Physician Earnings: Modest Increase but Frustration Remains

Carol Peckham

Disclosures

April 21, 2015

In This Article

The Payers

Medicare and Medicaid

Under Medicare, a number of initiatives have been put in place to increase the application of value-based payments. CMS is in the process of phasing in mandatory pay-for-performance incentives and penalties for all physicians. Under Medicare, a number of initiatives have been put in place to increase the application of value-based payments. CMS is in the process of phasing in mandatory pay-for-performance incentives and penalties for all physicians. It is important to note that Congress has just repealed the notorious sustainable growth rate (SGR). The bill will freeze Medicare rates at pre-April levels through June, and then raise them 0.5% in the second half of the year. They will continue to increase 0.5% each year from 2016 through 2019. At the same time, Medicare compensation will shift from fee-for-service to pay-for-performance.

Even before this legislation was passed, 79% of employed and 64% of self-employed physicians said they will continue taking new and current Medicare or Medicaid patients, which is up from their responses last year, when 69% of employed and 57% of self-employed physicians said they would take these patients. Little change over the 2 years was observed in those not taking Medicaid or Medicare at all. There was, however, a decline among undecided physicians, from 25% of all physicians last year, regardless of employment status, to 14% of employed and 20% of self-employed physicians this year. This decline, coupled with the increase in those taking Medicaid/Medicare patients, suggests that more doctors who were undecided last year have opted to take these patients.

Private Insurers

Private payers are also contributors to the current compensation pandemonium. In a Medscape report on insurers conducted in 2014, well over half (58%) of physicians received less than $100 from private insurers for a new-patient office visit. When asked whether they would drop insurers who pay poorly, 22% of physicians said they would and said they 35% would not. (The question was not applicable to the remaining survey respondents.)

The ACA and the Health Insurance Exchanges

Compared with last year, fewer physicians say they will participate in health insurance exchanges. For example, the highest percentage of participants are family physicians, still only 28% and down from 33% last year. This year, 24% of family physicians said they were not participating, up from 18% in the 2014 Medscape report. Over half are still not sure. Participation varied widely by specialty (Figure 4), with the fewest physicians generally being from hospital-based specialties or those for whom the exchanges would be unlikely to apply.

Figure 4.

Participation in health insurance exchanges by specialty.

Physicians were asked what impact health insurance exchanges would have on their income. Many physicians may have already felt their effect. PCPs are less pessimistic than specialists when considering the impact of health insurance exchanges on their income. Seventy percent of family physicians believe that their incomes are likely to stay the same or even increase with health insurance exchanges, compared with 61% of specialists. In addition, 30% of family physicians believe that their income will decrease, compared with 39% of specialists. Those most likely to anticipate a decrease tend to be in surgical or surgery-related specialties. Fewer physicians who treat chronic illness expect a decline (Figure 5).

Figure 5.

Physicians who expect earnings decrease from health insurance exchanges.

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