest median annual compensation for various medical specialties, according to AMGA:

Family Medicine……………………………………$234,706

Internal Medicine…………………………………. $249,588

Pediatrics/Adolescent — General…………….......$235,257

Allergy/Immunology……………………………......$294,245

Cardiology — General……………………………...$483,653

Cardiology - Cath Lab……………………………..$584,118

Dermatology………………………………………...$434,520

Endocrinology……………………………………....$242,202

Gastroenterology…………………………………...$505,194

Hematology/Oncology…………………………......$416,738

Hospitalist — IM……………………………………...$275,363

Hypertension/Nephrology……………………........$329,750

Infectious Disease………………………………….$261,630

Neurology…………………………………………....$284,751

Psychiatry………………………………………….....$254,942

Pulmonary Disease………………………………....$352,462

Rheumatologic Disease…………………………....$251,913

Urgent Care………………………………………….$264,197

Cardiac/Thoracic Surgery…………………….........$645,112

Emergency Medicine…………………………….....$355,180

General Surgery……………………………….........$413,824

OB/GYN……………………………………………....$333,231

Ophthalmology……………………………………....$385,149

Orthopedic Surgery………………………………....$582,056

Otolaryngology……………………………………....$419,818

Urology……………………………………………….$441,836

Anesthesiology……………………………………...$416,563

Diagnostic Radiology……………………………....$490,339

Some other pertinent points in the AMGA survey are:

• As to ownership of the medical groups, 39% are owned by a health system, 31% by the doctors, and 17% by a hospital.

• Regarding the legal makeup for the groups, 65% are not-for-profit corporations or foundations and 18% are professional corporations.

• As to minimum number of hours per week a physician must work to be considered full-time, 69% are 36-40 hours and 26% are 31-35 hours.

• When it comes to compensation measures on production-based plans for physicians, 79% use work RVUs and 26% use net collections.

• As to other incentives and discretionary compensation measures, 71% use patient satisfaction, 49% use clinical outcomes, and 43% use individual financial goals.

• Again, this year the southern region of the nation tends to have the highest compensation by specialty, the eastern region had the lowest compensation.