Grow Your Income

November 1, 2009

Our 2009 Physician Compensation Survey reveals general dissatisfaction - and wide divisions between specialists and primary care docs. Get all the details and advice on ways to earn what you deserve, despite the downward trend.


At Colorado Springs Health Partners, an increased focus on preventive care and disease management has brought with it the need for providers to spend more time with each patient.

But what kind of “provider” is appropriate for that duty? The roughly 100 doctors at the 11-site multispecialty group are already stretched thin, juggling hospital rotations and more complex patient problems. So the practice is turning increasingly to nurse practitioners and physician assistants - nonphysician providers, sometimes called midlevels, or, (less diplomatically) “physician extenders” - to “spread a physician further,” explains the group’s CEO, Debbie Chandler.

The main goal is to improve patient care by letting physicians focus on more complex patient issues while NPs and PAs handle more of the day-to-day patient complaints typical in primary care, Chandler says. But because midlevels cost far less than primary-care physicians - perhaps as little as half - the move certainly makes financial sense, too.

That’s why practices large and small, feeling the sting of the primary-care physician shortage combined with the need to see more patients, are similarly turning to midlevels to spread their own physicians further.

This trend is one reaction to the financial pressure that continues to mount in primary care. According to our fourth annual Physician Compensation Survey, some practice owners are also considering drastic changes to their practice models, while others are looking to sell, retire, or work as employees. And still others are, like Colorado Springs Health Partners, seeking ways to increase revenue at lower costs.

Employed physicians, meanwhile, are considering how to negotiate for better pay.

We polled more than 1,000 physicians, 61 percent of whom were primary-care docs, to find out what they are making and how they feel about it. Let’s see what they had to say.

(*Editor’s note: To compare last year’s figures read: Getting More - Our Annual Physician Compensation Survey.)

Perils of ownership

This year’s survey revealed rising frustration over income, especially among owners of practices who continue to struggle with declining reimbursement rates and soaring costs. For example, a majority of practice owners described their income as disappointing. No wonder: about four in 10 owners say their pay last year was less than it was the year before, with more than a quarter claiming a drop of more than 10 percent. Only 26 percent of practice owners saw income gains.

Now compare that with how employed physicians are faring: 38 percent saw increased income last year; 20 percent absorbed decreases. Is it any surprise, then, that healthcare policy and economics experts are noticing a renewed trend toward owners selling their practices to hospitals and health systems, becoming employees in the process?

For an increasing number of physicians, the risks of entrepreneurship seem too great compared with the prospective rewards. Only about one in five practice owners made more than $300,000 last year - about the same number as brought home less than $100,000. Many owners, meanwhile, are finding themselves struggling to stay in business. Only 28 percent of owners say their practices are “thriving” while the rest had serious doubts about their long-term viability, calling their survival prospects at best “mixed,” if not “shaky” or “poor.” Seven percent are in this latter category, saying they may have to close their doors in the next one to three years.

Primary-care vs. specialists

There continues to be a clear and deepening disconnect, meanwhile, between primary-care physicians’ incomes and those of their specialist counterparts. Specialists, for example, are six times more likely to earn more than $300,000 a year. A quarter of specialists earned that much; most made more than $175,000. On the other hand, more than a quarter of primary-care doctors have not cracked six figures, and only one in four cleared $175,000, or more.

But that gap doesn’t exempt specialists from the practice owner unrest. A majority of both specialist and primary-care practice owners said their net income was “disappointing.” And these dismal trends have some physicians - primary care and specialists alike - considering taking surprising risks.


Although nearly 60 percent of primary-care physicians said they would continue business as usual in the next five years, 18.5 percent are considering “radically changing” their operations model, and nearly a quarter are thinking of closing, selling, or retiring.

