Physician compensation increased by a median of 2.92% in 2018, according to a new survey from AMGA Consulting. That’s a big jump from the 0.89% increase in compensation the previous year, reflecting that demand for healthcare professionals is driving higher pay.
However, while compensation was up in 2018, productivity barely changed, up just 0.29% in 2018. That’s compared to a 1.63% decline in 2017. The work relative value units (wRVUs) compensation ratio increased 3.64% in 2018, while the compensation per wRVU ratio increased 3.09% in the year before.
“The 2019 survey shows that physician compensation in 2018 rebounded from a stagnant 2017,” Fred Horton, MHA, AMGA Consulting president, said in a statement. “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.”
Across primary care, compensation rose 4.91% in 2018, though family medicine and internal medicine saw bigger jumps––up 6.25% and 5.9%, respectively. Median compensation for pediatrics actually dropped nominally in 2018, by 0.04%.
“As healthcare organizations move from volume-based to value-based payment models, we’ve observed increased scrutiny on primary care performance,” Elizabeth Siemsen, AMGA Consulting director, said in a statement. “Medical groups continue to focus on delivering care in the most appropriate setting with the greatest efficiency—and often place primary care providers at the center of this strategy.”
The jump in primary care could be attributed to higher demand.
“In order to recruit and retain the primary care workforce, it may be that the market demanded a compensation course correction this past year,” Siemsen said.
Nurse practitioners enjoyed a 2.92% bump in compensation in 2018, while physician’s assistant compensation increased 2.5%.
Medical specialties saw a 3.39% increase in compensation last year, though psychiatry had the largest increase at 15.6%. Gastroenterology had a 0.4% decline, while cardiology compensation increased 4.4%, dermatology increased 3.3% and hospitalist compensation rose 2.1%.
Across the board, compensation was rising faster than productivity, and healthcare organizations will have to continue adjusting their operations to maintain their recruiting efforts.
“Data from this year’s survey shows compensation is increasing without an equivalent increase in wRVU production for many specialties,” Horton said. “This trend is causing organizations to absorb additional compensation expenses without balancing revenue from production increases. More intentionally transitioning to value-based care is one strategy medical groups can use to mitigate this trend, as it would help them better clarify their organizational strategies and objectives.”