Median compensation for medical specialists stalls

For the first time in five years, the rate of increase for primary care physician compensation outpaced that of specialists, according to a survey released by the Medical Group Management Assn.

Based on responses from 36,521 physicians at 2,000 group practices around the country, the MGMA survey found that median compensation in 2004 as compared to 2003 was up 3.1% for primary care physicians and 0.2% percent for specialists.

The median compensation for primary care physicians overall in 2004 was $161,816, up from $156,902 the previous year. Specialists' median compensation was $297,000, up slightly from $296,464 in 2003.

MGMA theorizes that lower reimbursements and higher costs, including labor and liability premiums for high-risk specialties such as neurology and obstetrics-gynecology, are the key reasons why specialist pay stagnated last year, said Dan Stech, MGMA's director of survey operations.

Also, the survey results suggest that revenue growth from ancillary services, which helped specialists counteract those cost pressures, might be waning, Stech said.

MGMA won't know whether its theories are on target until it finalizes its annual cost survey, which is expected to occur in October, Stech said.

A compensation survey released on Aug. 10 by the American Medical Group Assn. had a similar finding as MGMA's survey.

Alexandria, Va.-based AMGA found that a majority of specialties saw compensation increase at or just above the rate of inflation, while primary care specialties saw increases ranging from 6% to 8% after years of declining or minimal increases, said Tom Flatt, a spokesman for AMGA. That organization represents larger physician groups compared to MGMA's membership.

"We're not really sure why it's happening," Flatt said. "There could be any number of reasons for that," including higher liability premiums and pay-for-performance programs, and it remains to seen whether the trend is sustainable, he said.

But some primary care physicians say their pay is just as stagnant as ever, despite the MGMA and AMGA survey numbers.

Shirley Pigott, MD, cut back her family practice in Victoria, Texas, to two-thirds time five years ago for lifestyle reasons.

She initially intended to continue admitting pregnant patients to the hospital but found that her liability insurance premiums would not have changed that much even though she was working part time. "I found that I wouldn't be able to pay my malpractice [insurance] ... if I continued to admit to the hospital, do emergency care, surgeries and that kind of thing," she said, which led her to convert to a solely outpatient-based practice.

But some primary care doctors practicing full-time said they are making the same amount or less despite putting in more hours at the office.

"I'm making markedly less," said Donald Nofziger, MD, a solo pediatrician and president of the Academy of Medicine of Cincinnati. "In Cincinnati, we've seen reimbursement going down, and I can say that's pretty much across the board with some very few exceptions among [some of] the specialists."

Paul Hart, MD, a solo family physician in Sterling, Mass., has been working 10 to 15 more hours a week for the past year. But he is earning the same or less than before. His costs have grown at faster rates than his income, he said.

"I don't think [my pay] has gone up at all," Dr. Hart said. "My staff, of course, expects a raise of more than a few percentage points a year, and the cost of supplies, fuel and everything has been going up. So in real terms it may be a little bit down from last year."