Physician compensation up nearly 3%; productivity, collections flat as costs rise

Most doctors saw a similar increase in compensation last year as they had in 2015, with an average raise of 2.9 percent across all specialties reported in the American Medical Group Association’s (AMGA) annual medical group compensation and productivity survey. Productivity, however, remained flat, and the move to value-based incentives in compensation continues to be slower than anticipated.

The survey collected responses from 269 large multispecialty groups and integrated health systems representing more than 102,000 providers. Most of the participating organizations were associated with a health system (48 percent), with a smaller share from physician-owned practices (29 percent). 66 percent of the participating organizations are classified as not-for-profit corporations or foundations and 72 percent have no academic affiliation.

The biggest increases in median compensation between the 2016 and 2017 surveys were recorded among:

  • Ophtamologists: 7.7 percent increase to $414,996
  • Cardiac/thoracic surgeons: 7 percent increase to $690,000
  • Hematologists/medical oncologists: 6.7 percent to $444,766

Only a few specialties saw a drop in median compensation between the two surveys. The biggest change was for emergency physicians, which saw a 2 percent decrease to $348,178 after reporting a 9 percent jump in compensation the previous year. Other specialties which saw a decline were general surgery, orthopedic surgery and anesthesiology.

As for what’s determining base salary, the survey found a continued reliance on market salary data, with 92 percent listing it as one of the factors in deciding a physician’s compensation.

“Market salary data has become a driving determinant in physician base salary, and its importance has steadily increased over other factors, interim AMGA President and CEO Ryan O’Connor, MBA, said in a press release. “The topic of compensation arises in nearly every conversation I have with our members and on most event agendas we organize. The findings in this survey are critical to medical group leaders as they make decisions impacting their organization’s financial performance.”

Some 107 organizations responded to a question about what factors they use in basing compensation on a physician’s production. Most (83 percent) base those kinds of plan on work relative value units (RVUs)—which the AMGA called the with 24 percent using net collections as a factor. Respondents were allowed to pick more than one option.

For incentive and discretionary compensation, patient satisfaction (69 percent) was the most common determinant, followed by individual financial goals (50 percent) and clinical outcomes (50 percent).

When judging productivity, however, the survey found some troubling signs, with work RVUs remaining relatively flat at the same time that costs continue to rise and 51 percent of specialties report a decrease in median net collections.

“These trends are driving enhanced efficiency and consolidation, but the cost curve will only bend so much,” Tom Dobosenski, president of AMGA Consulting. “With 61 percent of groups responding that some of their physicians’ compensation was based on the achievement of value-based measures, the move to value-based incentives is happening, albeit at a slower pace than anticipated. However, value-based incentives do not lessen the economic pressures on medical groups, as they do not necessarily mean reductions in compensation.”