Studies Show that Physician Assistants Boost Physician Compensation

April 25, 2014

The significant value of physician/physician assistant teams is confirmed by a recently published MGMA report.

It makes economic sense to add physician assistants and nurse practitioners to your healthcare team. The actual test of cost effectiveness and efficiency is when the whole is much greater than the sum of its individual parts. The significant value of physician/physician assistant teams is supported in a report recently published by the Medical Group Management Association (MGMA).

There are lots of good reasons to hire physician assistants in your practice. The improvements in the effectiveness and efficiency they bring to practices, not to mention the very real monetary incentives, are without a doubt harder to ignore as more data reveals how these providers function within medical teams.

The 2004 MGMA Cost Survey Report showed that the number of full-time equivalents of PAs, NPs, and other members of the healthcare team increased in virtually every type of single specialty group, and it showed that more practices were using these types of providers. Interestingly, the 2004 data showed that physicians in single specialties had higher compensation when they employed PAs, NPs, and others. The initial data did not demonstrate this advantage for family practices. 

With a new MGMA report, we see these trends are accelerating given the rapid expansion of healthcare due to the Affordable Care Act.

The MGMA Data Dive 2013: Physician Compensation and Production Module showed that physician compensation is still higher in all of the single specialties, now including family practice.   I can see how my own practice and experience corroborates the results of the study. I work in a busy plastic and reconstructive surgery practice with a single surgeon.

He covers two hospitals while I work mostly at one, taking care of our burn patients as well as a wide variety of plastic, reconstructive, and craniofacial surgery.  I handle the lion’s share of admissions, discharges, rounding, wound care, and inpatient and outpatient consultations. This frees my surgeon partner to focus on what he is skilled at doing and enjoys doing: surgery.   We are able to handle a significantly higher caseload by divvying up the responsibilities of our practice between us. We do a substantial amount of surgery at our community hospital, which houses our burn unit. This dramatically increases his income as well as gives me an opportunity to earn a significant compensation based on my higher level of productivity. 

Our situation is different from other physician-PA teams. I have my own S-corporation and don’t work directly for him. I do all of my own billing for first assist, consultations, and outpatient follow-up visits. My physician partner and I contract with the burn medical group to staff the burn unit at our hospital in addition to our growing private practice. While this type of arrangement is not the way a majority of PAs work, a significant number of PAs and healthcare team members are opting to incorporate and practice in teams in similar arrangements.

If my surgeon partner and I were not a team, he would not be able to perform as many surgeries, as he would have to do all of the pre- and post-surgical work required of a busy surgical practice. I’m thankful that my surgeon partner gives me the opportunity to benefit directly from the work that we do through direct reimbursement. These types of productivity incentives are important to teams to keep the efficiency and effectiveness moving in the positive range.

Our partnership ensures that I work very hard to keep him busy, and I benefit from this arrangement directly by getting paid for the work that I do. The significant downside for me is one that physicians have always experienced: When I don’t work, I don’t get paid. I’m all right with this, and it is a great incentive to work hard!
The MGMA report goes on to talk about the changing environment that the Affordable Care Act has caused in the healthcare system. The significant shortage of physicians and physician specialists will ensure that we need a team of clinicians to do the work required in rapidly expanding covered population more than ever.

There is no end in sight for demand for physicians, PAs, and others.

This blog was provided in partnership with the American Academy of Physician Assistants.