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Medscape Physician Compensation Report 2014

Leslie Kane; Carol Peckham

April 15, 2014

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Over 24,000 physicians in 25 specialties responded to this year's Medscape Compensation Report and described their compensation, number of hours worked, practice changes resulting from healthcare reform, and adaptations to the new healthcare environment.

Slide 1.

As in previous Medscape surveys, orthopedists are the earning leaders, followed by cardiologists. Urologists and gastroenterologists are tied for third place. The lowest earners are physicians in HIV/ID, with primary care physicians and endocrinologists also in the bottom five. As in the past, those who perform procedures have the highest incomes compared with those who manage chronic illnesses. Earnings are for full-time work only. They include salary, bonus, and profit-sharing contributions. For partners, these are earnings after taxes and deductible business expenses but before income tax. They do not include non-patient-related earnings.

Slide 2.

It is interesting to see a small decline in compensation among some of the specialties involved in procedures and small increases among primary care physicians, which could reflect early changes in reimbursement resulting from the Affordable Care Act. The variations in compensation among all specialties between 2012 and 2013 are very small, however, and are probably not important yet. The decline observed in nephrology earnings could be due to greater revenues coming from income unrelated to patient care, as reported last year in a survey from the Renal Physicians Association.[1] While rheumatology showed a large increase, salaries in this specialty have been more stable in prior years.

Slide 3.

About half of all graduating physicians are now female, and 61% of female physicians are under 45 vs only 38% of men.[2] Compared with the 2010 Compensation Report, this year's respondents -- both male and female physicians -- report higher incomes. However, men are still making more money. "As increasing numbers of doctors start working regular set hours for large health systems, there's little variance in income based on sex," notes Judy Aburmishan, partner in FGMK, LLC, a Chicago firm that represents physicians and other providers.

Slide 4.

As in previous years' surveys and in keeping with other national data, the highest earners live in the North Central and Great Lakes regions and the lowest in the Mid-Atlantic and Northeast. The Bureau for Labor Statistics also reports that rural PCPs have higher earnings than those who live in cities.[3] This disparity might be attributed to less competition in smaller communities, which usually have to pay more to attract physicians.[4] The Medicare Modernization Act of 2003 increased Medicare rates for rural physicians, which might also play a role in the differences among regions. On the other hand, higher population concentrations and heavy competition in the Northeast may have resulted in lower compensation in this region. To make matters worse for urban physicians, the cost of living is also lower in rural areas, and one report said this translates to 13% more purchasing power in the country vs the city.[5]

Slide 5.

Those who are self-employed reported making more money, whether they are specialized or in primary care, although the differences may be mitigated depending on the type of practice (see next slide). The most common payment method for employed doctors is straight salary, although physicians increasingly also have to meet productivity targets. A New York Times article reported that 64% of positions to be filled last year were in hospitals, compared with only 11% in 2004.[6] In another recent Medscape report, nearly 49% of employed physicians were satisfied with their income, which could reflect that even if they were making less, the benefits of a regular paycheck and possibly doing less work for the same money might compensate for not being self-employed.

Slide 6.

Although (according to the previous slide) self-employed physicians make more than those who are employed, breaking down income by practice settings creates a more nuanced picture. Physicians in single-specialty group practices are the highest earners, while those in solo practices are third from the bottom, making an average of $51,000 less than those in groups. Physicians who work for healthcare organizations are the second highest earners. The lowest earners are in outpatient clinics. An AMA 2012 report found that 60% of physicians now work in physician-owned practices, with an upward trend toward large groups, whether hospital-employed or independent practices.[7] In any case, physicians are increasingly leaving private practice for salaried positions.

Slide 7.

In regard to feeling fairly compensated or not, it was a 50-50 split among all physicians who responded to the survey this year. Primary care physicians were only slightly more negative, with 52% saying they did not feel fairly compensated while 48% did. Considering the ongoing income disparities between primary care physicians and specialists, their having the same perception is somewhat interesting. There has been very little change in the responses to this question over the past 3 years.

