Primary care salaries on the rise

Mature markets demand higher pay

Primary care physician income has increased with greater managed care market penetration, while the salaries of hospital-based specialists has decreased, according to a study by the University of Chicago’s Health Research and Educational Trust.

Between 1985 and 1993, for each 1% of additional managed care market penetration, primary care physician income rose by $2,263.50, according to the study. However, income for subspecialists increased by only $530.40 during that period. In contrast, the real incomes of radiologists, anesthesiologists, and pathologists (RAPs) fell significantly in markets with higher managed care growth.

On average, managed care penetration rose by just over 15% during the eight-year study period. This translates to gains of $34,000 for primary care physicians and $8,000 for medical specialists, but losses of more than $30,000 for RAPs.

"The federal government has recently sought to impose limits on the number of medical school graduates who seek a residency in a specialty area," said Carol J. Simon, PhD, associate professor, Institute for Government and Public Affairs and School of Public Health, University of Illinois in Chicago. "If our results are correct, then we would expect medical school graduates to make adjustments as to what specialty they decide to enter, as they anticipate changes in earning opportunities."

For instance, the biggest drop in subspecialty slots in the National Residency Matching program has been anesthesiology, where only 18% of potential slots were filled in 1996, compared to 73% in 1991.

"Combined with evidence on physician earnings, this suggests that the physician labor market is adjusting to economic signals, without resorting to direct regulation of slots or prices," says Simon.