Physician pay was rising before COVID-19. Here's how much—and what MGMA expects for the future

Overall physician compensation was on the rise—that is, until doctors began taking a financial hit from the COVID-19 pandemic.

The median compensation for established providers increased in most specialties over the course of 2019, according to the Medical Group Management Association’s (MGMA) 31st annual Provider Compensation and Production Report.

Primary care, specialty, and nonphysician providers all experienced growth in pay, according to the MGMA study of more than 168,000 physicians and non-physicians who contributed to the report.

Overall, primary care physicians saw a 2.6% increase from 2018 to 2019, reaching $273,437. 

Specialists and nonphysician providers also experienced slight increases in compensation during the same one-year timeframe, with pay rising 1% and 2.1%, respectively. 

Overall, those increases in compensation are down compared to the growth in pay physicians saw the prior year. Primary care physicians saw a 3.4% increase from 2017 to 2018, specialty physicians had a 4.4% increase, and advance practice providers had a 2.9% increase.

Over the last five years, total compensation for all providers increased at a rate between 5% and 9%, according to the report.

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Compensation for most physician specialties continued to increase, MGMA reported.

Urgent care physicians saw their pay jump 6.8% from $259,661 to $277,393 and pulmonary specialists also got a nice salary bump with compensation rising 5.5% from $385,024 to $406,245 in 2019.

The report, based on data from more than 6,300 organizations, found the most sizeable increase in compensation included the following medical specialties:

  • Psychiatry (general): 7.7%
  • Urgent Care: 6.8%
  • Pulmonary Medicine (general): 5.5%
  • Internal Medicine (general): 4%
  • Urology: 3.9%

Surgical nurse practitioners (NP) and surgical physician assistants (PA) also saw steady salary increases in 2019, rising 2.3% and 7.3%, respectively. 

Other nonphysician providers had only slight increases in compensation last year.

The report also found interesting geographic trends for how much physicians get paid. For example, primary care physicians earn the most in West Virginia, with nearly $200,000 more in total compensation than their counterparts in Vermont, the lowest paying state. 

The difference in surgical and nonsurgical specialist pay is even greater with physicians earning $260,000 more in the highest-paying states of South Carolina and Alabama, compared to their lowest-paid counterparts in Vermont and Maryland.

Expectations for the future

According to an April 7 MGMA Stat poll, 97% of medical practice leaders reported a drop in patient volume amid the COVID-19 pandemic.

A separate COVID-19 financial impact report by MGMA found that, on average, practices reported a 55% decrease in revenue and 60% decrease in patient volume since the beginning of the COVID-19 crisis. These significant impacts on medical practices of all sizes and specialties forced many to lay off and/or furlough staff. 

RELATED: Where are the states where docs earn the most? The South dominates

Geographic areas that have seen the greatest impact from COVID-19 shutdowns on patient visits and non-essential procedures and surgeries will take the biggest hit from lost productivity and associated impacts to physician compensation until patient volume return to normal, according to the report.

“With 1.4 million healthcare workers furloughed in the last month alone, this 2019 compensation data will serve as a baseline for benchmarking 2020 operations in the aftermath of the COVID-19 pandemic,” said Halee Fischer-Wright, M.D. president and chief executive officer, MGMA, in a statement.

COVID-19 has had a dramatic impact on the healthcare industry with productivity halting for many medical practices.

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Compensation models will look different in the near future based on shifting productivity and demands on physicians and the healthcare industry overall, Fischer-Wright said.

Moving forward, MGMA will consider adjusting the data collection to capture the "new norm" of medical practice operations, the organization said.

One bright spot in the news: Projections of significant physician workforce shortages throughout the country by 2030 will likely intensify the demand for physicians, which could drive compensation higher in spite of drops caused by COVID-19, MGMA said.

With almost all physicians current tied to productivity or collections-based pay models, the correlation between increased volume and higher pay will remain a trend. However, with volumes decreasing for most practitioners as a result of the COVID-19 crisis, compensation will also likely suffer, the report said.

Providers on salary-based contracts are shielded more from lost productivity, but their salaries are dependent on the financial viability of their organization.