Four years ago — after 18 years of solo family practice in rural, Medicare-heavy Zebulon, N.C., with a patient panel of 15,000, and overhead pushing 70 percent — Stephen Marsh was just plumb tuckered out. That was partly because he believed in getting to know the whole patient, which took up precious time. “My colleagues called me a dinosaur because I would take time to ask about grandchildren,” he says.

But Marsh loves being a doctor, and has never once considered bailing out. Still, something had to give, and he surely didn’t want that to be his own well-being. He had to find a way to honor himself and his calling, yet stay solvent and sane.

Today, focusing purely on hospice and palliative care, Marsh is happy. He’s got time to ask about grandkids and hobbies. He makes house calls. Overhead is no problem because it’s not his problem; he’s employed by the nationwide short- and long-term rehabilitation provider, HCR ManorCare.

Marsh knows his worth as a physician, that he’s needed and valuable to the greater medical community. And our third annual Physician Compensation Survey, in partnership with national recruiting firm Merritt, Hawkins & Associates, suggests this can-do attitude may be on the rise. Let’s examine the results.

Income trends

In 2006, primary-care physicians saw their salaries jump 11 percent to $161,000. For 2007, salaries rose more modestly to $171,500 — an increase of about 6.5 percent. Still, not bad.

There are some subtle indications that these doctors are a bit more satisfied than they used to be with the money they make. When asked to describe their net incomes as “excellent,” “appropriate,” or disappointing,” here’s what we found:

• Internists, at 56.25 percent, are still the most dissatisfied with their incomes. But this collection of unhappy healers shrank by nearly 10 percent since last year.

• In contrast, family-practice docs collectively kicked their satisfaction level up a notch: This year shows a general upswing in earnings satisfaction, with 43.75 percent marking either “appropriate” or “excellent” — an 11.05 percent rise since last year.

• Heads up, though, about pediatricians: Traditionally the least money-focused, pediatricians may be showing some signs of unrest. In 2007, 13.4 percent of them described their income as “excellent,” more than any other group of primary-care physicians. This year, that figure dropped to 7.94 percent, with the difference sinking down to the “appropriate” column.

Overhead, while still vexing many physicians, is slightly less onerous compared to the previous year, when more than 62 percent of respondents reported overhead above 50 percent. Just over 55 percent of respondents currently report their overhead to be eating more than half their net medical revenues. What’s more, one in five put overhead between 40 percent and 50 percent — a nice improvement over last year, when only 16.5 percent said this. The Medical Group Management Association says that a healthy overhead for a medical practice should be no more than 50 percent, so the change in reported figures bodes well.

And, even better, some physicians have pulled themselves out of the quicksand. Last year, 5.2 percent were drowning in overhead of 80 percent to 100 percent; that number has dropped back to 2.7 percent, which is comparable to the first year we ran the survey (2.4 percent).

Unfortunately, frustration regarding primary-care earnings vs. specialist earnings persists. This is nothing against the specialists themselves; primary-care docs recognize and appreciate the additional training a specialist must go through. “Not too many people have had the residency training for bypass surgery; that’s tough, and you should be compensated properly,” says Stephen Blair, a family physician with Austin, Texas-based Capital Family Practice.

Rather, it’s the way the insurance payments have played out. Christopher Apostol, a partner with Evans Medical Group in Evans, Ga., echoes the general consensus in primary-care circles: “My main frustration is that the only way we can increase our revenue is by seeing patients, because we’re not procedure-based.”