Finance: Getting More - Our Annual Physician Compensation Survey

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.”

Blair concurs, saying, “It’s been pretty well documented that cognitive specialties don’t fare as well as procedural specialties,” he says, and offers a quick history lesson. “The original idea was that CT scanners and MRIs are expensive equipment, so you’ve got to factor in those costs for reimbursement. Now the more ‘things’ you do, the more you get paid; the less ‘things’ you do, the less you get paid.”

Rather paradoxical in light of what medicine is all about; “Or what people would like,” says Blair.

Anatomy of a paycheck

This year, we asked physicians a bit more about what makes up their take-home pay beyond straight salary. Nearly half of respondents (47.24 percent) receive no bonus at all. Of those that do receive bonuses, nearly two-thirds (64.4 percent) report that it ranges between 1 percent and 10 percent of their total salaries. The numbers shrink rapidly from there: 14.85 percent of the total respondents claim 11 percent to 25 percent of income as bonus money, 3.82 percent receive 26 percent to 50 percent in bonus form, and a lucky three people claim that more than 50 percent of their pay packets are stuffed with bonuses (unless said bonus is completely contingent on productivity, as in sales, which would heap quite a stress load on those “lucky” three).

My mom, the doctor

According to the U.S. Health and Human Services report, “Physicians Supply and Demand: Projections to 2020,” nearly half of all physicians completing their training through programs of graduate medical education each year are women.

That’s significant, because most women approach their careers differently than men. The large portion of new female doctors is changing not only primary care, but the business of medicine in general.

Women are more likely to choose non-surgical specialties than men are because a hospitalist or emergency physician has a set schedule and no call - both necessary perks for managing the family, which remains largely in the hands of women, despite significant female entry into the nation’s work force over the past generation or two. Female physicians also are much more likely to job-share or work part-time.

We found ourselves curious about how the gender issue plays out in our own survey, so this year, we asked respondents to indicate their genders. Our results show about a 60/40 split between males and females, respectively.

Interestingly, the “Did Not Respond” crowd swelled for the 46- to 55-year-old set. But consider that this age group’s college time was smack in the middle of the
“I Am Woman, Hear Me Roar” years, so it’s possible their “nunya beeswax” attitude is a vestige left over from those gender equality trail-blazing years.

Women tend to stick with the same practice longer than men, with about one in 10 female physicians reporting she’s been in her current practice for 11 to 15 years, compared to just 3.23 percent of male physicians. Men, of course, dominate the “21-plus years” tenure category at 33.87 percent (women: 1.92 percent), but that has much to do with how male-dominated this field used to be.

But that’s all changed. “The ranks of the younger primary-care docs are dominated by women; that’s where primary care is headed,” says Mosley. “According to the AMA, they’re less productive. They’re not lazy; they have a different methodology.”

They also have much to do beyond doctoring. Mary Craig, a primary-care physician with Jarrettsville Family Care in Jarrettsville, Md., has been practicing medicine for 10 years. She works a 30-hour work-week - on paper - at the two-physician practice, which is owned by another female physician, Linda Walsh. Jarrettsville Family Care is the only primary-care practice in this small town (pop. 2,750), so of course they’re quite busy. Unfortunately, like everywhere else, reimbursements sag while expenses mushroom. But they’re the lucky ones, says Craig. “We both have spouses who work and do well financially. I could not pay back my school loans and raise a family with the salary I’m earning.”

To be fair, women don’t do all the child-rearing these days. With more male/female parity than ever before in family duties, male doctors are picking the kids up from soccer, too - sometimes all on their own. When asked if he ever had to juggle work and family needs with his career as a physician, Jade Norton, a family care physician at Eagleridge Family Medicine in Pueblo, Colo., responded, “Ohhhh yahhh. I have three small children, and I’m a single 42-year-old dad.”

Blessed are the not-so-meek

Our survey shows that for the most part you’re busy but not frazzled, although there are variations to this theme. “What we see is an increase in morale,” Mosley says. “[Primary-care physicians] all felt like second-class citizens; that is changing. They’re getting asked to dance again.”

Our survey certainly reveals fewer wallflowers. Last year, 13.6 percent of partner respondents were afraid they would have to close their practices within the next five years. This year, only 3.6 percent of surveyed partners are feeling discouraged enough to considering stopping the practice of medicine. That 10 percent seems to have shifted up a notch to the “mixed” category - a tad less pessimistic.

