MGMA: Recession meant mixed bag for 2009 physician compensation

The Medical Group Management Association has released its annual Physician Compensation and Production Survey. This year's 2010 Report Based on 2009 Data reveals that while the recession and other factors have certainly affected medical practices, the particulars vary greatly among specialties.

According to the survey of nearly 60,000 providers across more than 110 specialties, median compensation in 2009:

  • Rose 2.8 percent in primary care specialties
  • Declined 1.1 percent in OB/GYN
  • Decreased 0.2 percent for invasive cardiologists
  • Remained flat in hematology/oncology, with only a 2.2 percent increase since 2005, due in part to reduced reimbursement for administering drugs
  • Increased 12.2 percent in dermatology, partly attributed to elective, self-pay procedures
  • Increased 7.7 percent in ophthalmology, likely related to laser refractive surgery and other non-insured services
  • Rose 25.5 percent more for specialty-care physicians in non-hospital-owned practices than for hospital-owned groups

"Despite a convergence of economic factors, employers' and payers' increased commitment to preserve the ability of primary-care physicians to do their important work has allowed their compensation to keep pace with inflation," said William F. Jessee, MD, FACMPE, president and CEO of MGMA. "However, the continued threat of cuts to Medicare payments and their impact on private insurance reimbursement to all physicians impedes practices' ability to deliver quality care to an ever-expanding patient population."

Other industry surveys have echoed the importance of physician compensation in these turbulent economic times. In the recently released American Medical Group Association/Cejka Search 2009 Physician Retention Survey, respondents ranked market-based compensation (65 percent), income guarantee (61 percent) and signing bonus (42 percent) as their top three recruitment strategies. Market-based compensation (70 percent) led the list of critical retention strategies, followed by productivity bonus (60 percent) and flexible schedule (34 percent).

"When it comes to physician recruitment and retention, compensation is a critical factor physicians consider before accepting a new position or leaving their current practice," said Lori Schutte, president of Cejka Search. "Based on the changing marketplace, healthcare reform could add to the financial pressure from new physicians looking for guaranteed base salaries and difficulty retaining mid-career physicians who are motivated by the productivity-based model. Competition will be even greater between hospitals and medical groups for the target pool of physicians, and could make it necessary to revise or create new incentive programs."

To learn more:
- see this piece by the Medical Group Management Association
- check out MGMA's In Practice Blog post
- learn more about the Cejka Search/American Medical Group Association Physician Retention Survey