Supplement your practice

One source of primary-care physicians’ income unrest stems from a shift over the last few decades in many doctors’ priorities, says Brian McCartie, vice president for business development for Cejka Search, a physician and healthcare executive search firm. As more women have entered the field, there has been an increased need for schedule flexibility. Similarly, new docs tend to have different work patterns, spending more time with patients and wanting more time with their family or for vacations, he says.

There’s more of an expectation for a work-life balance, McCartie says, but “unfortunately, the payer systems aren’t set up for balance.”

It may be hard to imagine seeing more patients during the day, and you have likely done what you can to find efficiencies and cut expenses.

“Certainly many people can be more efficient, but then it gets to the point where you push so hard, you’re impacting quality,” says Jeffrey Milburn, an independent consultant with MGMA Health Care Consulting Group who has a special interest in physician compensation plan development.

But there are ways to bring in more cash, for both practice owners and employed docs alike.

One possibility is the integration of nonphysician providers, experts say.

Milburn suggests practices find ways to be better compensated for the patients they see. Nonphysician providers allow doctors to see more complex and higher-paying patients. “If it’s done correctly, it will really take the physician off the chart in terms of efficiency,” he says.

Travis Singleton, executive vice president of marketing at national recruiting firm Merritt Hawkins & Associates, says more physicians are beginning to recognize that a qualified, experienced nonphysician provider “is worth her weight in gold.” “We are going to go that way more out of necessity,” he adds.

Physicians can also take more advantage of hospitalists, Milburn says. Many physicians are finding they can make more money seeing patients in the office, rather than doing rounds at a couple of hospitals, he says.

But, if you opt for a hospitalist, Milburn says, don’t squirrel away those extra hours. If you used to start your day at 8 a.m. for hospital rounds, start at 8 a.m. at the office so that you’re actually seeing more patients.

There’s also the trend of more hospitals being willing to pay for call, Milburn adds, which may help some docs pick up some extra cash.

In the hunt for better pay and more consistent hours, more doctors are also opting to become hospitalists themselves, says McCartie. They can make $30,000 to $40,000 more than a primary-care physician, and they don’t have to go through the rigors of building a practice, he says. Further, their time is dedicated in shifts, ensuring that when they are off from work, they are really off.

Hospital employment

For those that have had it with the hassles, hospital employment is becoming a more attractive model, experts say.

Most of you just want to get back to doing what you do best - being doctors, says Singleton. “The overwhelming voice we are getting back is that they are seeking shelter from the business of medicine,” says Singleton.

The model of more physicians opting for hospital employment seems to be working better now than in the past, he says, and both sides can stand to benefit. Physicians seem more willing today to sacrifice the independence (and at times higher salary) of private practice for the security and easier schedule of hospital employment.

Hospitals have historically not billed well, but that is changing, McCartie says.

According to Milburn, employed physicians may also see an opportunity to negotiate for higher pay or a more attractive compensation package. But if you’re ready to do some bargaining, be prepared.

First, have a good idea of what the surveys are saying about average salary. Consider the region as well as the specialty. You may also try to get a good idea of how the hospital system comes up with its salary figures to determine if you’re being evaluated correctly, Milburn advises.

Practice owners looking to recruit new doctors may also have a tough time in this market.

“You are going to have to offer an attractive package, and it’s not always dollars,” Milburn says.

Of course, the compensation must be competitive, but consider offering other benefits, such as covering moving expenses, helping with loan debt, or allowing for part-time work schedules. And don’t lose sight of the importance of lifestyle and the community. This means, for example, don’t court a city lover out to the country, Milburn cautions. A physician who is not a good fit with your practice or your town is more likely to leave regardless of your compensation package, and turnover is costly. Milburn concludes, “I always say the bottom line is your ability to retain physicians.”

(*Editor’s note: If you are looking for raw survey data, here are survey results broken out by question, response, and percent.)

Sara Michael is an associate editor at Physicians Practice. She can be reached at sara.michael@cmpmedica.com.

This article originally appeared in the November 2009 issue of Physicians Practice.