Slide 8.

In this year's Medscape report, the perception of being fairly compensated does not correlate to actual compensation for many physicians. Orthopedists were the most highly paid physicians, but they fell below the middle of this list, with only 45% believing that they are fairly compensated. And although plastic surgeons were seventh among the top earners, at 37% they were the least likely of all physicians to believe that they are fairly paid. On the other hand, although dermatologists are not among the top 5 earners, they, more than any of the other specialists, believe that their compensation is fair (64%). Of interest, dermatologists also had the highest career satisfaction rating (see slide 25), and in this year's Lifestyle Report, they were also the happiest physicians.

Slide 9.

The growth in Accountable Care Organization (ACO) participation year-over-year according to Medscape surveys has been notable; in 2013, almost a quarter of physicians (24%) who responded were already in ACOs and 10% planned on joining one this year; in our 2012 survey, only 8% of doctors were either in an ACO or planning to join one. While fee-for-service and private practice are the most predominant forms of payment and practice, participation in ACOs is significantly higher than in the other alternative payment models, with concierge practice (also referred to as direct primary care) at 3% and cash-only at 6%. ACOs are designed to deliver improved care for patients, and within these settings there are various payment models, including shared savings programs,[8] advanced payment models (mostly for rural providers[9]) and the Pioneer ACO Model, which is for organizations and providers with experience in coordinating patient care.[10]

Slide 10.

When comparing newer payment models with survey results from 2011, there has been a dramatic rise in physicians choosing ACOs, with 24% of all physicians now employed in these organizations vs only 3% in 2011. Furthermore, 10% are planning on joining this year. In spite of considerable publicity, cash-only and concierge practices are still not significant payment models.[11,12] In the Medscape survey, participation in concierge practices increased from 1% to 3%. Still, although there were only 4400 concierge (or direct primary care) practices in 2012, they continue to gain support.[13] Glen Stream, AAFP Board Chair, said in May 2013, "[Direct primary care] is one option that is particularly well suited for small family medicine practices that are struggling financially in environments not yet supporting [the patient-centered medical home] with a viable payment model."[14]

Slide 11.

In this year's Medscape survey, 5% of employed and 15% of self-employed physicians said that they will not take new Medicare or Medicaid patients, with more employed physicians (69%) than self-employed physicians (57%) saying they will take both new and current patients. A quarter of both employed and self-employed are undecided. According to CMS, the number of doctors who opted out of Medicare tripled between 2009 and 2012, although the numbers were still relatively small (3700 and 9539, respectively).[15] CDC data showed that 35% of PCPs and 29% of specialists in 2010 were not accepting new Medicaid patients, and 27% of PCPs but only 10% of specialists were not taking new Medicare patients.[16]

Slide 12.

Private insurance still pays for about 63% of patient visits.[17] According to 2009-2010 data from the CDC, 89% of PCPs and 94% of specialists take private insurance. However, although Medicare is known to have lowered fees, private insurers are also paying less, particularly to small practices without any strong influence.[6] Robert Morrow, MD, a family doctor in the Bronx and a Medscape advisor, said he now receives $82 from Medicare for an office visit but only about $45 from commercial insurers. A quarter of physicians who responded to the Medscape survey said they will drop insurers who pay poorly but 39% said they would not. (This question did not apply to about a third of respondents.)

Slide 13.

According to Medscape survey findings, the use of ancillary services has increased slightly this year over last (21% compared with 19%). At the top of the list, a third of orthopedists offer ancillary services, which can include in-office surgical centers with pain centers, MRI, and physical therapy with orthotics and braces.[18] Anesthesiologists came in second at 31%, with most of their services involving procedures for postoperative pain.[19] Although not at the top of the list, 23% of family physicians provide ancillary services, which can include medication dispensing, weight-loss services, in-office diagnostic tests, nutrition counseling, cosmetic services, and alternative treatments such as acupuncture and massage. It is estimated that some primary care practices may be able to earn as much as 15% or more from ancillary services.[20]

Slide 14.

