Physician Compensation Physician Compensation TrendsTrends

Paul Evans DO, FAAFP, FACOFPPaul Evans DO, FAAFP, FACOFPDean and Professor of Family MedicineDean and Professor of Family Medicine

ObjectivesObjectives

• Review Compensation Trends 2002-2007Review Compensation Trends 2002-2007

o Primary Care Physician Primary Care Physician

o Specialty Care PhysiciansSpecialty Care Physicians

• Present Trends Impacting Physician PracticePresent Trends Impacting Physician Practiceo Physician ResponsesPhysician Responseso ““Hot” Specialties (now and long-term)Hot” Specialties (now and long-term)

• Discuss Physician Recruiters (friend or foe?)Discuss Physician Recruiters (friend or foe?)

ReferencesReferences

Compensation data and graphs Compensation data and graphs excerpted from 1.8.2009 SOMA excerpted from 1.8.2009 SOMA

GA-PCOM presentation by:GA-PCOM presentation by:

Douglas T. Cardinal, RN, FACHEDouglas T. Cardinal, RN, FACHEPresident, DT Cardinal ConsultingPresident, DT Cardinal Consulting

(770) 622-5799(770) 622-5799dcardinal@dtcardinalconsulting.comdcardinal@dtcardinalconsulting.com

IntroductionIntroduction

Factors influencing practice decisions:Factors influencing practice decisions:

o High student loan burdenHigh student loan burden Loan debt in excess of $200,000Loan debt in excess of $200,000

o ““Life style” vs. compensationLife style” vs. compensation predictable call , weekends offpredictable call , weekends off time off to have familiestime off to have families collegial nature of larger groupscollegial nature of larger groups

Lower Reimbursements- Now What?Lower Reimbursements- Now What?

Physician ResponsePhysician Response

Increasing “production”Increasing “production”2000 FP Relative Value Unit = 3,8342000 FP Relative Value Unit = 3,8342007 FP Relative Value Unit =4,600 (2007 FP Relative Value Unit =4,600 (up up

20%)20%)Compensation for ER and house callCompensation for ER and house callMedical DirectorshipsMedical DirectorshipsEmbracing “alternative” health and lifestyle Embracing “alternative” health and lifestyle

modalitiesmodalitiesCAM, AcupunctureCAM, AcupunctureMedical “spas”, aesthetic proceduresMedical “spas”, aesthetic proceduresConcierge medicineConcierge medicine

Lower Reimbursements- Now What?Lower Reimbursements- Now What?

Institutional ResponseInstitutional Response

Hire physicians into hospital Hire physicians into hospital owned or controlled medical owned or controlled medical groupsgroups

Changing physician Changing physician compensation formulas from compensation formulas from fixed salary or gross charges to:fixed salary or gross charges to:Net collections less actual and Net collections less actual and

allocated expensesallocated expensesCompensation per Work Compensation per Work

Relative Value Unit producedRelative Value Unit produced

Lower Reimbursements- Lower Reimbursements- Now What?Now What?

Government ResponseGovernment Response

AuditingAuditing physician-hospital compensation physician-hospital compensation relationships of all kinds – more denial paymentsrelationships of all kinds – more denial paymentsCMS OIGCMS OIG

Compensation must be “reasonable” and “fair Compensation must be “reasonable” and “fair market value”market value”

Physician Physician recruitment incentivesrecruitment incentivesPayments for relocation - actual move of Payments for relocation - actual move of

practicepracticePhysicians within the first two years of Physicians within the first two years of

practice exemptpractice exempt

Medical Specialties of Medical Specialties of Interest to PCOM StudentsInterest to PCOM Students

Primary CarePrimary Care

Family Practice, Family Practice, Sports MedicineSports Medicine

Internal Internal MedicineMedicine

PediatricsPediatrics

Medical Specialties,SubsMedical Specialties,Subs

Allergy/ImmunologyAllergy/Immunology Cardiology, Pediatric, Invasive Cardiology, Pediatric, Invasive

Interventional and NoninvasiveInterventional and Noninvasive PM&R (Physical Medicine & PM&R (Physical Medicine &

Rehabilitation)Rehabilitation) RheumatologyRheumatology Hematology/Oncology, Pediatric Hematology/Oncology, Pediatric

and Adultand Adult Pediatric EndocrinologyPediatric Endocrinology Neurology, Movement DisordersNeurology, Movement Disorders PsychiatryPsychiatry DermatologyDermatology Infectious DiseasesInfectious Diseases PulmonologyPulmonology Interventional RadiologyInterventional Radiology Emergency MedicineEmergency Medicine

Medical Specialties of Medical Specialties of Interest to PCOM StudentsInterest to PCOM Students

Surgical Specialties Surgical Specialties and Subspecialtiesand Subspecialties

Orthopedic Surgery, Orthopedic Surgery, Hand Surgery, Sports Hand Surgery, Sports MedicineMedicine

General SurgeryGeneral Surgery Urological SurgeryUrological Surgery Anesthesiology, Anesthesiology,

