Like most doctors, Jeb Teichman looks forward to opening his doors to patients each day at Jeffersonville Pediatrics, his small Prospect, Ky., practice. But in 2008, when rising costs and dwindling reimbursement hit hard, he was almost forced to close them.
"We had a disastrous year," recalls Teichman, who almost quit practicing medicine entirely in favor of a consulting job. "My costs were going up, my reimbursement was stagnant to going down, and I was seeing a lot more Medicaid patients than I used to. You can't afford to see more patients like that."
Then a local hospital called with an offer to incorporate his small practice into a larger healthcare organization.
"It was a tough decision for me," says Teichman. "It really came down to 'Do I really want to hang up my stethoscope?' I was glad the hospital came through."
Today, Teichman's practice is thriving and he is better able to focus on providing high-quality patient care because he doesn't have constant financial stresses in the back of his mind.
"It's a lot easier to focus on patients when you don't have to worry about business things," he says. "And although my reimbursement is productivity based, I don't worry about having to see a certain number of patients per day to generate income, so I can implement quality improvements."
As doctors like Teichman know, the state of physician compensation is shifting. Going forward, the pressure of increased overhead and decreased reimbursement is pushing many physicians to increase patient volume. Meanwhile, emerging reimbursement models focused on quality and outcomes might paradoxically add to the volume-driven pressures physicians already are facing.
These shifts beg the question: How do physicians keep up?
Today's compensation challenges
The results of our annual Physician Compensation Survey, which drew responses from 1,766 physicians in the second quarter of this year, highlight some key financial challenges.
* Check out our slide show to view compensation data for primary-care physicians and specialists; culled from our survey of more than 1,700 doctors in every specialty.
Practice-based docs are working harder than ever: 70 percent of physicians said they are clocking in 41 hours or more per week, but in spite of all that hard work, about half (49 percent) of physicians said they were disappointed with their compensation. Only one quarter of physicians, when asked about the difference between their current income and the previous year's income, reported an increase.
Financial pressures are coming from many places.
"The economy is absolutely affecting the amount of compensation practices are earning," says Martin Shehan, senior consultant with Healthcare Strategy Group. "As inflation costs go up, our overhead costs go up. It is the cost of supplies and materials and those types of things."
MGMA Consultant Ken Hertz says many practices are tapped out from having to see more patients to make productivity quotas.
"How many patients can a doctor see in a day?" says Hertz. "Is seeing more patients really providing the care that patients want or the care that doctors want to provide?"
The pressure to meet productivity benchmarks to offset reimbursement cuts urged psychiatrist Kirsty O'Donovan, formerly employed by a large managed care medical group, to change her compensation plan.