About 72% of respondents to this survey regularly or occasionally discuss the cost of treatment with patients. This has gone up from 68% in 2012. The remaining physicians either don't have this discussion or do not see patients. Of particular current interest is whether physicians are discussing the new health insurance exchanges. In a recent Medscape poll,[21] 38% of health professionals thought that physicians should be prepared to discuss these issues, and although 41% of respondents did not feel that physicians should be obligated, they did think that staff should be ready for such conversations. Just 21% said that only patients -- not physicians or their staff -- should research exchanges.

Slide 15.

Less than half (46%) of respondents to the survey spend 40 hours at most seeing patients each week, with slightly over half (51%) spending more time. (The remaining physicians see no patients at all.) A 2010 study in JAMA[22] found that after no significant change between 1977 and 1997 in the hours per week that physicians spend with patients, these hours decreased steadily from 54.6 to 51 between 1997 and 2007. The decline was seen regardless of gender or employment status, but it was largest for nonresident physicians under 45 and for those working outside of hospitals. The study authors attributed the decrease to a parallel 25% inflation-adjusted decline in fees between 1996 and 2006. They pointed out that some physicians may have compensated by increasing ancillary services at the expense of patient time. This study also found that time spent on patients by physicians working in relatively low-hour specialties, such as dermatology, pathology, and emergency medicine, changed by less than 1% during the past decade.

Slide 16.

Nearly 80% of anesthesiologists and intensivists claimed to spend 40 or more hours with patients. In fact, most physicians at the top of the list tend to be hospital-based. Pathologists are at the bottom of the list. Emergency physicians and dermatologists also rank low on spending more than 40 hours a week with patients. For emergency physicians, this might be due to the varying number of visits to the ER or time spent doing paperwork. Conversely, dermatologists, with their nonemergent patients, are more able to limit their patient hours. Office-based physicians such as family physicians, pediatricians, and psychiatrists also tend to be on the lower half of the list. In a 2005 study of family physicians, almost a fifth of their time was spent on patient-related work not involving care, such as writing up notes, making calls, and interpreting laboratory results.[23]

Slide 17.

In the Medscape survey, 40% of physicians reported seeing between 25 and 75 patients per week, 34% saw between 76 and 124, and 13% saw 125 or more. (The question was not applicable to 6% of respondents.) According to the CDC, the annual visit load for PCPs between 2009 and 2010 was 30% higher than for specialists.[16] In spite of payment reforms related to the Affordable Care Act, an organization's or practice's revenue will still be determined largely by volume generated by physicians, and therefore the pressure of seeing more patients will still exist. The optimal patient-panel size is difficult to set, but it is important to balance appointment supply and patient demand.[24]

Slide 18.

In this year's survey, 50% of primary care respondents said they spent 16 minutes or less with patients and about 48% spent more than 17 minutes, compared with last year's 55% and 42%, respectively, which suggest that patients may be getting slightly more attention from their PCPs this year. Hopes are being pinned on wider implementation of the patient-centered medical home (PCMH) as at least a partial solution to improving time spent with patients.[25] Although data are limited and findings on PCMH are mixed to date, an encouraging 2014 comparative study found that physicians in a PCMH intervention group experienced reduced time pressure because they could delegate administrative tasks, which freed up time for longer encounters and more detailed discussions with patients.[26]

Slide 19.

When internists, family physicians, and pediatricians were asked how many hours per week they saw patients in the hospital, 31% of internists reported 25 hours or more, compared with 19% of pediatricians and 5% of family physicians. The higher percentage reported by internists most likely reflects the rise in hospital medicine over the past decade. The Society of Hospital Medicine estimates that there are more than 40,000 practicing hospitalists, most of whom are internists, up from about 1000 practicing hospitalists 20 years ago.[27]

Slide 20.

According to this year's compensation survey, 35% of employed physicians spend at least 10 hours a week on paperwork compared with 26% of the self-employed. A 2005 study on family physicians reported that 55% of their time was spent with patients, with only 34 minutes (or 6.5% of their workday) spent on paperwork. Almost a fifth of their time was related to patient-related work not involving care, such as writing up notes, making calls, and interpreting laboratory results.[23]

Slide 21.

