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Driven by Specialists, Physician Compensation Rates Rise 3.1%

A recent AGMA survey found that physician compensation has increased by 3.1 percent in 2015, with nearly three-fourths of specialists seeing a boost in payments.

By Jacqueline LaPointe

- Physician compensation has increased by 3.1 percent in 2015, according to a recent survey from the American Medical Group Association (AMGA). The rate represents a 0.3 percent increase from last year.

Physician compensation increased by 3.1 percent in 2015

“Once again this year, we see that physician compensation in general has remained relatively flat, with an average increase around 3.0 percent,” said Donald W. Fisher, PhD, CAE, AMGA’s President and Chief Executive Officer. “We've seen peaks in certain specialties, and dips in others, and much of this reflects the cyclical nature of healthcare economics.”

“However, with the movement to value-based incentives for care, the delivery model is changing to a more team-based approach, which has always been the hallmark of AMGA member medical groups. It will be interesting to watch compensation trends over the next few years as these value-based models become more prevalent.”

The report, which surveyed 260 medical groups and 92,000 providers, explained that most specialists experienced an increase in compensation. About three-fourths of physician specialists saw a boost in their payments.

Besides primary care and surgical physicians, most medical specialists saw an average three percent increase in payment in 2015, which is up from two percent from 2014.

Specialists in emergency medicine received the largest increase in compensation with a 9.6 percent boost, followed by physicians in cardiac and thoracic surgery (8.1 percent), cardiology (6.9 percent), and hypertension and nephrology (6.7 percent).

In this cycle of healthcare economics, the researchers explained that physicians in a surgical specialty were significantly affected by the increase in compensation. Overall, these providers received 3.6 percent more in 2015.

Primary care physicians also experienced a rise in payments with a 3.6 percent increase in the past year. This is substantially up from the 0.3 percent decrease primary care providers saw in 2014.

AMGA stated that the survey could help physicians understand where their compensation plans fit in with the rest of the industry. With physician burnout on the rise, it is key that healthcare organizations know how their compensation rates compare to similar practices in order to keep their employees.

“One basic tenet of any compensation system is that it allows an organization to successfully recruit and retain talent necessary to carry out the work of the organization,” stated Tom Dobosenski, CPA, President of AMGA Consulting.

“In order to do so, most AMGA member organizations believe that physician compensation systems must offer the opportunity for physicians to earn market rates of compensation for market rates of effort or output. This survey is a tool our members use to evaluate whether their plans are market-based by comparing their performance to others.”

Recently, many providers have faced more than just increases to their compensation structures.

Additionally, physician compensation arrangements have seen a recent shift to include more value-based incentives. A 2015 survey from Sullivan, Cotter, and Associates reported that 45 percent of healthcare organizations use quality metrics in physician payment plans.

The survey added that physicians received about $18,500 from quality incentives, accounting for approximately six percent of their total cash compensation.

The process of aligning physician compensation with value-based care will take some time though, explained the survey. As healthcare organizations continue to implement more alternative payment models, physician payment structures will also include more quality incentives.

“As the reimbursement methodology changes, health systems, in order to be successful, will need to adjust their compensation methodologies,” Justin Chamblee, Senior Manager at The Coker Group, explained in a Physicians Practice report.

“Non-productivity incentives play a key role in the current compensation arena and will continue to gain importance in future years,” Chamblee continued. “But you cannot incentivize physicians based on outcomes, when all your reimbursement is on fee for service.”

Dig Deeper:

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