Key Points
- Demographics affect income
- Earnings rose in every region and nearly every type of community
- Capitated contracts are up, but revenue down
The 2008 Medical Economics Exclusive Survey is your chance to find out. Conducted in March and April, the survey asked more than 175,000 physicians about
their compensation, productivity, practice size and setting, expenditures, and third-party payer arrangements, as well as
basic demographic data. For more details on the survey methodology, go to http:// http://www.memag.com/2008survey.
The following pages feature an analysis of the results, broken down into three major categories: earnings, productivity, and
malpractice premiums. Read on to discover what your colleagues earned last year — and how those earnings are affected by primary
care specialty, practice type, physician age, years of experience, and other factors.
Primary care reimbursement rose substantially last year based on respondents' data, but not all primary care specialties benefited.
While pediatricians enjoyed a 25 percent increase and family physicians' total compensation advanced 5 percent, the median
incomes of GPs, internists, and ob/gyns dipped slightly compared to prior year statistics.
Other sources confirm that primary care compensation jumped from 2006 to 2007. The Medical Group Management Association's
data (which excludes ob/gyns and FPs who deliver babies) shows that PCPs earned 6.3 percent more than they did in 2006. That's
twice the rate of increase for specialists. Similarly, Merritt Hawkins & Associates, a physician recruiting firm in Irving,
TX, saw a significant rise in starting salaries for FPs and ob/gyns in 2007. While Congress recently removed the specter of a 10.6 percent Medicare pay cut, the issue will have to be revisited in 18
months. Nevertheless, FP Robert L. Phillips Jr., director of the AAFP's Robert Graham Center for Policy Studies in Family
Medicine and Primary Care, is cautiously optimistic about the future. "I think primary care doctors will see some earnings
increases, even as other specialties may see declines," says Phillips, noting that the Medicare Payment Advisory Commission
has proposed further pay hikes for primary care, and that business groups support the idea of payments for coordination of
care.
Effects of demographics on income
What primary care doctors earn
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Observers offer various reasons for the 2007 increase. Kurt Mosley, vice president of business development for Merritt Hawkins,
views it as a simple matter of supply and demand: The supply of PCPs is down and the demand for them is up, he says, partly
because of an aging population and a rise in the number of births. Kenneth T. Hertz, an MGMA consultant in Alexandria, LA,
cites the increasing competition for scarce primary care doctors among hospitals and large group practices, which is driving
up salaries. Others point out that CMS increased reimbursement for evaluation and management codes in 2007. And Phillips notes
that the growing use of EHRs may be helping doctors better document office visits, leading to higher average charges.
Pediatrician Richard Lander of Livingston, NJ, who chairs the American Academy of Pediatrics' section on administration and
practice management, notes that many pediatricians have not enjoyed the big jump in income that our survey reveals. The cost
of giving childhood immunizations is higher than ever, he points out, and some practices continue to lose money on vaccines.
On the other hand, some of his colleagues are boosting their income by requiring cash payments for shots, bypassing third-party
payers. Pay for performance is also yielding "a dramatic increase in earnings" for some pediatric practices, Lander says.
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