Anesthesiology Pain Anesthesiology Pain MedicineMedicine

Cardiothoracic SurgeryCardiothoracic Surgery Gastrointestinal SurgeryGastrointestinal Surgery NeurosurgeryNeurosurgery PathologyPathology

Specialties Without Reliable Specialties Without Reliable Compensation DataCompensation Data

Pediatric PM&RPediatric PM&R Osteopathic Osteopathic

Manipulative MedicineManipulative Medicine

Specialty Selection

Compensation Comparisons

Median = 50 percentileMidpoint of all specialistsAverage age is now about 50-55 Starting from residency may be less

90th PercentileTop earnersMost productive (80-100 hours per week)Most experienced (20 + years in

practice)Most business savvyScarcity / geographic considerations

important

Primary Care TrendsPrimary Care Trends

Median Compensation 2003 through 2007Median Compensation 2003 through 2007

( 50( 50thth percentile)percentile)

2007 ($ 2007 ($ k)k)

% % changechange

Fam Med no Fam Med no OBOB

175175 +14.0+14.0

FM, SMFM, SM 201201 -2.4-2.4

IM generalIM general 191191 +15.4+15.4

PedsPeds 183183 +15.4+15.4

Primary Care TrendsPrimary Care Trends9090thth Percentile Compensation 2003 through Percentile Compensation 2003 through

20072007

2007 ($k)2007 ($k) % change% change

FP no OBFP no OB 283283 +18.2+18.2

FP, SMFP, SM 312312 -19.0-19.0

IMIM 295295 +20.2+20.2

PedsPeds 301301 +18.3+18.3

Medical Sub Specialty Medical Sub Specialty TrendsTrends

Median Compensation Medical Sub Specialties Median Compensation Medical Sub Specialties 2003 through 20072003 through 2007

2007 ($k)

%

Cardiology 410 +17.6

Card invasive

485 +10.4

Card peds 270 +29.8

Heme Onc 363 +15.0

Heme Onc Peds

202 +20.6

Neurology 228 +19.2

PMR 234 +9.8

Rheumatology

219 +9.9

Medical Sub Specialty Medical Sub Specialty TrendsTrends

9090thth Percentile Medical Sub Specialties 2003 Percentile Medical Sub Specialties 2003 through 2007through 2007

2007 ($k)

%

Cardiology 596 +6.6

Card invasive

881 +12.3

Card peds 487 +25.1

Heme Onc 778 -11.8

Heme Onc Peds

294 +11.8

Neurology 412 +23.6

PMR 380 -21.8

Rheum 365 +1.2

Medical Sub Specialty Medical Sub Specialty TrendsTrends

Median Compensation Medical Sub Specialties Median Compensation Medical Sub Specialties 2003 through 20072003 through 2007

2007 ($k)

%

Allergy/Immun.

268 +4.0

Peds Genetics

161 +8.3

Peds Endocrine

175 +33.2

Psychiatry 194 +20.3

Dermatology 358 +27.8

Infec. Disease

193 +7.8

Pulmonary 274 +19.7

Medical Sub Specialty Medical Sub Specialty TrendsTrends

9090thth Percentile Medical Sub Specialties 2003 Percentile Medical Sub Specialties 2003 through 2007through 2007

2007 ($k)

%

Allergy/Immun.

539 -9.3

Peds Genetics

236 +6.6

Peds Endocrine

255 +10.2

Psychiatry 268 +14.9

Dermatology 608 +14.6

Infec. Disease

269 -5.4

Pulmonary 453 +27.1

Hospital Based Physician Hospital Based Physician TrendsTrends

Median Compensation 2003 through 2007Median Compensation 2003 through 2007

2007 ($k)

%

Radiology diag.

451 +13.9

Rad interven.

495 +15.5

EM 257 +19.0

Hospitalist

198 +19.8

Hospital Based Physician Hospital Based Physician TrendsTrends

9090thth Percentile Compensation 2003 through Percentile Compensation 2003 through 20072007

2007 ($k)

%

Radiology diag.

687 +26.1

Rad interven.

715 +28.7

EM 353 +18.0

Hospitalist 275 +19.1

Surgical Physician TrendsSurgical Physician Trends

Median Compensation Surgical Sub Specialties Median Compensation Surgical Sub Specialties 2003 through 20072003 through 2007

2007 ($k)

%

Anesthesiology

399 +25.7

Anes/Pain 458 +27.0

CT Surg 462 -0.3

GI Surg 377 +12.7

Gen Surgery

317 +19.9

Pathology 319.4 -4.2

Surgical Physician TrendsSurgical Physician Trends

9090thth Percentile Surgical Sub Specialties 2003 Percentile Surgical Sub Specialties 2003 through 2007through 2007

2007 ($k)

%

Anesthesiology

559 +11.8

Anes/Pain 660 +8.4

CT Surg 700 -2.9

GI Surg 1,200 +130.8

Gen Surgery

499 +13.7

Pathology 539 -2.6

Surgical Physician TrendsSurgical Physician Trends

Median Compensation Surgical Specialties 2003 Median Compensation Surgical Specialties 2003 through 2007through 2007

