Physician Pay Increases to Decline in 2012, Hay Group Study Finds

PHILADELPHIA--(BUSINESS WIRE)--Physicians across all organization types can expect smaller salary increases in 2012 with salary increase budgets dropping to 2.5 percent, according to results from Hay Group's 2011 Physician Compensation Survey released today. That's compared to actual increases of 2.7 percent in 2011. Physicians working in group-based practices can expect to see higher pay increases of 3.2 percent in 2012, while those working in hospital-based settings can expect pay increases of 2.5 percent.

"At-risk pay can be a critical factor in driving performance at healthcare organizations"

When looking at physician specialists, those employed by hospitals can expect a 2.4 percent salary increase in 2012. That's well below the 4.5 percent salary increases group-based physician specialists can expect to see in the coming year. For hospital-based arrangements, primary care physicians can anticipate a 2.9 percent salary increase in 2012, while group-based primary care physicians can expect a 3.3 percent base salary increase.

"Primary care physicians are becoming the quarterbacks of hospitals," said Jim Otto, senior principal in Hay Group's healthcare practice. "The shortage of primary care physicians combined with the anticipated higher reimbursements for primary care and need to oversee the health of a broader population has led to pay increases for primary care physicians outpacing those for specialists within hospitals. Specialists will be the wide-receivers of healthcare, paid well for their craft and deservedly so."

When determining base pay structure, 50 percent of organizations set physician pay on an individual basis, 28 percent establish formal salary ranges, 18 percent use market rates and 1 percent use step-rate progression.

The prevalence of annual incentive plans decreased slightly among all physician participants in 2011 from their highest reported usage of 69 percent in 2010 to only 64 percent. Nearly one quarter of respondents (23 percent) reported that they have no annual incentive plans for physicians and do not plan to implement such plans.

"At-risk pay can be a critical factor in driving performance at healthcare organizations," said Otto. "While nearly one in four providers are not yet implementing annual incentive plans, the remaining three see the benefit or potential benefit of linking pay to performance measures. If designed correctly, annual incentive plans will have profound positive effects on culture, behaviors and the success of the organization."

Measures for determining incentive payouts continue to be dominated by quality and patient satisfaction, both in the individual measurement (66 percent report quality as a component and 62 percent report patient satisfaction as a component), and the group performance measurement (52 percent and 47 percent, respectively).

Study depth and methodology

Hay Group's Physician Compensation Survey has been conducted as an independent survey by Hay Group for over a decade. The survey and subsequent reports cover 144 physician specialties, including 35 pediatric specialties, 30 non-physician provider positions, and 19 medical directors. Data is reported as of May 1, 2011.

Hay Group has a unique collection and analysis process for physician data, which provides a deeper breakdown of compensation. This is different from most other physician compensation surveys in the marketplace as Hay Group's competitors' collection methods combine aspects of compensation together into a single figure. Hay Group is committed to providing robust and specific information so our clients can make better, more informed compensation decisions.

About Hay Group

Hay Group is a global consulting firm that works with leaders to transform strategy into reality. We develop talent, organize people to be more effective, and motivate them to perform at their best. With 84 offices in 48 countries, we work with more than 7,000 clients around the world. Our clients are from private, public, and not-for-profit sectors, across every major industry and represent diverse business challenges. For more than 60 years, we have been renowned for the quality of our research and the intellectual rigor of our work. We transform research into actionable insights. We give our clients breakthrough perspectives on their organization and we do it in the most efficient way to achieve the desired results. Our focus is on making change happen and helping people and organizations realize their potential.

For more information on Hay Group's healthcare practice, services or this study, please contact Colin Owens at [email protected] or 800-776-0486. To arrange an interview, please contact Andrea Friedman at [email protected] or 212-584-5476.

Hay Group
Colin Owens, 800-776-0486
[email protected]
For Hay Group
Andrea Friedman, 212-584-5476
[email protected]