Physician pay increases due to a “competitive healthcare market place busting at the seams.”


June 21—Physician movement and competition for top talent has caused an upward spike in physician payment, with compensation increases—many in the double digits—among 19 of 20 specialties tracked by the Dallas-based Merritt Hawkins healthcare recruitment firm.

“It shows a competitive healthcare marketplace busting at the seams,” Travis Singleton, senior vice president at Merritt Hawkins, said in an interview. Singleton described the landscape as a “dust cloud of chaos.”

Singleton said the spike in salaries and other compensation reflects “more people moving around,” and it is too soon for it to stem from the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA).

The data on physician, physician assistant, and advanced practice nurses are included in the 23rd annual review of Merritt Hawkins placements and includes the results of 3,342 recruitment assignments conducted from April 1, 2015 to March 31, 2016.

For the tenth-straight year, family medicine was the most in-demand specialty. Family physicians recruited by Hawkins during the study period received an average $225,000, which is 13 percent more than the previous year. Psychiatrists replaced internists as the second-most in demand specialty and had average compensation of $250,000, which was 11 percent more than the year before.

Other significant figures included: Dermatology, $444,000, an increase of 13 percent; urology, $471,000, a 14 percent increase; otolaryngology, $403,000, a 21 percent increase; general surgery, $378,000, a 12 percent increase; and obstetrics-gynecology, $321,000, a 16 percent increase.

Smaller increases were seen for the two specialties normally on top of the list: Invasive cardiologists saw their compensation increase to $545,000, which was a 4 percent increase, and orthopedic surgeons had a pay increase 5 percent to $521,000. Compensation for emergency medicine physicians showed no increase.

The largest increase was for noninvasive cardiologists and may reflect an artificially low figure for the previous year. Their pay increased 77 percent to $493,000 from $279,000.

Hospitals Drive Demand

Forty-nine percent of the searches were for hospital positions. Singleton said the numbers reflect a system still driven by procedure-based reimbursement.

“Let’s not forget who holds up the wall of those hospitals--neurosurgeons, cardiologists and orthopedic surgeons,” Singleton said. “Hospitals are going to do whatever they can to get them in the door. They’re not going to quibble over $50,000 or $75,000—not when there’s millions of dollars at stake.”

Twenty percent of searches offered medical school loan forgiveness as a bonus, which ranged from $10,000 to $500,000 and averaged $88,000.

Singleton said the questions he most often receives from CFOs involved quality bonuses. Just under a third of Merritt Hawkins searches included a quality of bonus of some type and Singleton said CFOs are usually surprised that the numbers are so low.

Quality incentives can make up to 29 percent of a physician’s bonus payment, but only 6 percent of total compensation, which Singleton said won’t accomplish a health system’s quality aims. He said an incentive has to equal at least 10 percent of compensation to affect behavior.

Psychiatrists Needed

Semyon Faynboym, a psychiatrist from Indianapolis, said in an interview that the Merritt Hawkins figure of $250,000 may be a little low. He saw it as a typical base salary that usually has benefits added to it such matching retirement contributions, payments for continuing medical education, and medical education loan payments.

According to Faynboym, some psychiatrists take a lower base after being promised a high volume of patients. But, if a location has a high number of patients who don’t show up for appointments, this is a bad deal for the psychiatrist.

Though he didn’t say what his compensation will be, Faynboym said he’ll soon be starting at a private pain medicine practice. Lifestyle issues played a role in taking the position. In his new job, Faynboym said he won’t have to be on call and will only be required to work 40 hours a week.

He said factors increasing the demand for psychiatry include an aging workforce, psychiatrists working fewer hours per week, fewer medical students choosing a career in psychiatry, and increased national focus on mental health--particularly by the U.S. Department of Veterans Affairs (VA).

“Generally, the VA has upped their game and created more spots for psychiatrists,” Faynboym said. However, he is concerned about the agency’s efforts to give prescribing rights to psychologists.

J. Mack Worthington, MD, chairman of the University of Tennessee College of Medicine’s department of family medicine in Chattanooga, said in an interview that he didn’t know if the $225,000 average compensation for family medicine was true across the country. But Worthington was “glad to see it going up.”

Worthington said the country’s aging population, the new focus on wellness, prevention, and disease management increased demand--as did medical school debt, which steers new doctors toward higher-paying specialties.

“A student is coming out of medical school with $200,000 and $300,000 debt and their entire resident’s salary goes toward paying interest,” Worthington said. “With that kind of debt, you focus on a career choice that will help you financially.”

Some Data Disputed

OB-GYNs were listed as Merritt Hawkins fifth-most in demand specialty, but the American College of Obstetricians and Gynecologists (ACOG) disputed the recruiters’ $321,000 compensation figure for them.

“This is not a scientific study nor is it a representative sample of OB-GYNs. 112 OB-GYNs out of 57,000 were represented,” Barbara Levy, MD, vice president of health policy for ACOG, wrote in an e-mail. She suggested the Medical Group Management Association’s annual compensation survey, which will be released next month, was a more accurate reflection of compensation in her specialty.

A similar survey by the American Medical Group Association (AMGA) will also be released next month. Last year’s survey reported an overall compensation increase of just 2.8 percent.

Singleton defended his company’s report.

“This is a review, it’s not a survey or an opinion,” Singleton said. “With us, it’s a true number. It’s something someone had to write on a check.”

Levy noted the effect healthcare reform has had on OB-GYN compensation.

The Centers for Medicare & Medicaid Services “estimates that 38.8 percent of OB-GYNs will have a negative adjustment and 61.1 percent will get a positive adjustment” from MACRA, Levy wrote, though Medicare accounts for only 3 percent of her practice. “However, MACRA does not impact OB-GYNs nearly as much as the Affordable Care Act (ACA) has. Because of the ACA there is more coverage for preventive services which increases the demand for OB-GYNs (birth control, screenings, etc.).”


Andis Robeznieks is a freelance writer based in Chicago. Follow Andis on Twitter at @AndisRobeznieks.

Publication Date: Tuesday, June 21, 2016