2007 ($k)

%

OB/GYN 281 +18.3

NeuroSurg 638 +19.6

Orthopedics 446 +15.9

Ortho Hand 446 6.5

Ortho SM 553 +23.6

ENT 345 +16.5

Urology 198 +19.8

Surgical Physician TrendsSurgical Physician Trends

9090thth Percentile Compensation Surgical Specialties Percentile Compensation Surgical Specialties 2003 through 20072003 through 2007

2007 ($k)

%

OB/GYN 450 +17.3

Neuro Surg 1,200 +34.6

Orthopedics

800 +9.4

Ortho Hand 840 -1.0

Ortho SM 1,000 +22.0

ENT 614 +12.5

Urology 644 +10.0

Demographic and Economic Demographic and Economic TrendsTrends

For the next 19 years, 70 million new For the next 19 years, 70 million new agingaging Americans. Americans.

Life expectancy:Life expectancy:o In 1959-1961In 1959-1961

MalesMales 66.866.8 Medicare eligibilityMedicare eligibility 1.8 years1.8 years FemalesFemales 73.2473.24 Medicare eligibilityMedicare eligibility 8.24 years8.24 years

o In 2004 at age 55In 2004 at age 55 MalesMales 79.0479.04 Medicare eligibilityMedicare eligibility 14.04 years14.04 years FemalesFemales 83.383.3 Medicare eligibilityMedicare eligibility 18.3 years18.3 years

Boomers have more money to spend on Healthcare Boomers have more money to spend on Healthcare

o Demand Demand quality carequality care and are willing to pay for it and are willing to pay for it

Medical Medical SpecialtiesSpecialties

Internal MedicineInternal Medicine GeriatricsGeriatrics HospitalistHospitalist Pulmonary Pulmonary

MedicineMedicine RheumatologyRheumatology CardiologyCardiology EndocrinologyEndocrinology Hematology/Hematology/

OncologyOncology Physiatry (PM&R)Physiatry (PM&R) Geriatric Geriatric

PsychiatryPsychiatry

Surgical Surgical SpecialtiesSpecialties

Orthopedic SurgeryOrthopedic Surgery General SurgeryGeneral Surgery Surgical OncologySurgical Oncology Vascular SurgeryVascular Surgery UrologyUrology

Specialties for the next two Specialties for the next two decades are those specialties that focus on decades are those specialties that focus on diseases of ageing:diseases of ageing:

Physician ResponsesPhysician Responses

Physicians /residency programs slow to Physicians /residency programs slow to respond respond

Some physicians close to Medicare (opt out).Some physicians close to Medicare (opt out).

Some physicians are leaving medicine.Some physicians are leaving medicine.

Primary care physicians = more ambulatory Primary care physicians = more ambulatory patients only (hospitalists).patients only (hospitalists).

Opening “concierge” practicesOpening “concierge” practices

Physician ResponsesPhysician Responses

Physician Responses by age group:Physician Responses by age group:o 35 to 45-35 to 45- ExpandExpand practice or practice or retrainretrain to take to take

advantage of older populationadvantage of older populationo 45 to 55-45 to 55- ExpandExpand practice, look at practice, look at

opportunities to use experience in opportunities to use experience in alternative waysalternative ways

o 55 to 70-55 to 70- Hang onHang on and plan for eventual and plan for eventual retirementretirement

Physician Recruiters - Physician Recruiters - Friend or Foe?Friend or Foe?

Recruiters bombard you the second year residencyRecruiters bombard you the second year residencyCritically evaluate Critically evaluate

LocationLocationLifestyleLifestylePractice StylePractice StyleLoan forgiveness packagesLoan forgiveness packages

Eliminate those offers that do not fit into your goalsEliminate those offers that do not fit into your goalsNever pay a recruiter (they will come to you).Never pay a recruiter (they will come to you).

Recruiters work for the hiring organization, Recruiters work for the hiring organization, notnot you.you.

Never pay for visit to a potential practice location.Never pay for visit to a potential practice location.Last year of the residency allows for short absences Last year of the residency allows for short absences

for recruiting trips.for recruiting trips.

ConclusionConclusion

Physicians still make a good livingPhysicians still make a good living

Important day is the Residency Important day is the Residency Match Day (FEB/MAR in 4Match Day (FEB/MAR in 4thth year). year).

Know your goals, and make Know your goals, and make flexible decisions based on these flexible decisions based on these whenever possiblewhenever possible

Physician Recruiters - Physician Recruiters - Friend or FoeFriend or Foe

ResourcesResources

National Association of Physician RecruitersNational Association of Physician Recruitershttp://www.napr.org

Merritt Hawkins and AssociatesMerritt Hawkins and Associates1-800-876-05001-800-876-0500http://www.merritthawkins.com

Cejka SearchCejka Search1-800-678-78581-800-678-7858http://www.cejkasearch.com/

Health Management AssociatesHealth Management Associates1-239-552-36361-239-552-3636http://www.hma.com/