Who is Chief of Income?
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In recent years, medicine has displayed a split personality when it comes to income. Primary care physicians by and large
have struggled to keep up with the cost of living while specialists have enjoyed nice raises.
That distinction is beginning to disappear, though, as the earnings virus in primary care infects the entire profession. It's
evidenced in the latest Medical Economics Continuing Survey, which sampled office-based MDs and DOs in 23 specialties. Total median compensation for all respondents
uncharacteristically plateaued in 2004 at $180,000, the same as it was in 2003. It was a familiar feeling for primary care
doctors, who repeated their performance in 2003 and 2002, netting $150,000. However, eight of 19 nonprimary care specialties
also were in the doldrums, either losing ground or failing to gain any. Nephrologists, for example, made $220,000 in 2004,
down 4 percent. Invasive cardiologists gained no ground on the $400,000 earnings they posted in 2003. Meanwhile, physicians
in four other specialities registered gains of 2 percent or less.
Specialists enter an earnings lull, too
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These discouraging trends uncovered in our survey are mirrored for the most part in the latest income survey from the Medical
Group Management Association. Median compensation in 2004 rose 3.1 percent for internists (including hospitalists), FPs, and
pediatricians, and only 2.2 percent for other specialists, who usually surpass their primary care peers in MGMA surveys, too.
Both increases trailed the 2004 inflation rate of 3.3 percent.
Why is everybody falling behind? You can blame the usual suspects. One is continued penny-pinching by payers. Medicare gave
doctors a mere 1.5 percent fee hike in 2004. Private payers were almost as stingy, raising fees on average by 2.2 percent,
according to the Center for Studying Health System Change, a policy-research organization in Washington, DC. 
The Midwest is best when it comes to income
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And private payers are finding it easier to force their fee schedules down your throat. "As insurance companies merge, the
ability of individual doctors to negotiate reasonable compensation is more limited," says Robert Doherty, senior vice president
of government affairs and public policy at the American College of Physicians. If you weren't paying attention, Anthem and
WellPoint Health Networks consummated a mammoth merger last year, and now UnitedHealth Group is set to swallow up PacifiCare
Health Systems.
With third-party payers enjoying the upper hand, it's not surprising that the growth in practice revenue—what you collect—has
been weak. It increased only 3 percent in 2004 for all respondents. However, there's another possible reason why collections
have slowed—cost-shifting to patients in the form of higher copays, coinsurance, and, most significantly, deductibles (see
"Collecting just got harder" in the May 20, 2005, issue of Medical Economics, available at http://www.memag.com. The difficulty of getting patients to pay is already a red-flag issue for hospital chain HCA, and physicians won't be spared
either, says consultant H. Christopher Zaenger in Barrington, IL. "Receivables," says Zaenger, "are becoming a bigger problem."
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