Surprising Physician Compensation Influencer

Primary-care physicians based in the South are enjoying “greener” pastures than their fellow practitioners in other parts of the country. In fact, they’re seeing nearly $22,000 more green each year.

In a survey of nearly 60,000 physicians nationwide last year, the MGMA found that Southern primary-care physicians reported the highest median compensation with earnings of $216,170. Eastern physicians reported median earnings of $194,409. Southern states included in the study are Florida, Georgia, South Carolina, and Texas. Eastern states included are Maryland, Massachusetts, New York, and North Carolina.

Not only are Southern primary-care providers reporting higher median compensation than Eastern providers, they are also experiencing salary growth at a faster rate, according to the MGMA findings. The mean salary for Southern primary-care providers grew eight percent between 2009 and 2010. For Eastern physicians, the salary in 2010 grew only six percent.

The data comes from the MGMA's Physician Compensation and Production Survey: 2011 Report Based on 2010 Data.

What does this salary disconnect mean? And why is it happening?

MGMA consultant Jeffrey Milburn said in a statement that a “number of factors” come into play. But he said it could be as simple as supply and demand.

“A high level of competition between groups or specific specialties may provide an opportunity for payers to reduce reimbursement,” Milburn said. “In states where payers have little competition, reimbursement and subsequent physician compensation may be lower.”

Whatever the cause, overall, when compared to physicians of other specialties, primary-care providers are faring well in the salary department. Many specialists including anesthesiologists, radiologists, and gastroenterologists, reported decreased compensation in 2010. Not the case with primary-care providers.

For family care providers, the median compensation increased 3 percent. Internal medicine physicians experienced an increase of 4 percent. And pediatric/adolescent medicine physicians experienced an increase of 0.4 percent.

Overall, the news from this survey is good for primary-care providers. And, it may stay positive for providers for a little while to come - no matter where your practice is located.

That’s largely due to some of the current and proposed healthcare reform initiatives which may bring providers salary benefits.

Primary-care physicians not opposed to joining a hospital are going to start experiencing new opportunities for growth. A recent Washington Post article stated that “Hospitals are Courting Primary-Care Doctors.”

And that does appear to be the case. A new study conducted by search firm Merritt Hawkins, also found that the majority of physician jobs available are now based in hospitals.

Perhaps the most prominent reason for hospitals courting physicians is the possibility that ACOs will create a new healthcare model - one that rests largely on the shoulders of primary care physicians.

Under the current CMS Proposal, an ACO must include at least one primary-care provider. That means that hospital leaders might be loosening their purse strings to lure in these doctors with signing bonuses and salary increases.

For those in primary care choosing to remain in or join a private practice, the opportunities to do so may be lessening. However, the shortage in these physicians, and the belief that that shortage will continue, may play in the favor of independent practitioners. Again, it could be as simple as the theory of supply and demand.

No matter what ultimate effect healthcare reform has on primary-care providers, according to the MGMA survey, it looks like physicians in primary care can rest easy right now - and perhaps for at least a few years into the future.

Other states in the Eastern region included in the MGMA Survey are Connecticut, Delaware, Washington, D.C., Maine, New Hampshire, New Jersey, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia. Other states in the Southern region included Alabama, Arkansas, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, and Tennessee.