Physician Income Shows Ups & Downs

Physician's Money Digest, September15 2003, Volume 10, Issue 17

If you're thinking about an early retirement,perhaps you should think twice.Once again, physicians have experiencedminor increases in compensation,according to the Medical Group ManagementAssociation's (MGMA) 2003Physician Compensation and ProductionSurvey, which is based on 2002 data.

Increases Reported

Although primary care physicians experienced2.8% median increases in compensationand specialists reported 4.3%median increases, a number of notablemedical specialties experienced decreases.

Several specialties experienced adecrease in compensation for the firsttime in years. Both invasive (-6.1%) andnoninvasive cardiologists (-3.9%) reportedlower income. General surgeons alsoexperienced a compensation decline of0.8%; pulmonary medicine was down2.6%; and urology lost 3%. Gains in anumber of other specialties were barely inline with general inflation.

Practice Demands

Some specialties reported higher productivitywhile compensation remainedstatic. For example, urologists showed a6.2% increase in production as measuredby work relative value units (RVUs) but adecline in income of 3%. Gastroenterologistsreported an 11.7% increase in workRVUs but only a 2.8% increase in income.

"The most important factors affectingphysician compensation are the increasingcost of practice operations, especially inlabor, drugs and supplies, and malpracticeinsurance, coupled with cutbacks in bothcommercial and government reimbursement,"said William Jessee, MD, CMPE,president and CEO of MGMA. "We expectto see even greater effects due to increasesin professional liability insurance costsin 2003. The full effect may not even occuruntil 2004 and beyond. As costs go up andrevenues decline, physicians find themselvesworking harder for no more money.As a result, they increasingly face difficultchoices, such as avoiding high-risk proceduresand patients, withdrawing fromMedicare and other insurance programs,or leaving their practices entirely."

The MGMA report, the largest of itskind, outlines compensation and productionindicators for almost 40,000 doctorsin all 50 states. For more information,visit