Practice Management News

Physician Compensation Grew While Productivity Stayed Low in 2018

Physician compensation increased by nearly 3% in 2018 despite just a 0.29% boost in productivity that year, AMGA Consulting reports.

Physician compensation and productivity

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By Jacqueline LaPointe

- Overall physician compensation increased by a median of 2.92 percent in 2018, up from a 0.89 percent increase the previous year, revealed a survey conducted by AMGA’s subsidiary AMGA Consulting.

However, physician productivity remained stagnant in 2018, the survey data from 143 medical specialties, primary care subspecialties, advance practice providers, and other clinical professionals showed.

Productivity increased by just 0.29 percent in 2018 compared to a 1.63 percent decrease in 2017.

“The 2019 survey shows that physician compensation in 2018 rebounded from a stagnant 2017,” said Fred Horton, MHA, AMGA Consulting president, stated in a press release. “While productivity also increased, it did not increase enough to surpass the decline we saw in last year’s survey, meaning productivity still has not risen since 2016.”

Productivity was notably flat among primary care providers, the survey showed. Overall, median compensation for all primary care specialties increased by 4.91 percent in 2018, representing significant growth compared to the 0.76 percent increase observed the previous year.

But work relative value units (wRVU), which indicate the professional value of services provided by a physician or allied healthcare professional, increased by just 0.21 percent in 2018.

The stagnation of wRVUs among primary care specialties was good news for physicians, causing the median compensation per wRVU ratio to increase by 3.57 percent, the largest boost for primary care specialties in four years, AMGA Consulting reported.

“As healthcare organizations move from volume-based to value-based payment models, we’ve observed increased scrutiny on primary care performance. Medical groups continue to focus on delivering care in the most appropriate setting with the greatest efficiency—and often place primary care providers at the center of this strategy,” said Elizabeth Siemsen, AMGA Consulting director.

“Concurrently, in recent years, the AMGA survey has shown a slow uptick in the proportion of primary care physicians reported at less than a 1.0 clinical FTE, indicating an increase in part-time providers,” she continued. “In order to recruit and retain the primary care workforce, it may be that the market demanded a compensation course correction this past year.”

Specifically, the market has increased compensation for family medicine physicians, who reported a 6.25 percent increase in pay and a 3.53 percent boost in compensation per wRVU ratio in 2018. Internal medicine physicians also saw compensation rise that year, experiencing a 5.90 percent boost in pay and a 3.95 percent rise in compensation per wRVU ratio.

Pediatric physicians were the only primary care specialty to see compensation decrease in 2018. Annual pay fell by 0.04 percent. However, the specialty reported the largest decline in physician productivity, resulting in the compensation per wRVU ratio increasing by 3.04 percent compared to 2017.

Additionally, medical specialties saw physician compensation growth in 2018, AMGA Consulting found.

Overall, physician compensation for medical specialties increased by 3.39 percent, Specialists also experienced a significantly higher increase in productivity in 2018, with wRVUs rising by 1.9 percent compared to the previous year, the survey showed.

As a result, the compensation per wRVU ratio among physicians across medical specialties increased by just 2.65 percent from 2018 to 2017.

“Data from this year’s survey shows compensation is increasing without an equivalent increase in wRVU production for many specialties. This trend is causing organizations to absorb additional compensation expenses without balancing revenue from production increases,” Horton explained.

Some specialists, however, made out better than others in 2018. For example, cardiologists reported a 4.4 percent increase in compensation and a 4.3 percent increase in the compensation per wRVU ratio. Dermatologists also saw significant compensation growth, with a 3.3 percent boost in compensation and a 5.4 percent increase in the compensation per wRVU ratio.

Notably, psychiatrists reported the largest growth in compensation. AMGA Consulting found that pay for the specialty increased by 15.6 percent despite a 1.1 percent decline in productivity. Overall, the compensation per wRVU ratio for psychiatrists increased by 5.90 percent in 2018.

“More intentionally transitioning to value-based care is one strategy medical groups can use to mitigate this trend, as it would help them better clarify their organizational strategies and objectives,” Horton stated in regard to the increase in compensation without an increase in productivity.