Medical Organizations Report Continued Financial Losses

The average increase in physician compensation in 2010 was 2.4%, according to a survey by the American Medical Group Association. Despite compensation increases, the 2011 Medical Group Compensation and Financial Survey found continued financial losses in most regions of the U.S.

Only organizations in the Western region were near the break-even mark, down $27 per physician. The Northern region suffered the worst losses, averaging -$10,669 per physician, compared to -$9,943 per physician the previous year.

“In the face of the current economic climate, these medical groups continue to rise to the challenge of delivering the highest quality, coordinated care to the patients they serve,” said Donald W. Fisher, Ph.D., CAE, president and chief executive officer of AMGA, in a statement. “Much of the losses we see in 2010 are supplemented by other non-clinical revenue sources and/or funding from health systems with which groups are associated.”

Although almost 70% of specialties experienced compensation increases, the increases were marginal — an overall average of 2.4% — and a decrease from the previous year when more than three-quarters of specialties experienced an average increase around 3.8%.

The largest increases were seen among allergy (6.38%), emergency medicine (6.37%) and hospital-internal medicine (6.29%) specialties. Surgical specialties averaged around 3.8% in 2010, the same as in 2009. Although primary care specialties also experienced a compensation increase of 3.8% in 2009, the increases were less in 2010 at only 2.6%.

"The survey indicates that compensation continues to fluctuate only marginally for most specialties," said Fisher. "The modest increases seen this year reflect the negative impact of declining reimbursements, competition for specialists, the cost of new technology and other factors on practice revenues in most parts of the country."