The authors of a 2010 JAMA study[22] pointed out that in spite of declining fees starting in 1995 and anecdotal reports of discontent, physician satisfaction levels remained stable between 1997 and 2010. This finding was supported by a review published in 2009, which found only a small decrease in satisfaction among PCPs.[28] When Medscape surveyed physicians this year on whether they would choose a career in medicine, the same specialty, and the same practice setting if they had to decide all over again, responses were slightly more favorable (58%, 47%, and 26%) than in 2011 (54%, 41%, and 23%, respectively).

Slide 22.

Current compensation levels do not appear to influence whether a physician would choose medicine again. The least likely to choose medicine again (plastic surgeons, orthopedists, radiologists, anesthesiologists) were also among the top earners. These specialists generally perform procedures and might perceive their incomes as declining under future regulations, which could have affected how they answered this question. Conversely, those who are on the low rungs of earnings (internists, family physicians, pediatricians, and infectious disease specialists) were in the top 5 for choosing medicine again.

Slide 23.

There was a wide variance in the percentage of physicians who would choose their own specialty again. At 77%, dermatologists were number one, although only 53% said they would actually choose medicine again. Internists were last on the list in choosing their specialty again (27%), followed in discouragement by family physicians (32%). Of note, however, internists had the highest percentage of those who would choose medicine as a career again (68%), with family physicians tied for second place with HIV/ID specialists at 67%.

Slide 24.

To determine general career satisfaction level, Medscape averaged the percentages of physicians who would choose medicine and their specialty again and the percentages of those who thought they were fairly compensated. After making the calculation, the most satisfied physicians were dermatologists (65%) and then psychiatrists (58%) -- a large gap between first and second place. The least satisfied, from the bottom up, were plastic surgeons (45%) and then neurologists and internists (47%).

Slide 25.

Despite the frustrations, most physicians find their careers deeply rewarding. Being good at their jobs (34%) and relationships with patients (33%) were cited most among those who responded. Twelve percent choose "making the world a better place." Simply being proud to be a doctor (6%) and making good money (10%) were less compelling factors. A small percentage mentioned other rewards.

Slide 26.

Over half (53%) of physicians who responded to the Medscape survey were still not sure about whether they would participate in health insurance exchanges, while 20% said that they wouldn't and only 27% said that they would. A recent survey from a major recruiter showed that even higher numbers of physicians would not participate. Reasons cited were lower compensation, higher workload, decline in quality of patient care and access, and reduced ability to make decisions.[29] The American College of Physicians has recently recommended reforms for both federally qualified health plans (QHPs) and Medicare Advantage programs, which include changes in drug formularies and ensuring that QHPs do not overly restrict physician networks.[30]

Slide 27.

Half of doctors anticipated that no change in income would result from health insurance exchanges, although 43% believe that their income will decrease and only 7% thought it would increase. Specialists who believe that they are most likely to see a decline tend to be those whose incomes rely heavily on procedures: Over 60% of anesthesiologists, orthopedists, urologists, and dermatologists anticipated a decline, whereas only about a third of PCPs believe that their incomes will be reduced. Such attitudes follow provisions in the Affordable Care Act intended to increase primary care income and reduce the number of unnecessary procedures. However, some private insurers in the exchanges are planning to reduce physician rates, particularly for those in smaller networks. In fact, anecdotal information suggests that some exchange plans are now offering $60 to $70 for an office visit of a complex nature, compared with a $90 payment from Medicare and $100 or more from a commercial plan for the same visit.[31]

Slide 28.
Slide 29.
Slide 30.

Author Information

Leslie Kane
Editorial Director
Medscape Business of Medicine

Carol Peckham
Director, Editorial Services
Art Science Code LLC
New York, New York

Disclosure: Carol Peckham has disclosed no relevant financial relationships.

References

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