Salaries not keeping up with production

Three surveys, same results

The theory was sound: Improve production and efficiency, and physicians will have more money to take home at the end of the day. But the reality is different. Three new surveys show that while production among physicians continues to increase, compensation is rising more slowly, if at all.

The American Medical Group Association (AMGA) of Alexandria, VA, released its annual Compensation and Productivity Survey last month. While the data from the 242 responding medical groups showed very modest increases in compensation for physicians (see chart, p. 147), gains in productivity in most cases outpaced salary growth.

For example, while internists had a 2% increase in compensation, they posted productivity gains of more than 7%. The largest discrepancy among those included in the chart occurred among orthopedic surgeons, who had a 2.28% compensation increase, but a 18.19% productivity increase.

There were a few specialities that bucked the trend; general pediatrics had a slightly higher increase in compensation than production, as did family medicine. Among the specialists not included in our table, allergists, urgent and emergent care specialists, and diagnostic radiologists also saw compensation rise more than production.

The annual Medical Group Management Association (MGMA) Physician Compensation and Production Survey: 1998 Report Based on 1997 Data came to many of the same conclusions as the AMGA survey. However, compensation increases over the previous year among physicians at the 1,736 responding practices were less or nonexistent. For instance, while AMGA respondents in urology had a 7.26% compensation increase, the MGMA respondents in that specialty reported a 3.6% decrease in compensation. None of the specialties listed in the MGMA portion of the tables show increases.

Like the AMGA survey, production among MGMA respondents was up far more than compensation. Most striking are urology practices, which had a decrease in median compensation of 3.6% and an increase in production of 14.5%.

The third survey, Ernst & Young’s 1998 Physician’s Benchmarking Survey also found that increases in professional charges were higher than increases in total compensation.

The trend was most pronounced for primary care physicians, who saw productivity increase 16% in 1997, while cash compensation rose only 6%. Surgical specialists saw the least pronounced difference — a 3% increase in compensation compared to 4% in production. And procedural specialists actually had a net gain of 1%, or a 7% increase in earnings compared to a 6% increase in gross charges.

The actual dollar figures for primary care physicians and specialists are available only to those purchasing the report.

According to Sue Cejka, whose St. Louis human resources firm Cejka & Co. sponsors the MGMA survey, this trend is a further evidence of physicians getting squeezed between rising costs and declining fees.

What could change the trend of flat or no growth in compensation, according to the survey — particularly for primary care practices — is physicians taking on more risk. Once half or more of their practice is at-risk managed care, compensation rises, states the MGMA survey.

Editor’s note: For more information on the surveys, contact: American Medical Group Association, Compensation and Productivity Survey, $250 for nonmembers and $175 for members. Call (703) 838-0033, ext. 326 for ordering information

Medical Group Management Association, Physician Compensation and Production Survey: 1998 Report Based on 1997 Data, $200 for members, $250 for affiliates, and $300 for nonmembers. Contact (888) 608-5602 for ordering information.

Ernst & Young 1998 Physician’s Benchmarking Survey, $1,200 for nonparticipants, $600 for those who agree to participate in next year’s survey. Contact Richard Cederholm at (213) 977-3426.