Granted, there’s still much work to do, and it would sure be swell if most physicians could mark the “robust - my practice is thriving and my margins are solid” box. But that means changing - a scary concept to many. It can be done, though. Family-practice-doc-turned-hospice-specialist Marsh did it. The joy of practicing medicine resonates in his voice as he describes how fulfilling hospice work is to him. “I go out to people’s homes, and you see what’s really going on in their lives. You see why they are the way they are,” he says. “We’re not just ‘death angels.’ We work as a team - the nurses, the chaplain, the doctors, everyone. We help the whole patient.”

Marsh’s stance is that many physicians unwittingly self-sabotage their own happiness with the very traits that help them become good doctors: autonomous, perfectionist, hard-working. “Some of the expectations that we put on ourselves limit our abilities,” says Marsh. “We’re very independent, which is part of our problem.”

It’s a fine balance, using these common traits advantageously. Indeed, Norton believes in good ol’ hard work. He and his partner do everything they can to make their family practice as accessible and attuned to their patients’ needs as possible. This means an open-access scheduling model, which he says encourages patients to come to his office, rather than an urgent care clinic, emergency room, or retail clinic. He relies on hospitalists for his admitted patients (except for children, but this only happened twice in the past year). “Using the hospitalist service has allowed me to see more patients in the office vs. rounding in the hospitals,” says Norton. This, of course, increases his volume.

Norton also believes in keeping a tight focus, saying, “I don’t believe in increasing revenue by using a lot of unnecessary ancillary procedures.” Most doctors seem to agree with him on this, by the way. This year, we polled physicians on whether they supplement their incomes with ancillary services. About 85 percent said uh-uh, not happening. For the few that do, 9.0 percent do some sort of in-house diagnostic testing, 3.4 percent perform minor surgical procedures, and a scant 1.9 percent sell health products.

Jaundiced eyes regarding ancillary services come from other perspectives as well. “A concern we’ve always had is that they’re trained to be a family-care physician; we expect them to do that,” says recruiter Mosley. “It all goes back to access. If they’re doing these other procedures, it takes away their access.”

Not only that, it’s often just not worth it, says Apostol. “When you try to add an ancillary service, some of the insurance companies start restricting your ability to offer them in-house,” he says. Because of this, he explains, “so many of the ancillary services you potentially could do are not financially feasible to do; some are even in the negative. So why bother?”

This is not to say that ancillary services have no place in a primary-care practice; certainly many of you have successfully incorporated such extra offerings into your normal scope for the benefit of both yourselves and your patients. But that’s the key word for success: scope. Straying too far from your core competencies can hurt your bottom line.

Other gut-wrenching changes may be easier to fantasize about than implement, for legitimate reasons. Norton has considered going to a cash-only practice model, “but I don’t think that would be accepted in my community of 100,000 - yet,” he says. Who knows when or if he will decide to make this radical shift in providing patient care? Maybe soon, maybe never.

As for Medicare, Norton’s stance is regretful, resolute, and increasingly common. “You can’t pay the bills if your payer mix includes a large percentage of Medicare or Medicaid,” he says. Any more cuts, and he’s outta there.

Be all you can be

Does Norton have all the answers to what ails primary-care physicians? Certainly not for everyone. But for Norton himself? Absolutely. Kudos to him, Marsh, and all physicians who devote thought to how they want to practice and then put those thoughts into action.
Too many of today’s physicians seem caught in the goo of inertia. Case in point: Roughly speaking, half of our survey respondents (46.21 percent) are partners in their practices, with the rest employed (53.79%). However, a disturbingly large chunk of the partners - about four in 10 - are not happy with their situations.

Consider also that more than three-fourths of all respondents - half of whom are partners - say they plan to keep on schlepping to work ad nauseam; only 7.63% plan to make some radical changes. And although it’s a small slice, get this: According to our survey, more physicians reported they’re actually planning to close (5.57 percent) rather than pursue some alternative way to practice medicine (join a larger group: 4.82 percent; be acquired by a hospital: 2.69 percent; start your own practice: 2.56 percent).

You - and only you - have the power to increase your own job satisfaction, if you can move beyond the defeated lethargy afflicting many physicians because of the currently untenable healthcare model. Takes guts, but think of all the inner glory awaiting you. So perhaps it’s time to take some chances, even if many of the issues plaguing primary care today are as difficult for you to control as the whims of a headstrong hurricane. Hone in on and nurture what you can change and help feed the sprout of optimism evidenced by our survey. It’s your collective resolve and subsequent actions that can shift trends and evoke change to make the profession you love everything you want it to be.

Shirley Grace is an associate editor at Physicians Practice. She can be reached at sgrace@physicianspractice.com.

This article originally appeared in the November 2008 issue of Physicians Practice.