Physician Compensation Trends Paul Evans DO, FAAFP, FACOFP Dean and Professor of Family Medicine

Objectives Review Compensation Trends Review Compensation Trends o Primary Care Physician o Specialty Care Physicians Present Trends Impacting Physician Practice Present Trends Impacting Physician Practice o Physician Responses o “ Hot ” Specialties (now and long-term) Discuss Physician Recruiters (friend or foe?) Discuss Physician Recruiters (friend or foe?)

References Compensation data and graphs excerpted from SOMA GA-PCOM presentation by: Douglas T. Cardinal, RN, FACHE President, DT Cardinal Consulting (770) m

Introduction Factors influencing practice decisions: o High student loan burden  Loan debt in excess of $200,000 o “ Life style ” vs. compensation  predictable call, weekends off  time off to have families  collegial nature of larger groups

Lower Reimbursements- Now What? Physician Response Increasing “production” Increasing “production” 2000 FP Relative Value Unit = 3, FP Relative Value Unit = 3, FP Relative Value Unit =4,600 (up 20%) 2007 FP Relative Value Unit =4,600 (up 20%) Compensation for ER and house call Compensation for ER and house call Medical Directorships Medical Directorships Embracing “alternative” health and lifestyle modalities Embracing “alternative” health and lifestyle modalities CAM, Acupuncture CAM, Acupuncture Medical “spas”, aesthetic procedures Medical “spas”, aesthetic procedures Concierge medicine Concierge medicine

Lower Reimbursements- Now What? Institutional Response Hire physicians into hospital owned or controlled medical groups Hire physicians into hospital owned or controlled medical groups Changing physician compensation formulas from fixed salary or gross charges to: Changing physician compensation formulas from fixed salary or gross charges to: Net collections less actual and allocated expenses Net collections less actual and allocated expenses Compensation per Work Relative Value Unit produced Compensation per Work Relative Value Unit produced

Lower Reimbursements- Now What? Government Response Government Response Auditing physician-hospital compensation relationships of all kinds – more denial payments Auditing physician-hospital compensation relationships of all kinds – more denial payments CMS OIG CMS OIG Compensation must be “reasonable” and “fair market value” Compensation must be “reasonable” and “fair market value” Physician recruitment incentives Physician recruitment incentives Payments for relocation - actual move of practice Payments for relocation - actual move of practice Physicians within the first two years of practice exempt Physicians within the first two years of practice exempt

Medical Specialties of Interest to PCOM Students Primary Care Family Practice, Sports Medicine Family Practice, Sports Medicine Internal Medicine Internal Medicine Pediatrics Pediatrics Medical Specialties,Subs Allergy/Immunology Allergy/Immunology Cardiology, Pediatric, Invasive Interventional and Noninvasive Cardiology, Pediatric, Invasive Interventional and Noninvasive PM&R (Physical Medicine & Rehabilitation) PM&R (Physical Medicine & Rehabilitation) Rheumatology Rheumatology Hematology/Oncology, Pediatric and Adult Hematology/Oncology, Pediatric and Adult Pediatric Endocrinology Pediatric Endocrinology Neurology, Movement Disorders Neurology, Movement Disorders Psychiatry Psychiatry Dermatology Dermatology Infectious Diseases Infectious Diseases Pulmonology Pulmonology Interventional Radiology Interventional Radiology Emergency Medicine Emergency Medicine

Medical Specialties of Interest to PCOM Students Surgical Specialties and Subspecialties Orthopedic Surgery, Hand Surgery, Sports Medicine Orthopedic Surgery, Hand Surgery, Sports Medicine General Surgery General Surgery Urological Surgery Urological Surgery Anesthesiology, Anesthesiology Pain Medicine Anesthesiology, Anesthesiology Pain Medicine Cardiothoracic Surgery Cardiothoracic Surgery Gastrointestinal Surgery Gastrointestinal Surgery Neurosurgery Neurosurgery Pathology Pathology Specialties Without Reliable Compensation Data Pediatric PM&R Pediatric PM&R Osteopathic Manipulative Medicine Osteopathic Manipulative Medicine

Specialty Selection

Compensation Comparisons Median = 50 percentile Midpoint of all specialists Average age is now about Starting from residency may be less 90 th Percentile Top earners Most productive ( hours per week) Most experienced (20 + years in practice) Most business savvy Scarcity / geographic considerations important

Primary Care Trends Median Compensation 2003 through 2007 ( 50 th percentile) 2007 ($ k) % change Fam Med no OB FM, SM IM general Peds

Primary Care Trends 90 th Percentile Compensation 2003 through ($k) % change FP no OB FP, SM IM Peds

Medical Sub Specialty Trends Median Compensation Medical Sub Specialties 2003 through ($k)% Cardiology Card invasive Card peds Heme Onc Heme Onc Peds Neurology PMR Rheumatology

Medical Sub Specialty Trends 90 th Percentile Medical Sub Specialties 2003 through ($k)% Cardiology Card invasive Card peds Heme Onc Heme Onc Peds Neurology PMR Rheum

Medical Sub Specialty Trends Median Compensation Medical Sub Specialties 2003 through ($k)% Allergy/Immun Peds Genetics Peds Endocrine Psychiatry Dermatology Infec. Disease Pulmonary

Medical Sub Specialty Trends 90 th Percentile Medical Sub Specialties 2003 through ($k)% Allergy/Immun Peds Genetics Peds Endocrine Psychiatry Dermatology Infec. Disease Pulmonary

Hospital Based Physician Trends Median Compensation 2003 through ($k)% Radiology diag Rad interven EM Hospitalist

Hospital Based Physician Trends 90 th Percentile Compensation 2003 through ($k)% Radiology diag Rad interven EM Hospitalist

Surgical Physician Trends Median Compensation Surgical Sub Specialties 2003 through ($k)% Anesthesiology Anes/Pain CT Surg GI Surg Gen Surgery Pathology

Surgical Physician Trends 90 th Percentile Surgical Sub Specialties 2003 through ($k)% Anesthesiology Anes/Pain CT Surg GI Surg1, Gen Surgery Pathology

Surgical Physician Trends Median Compensation Surgical Specialties 2003 through ($k)% OB/GYN NeuroSurg Orthopedics Ortho Hand Ortho SM ENT Urology

Surgical Physician Trends 90 th Percentile Compensation Surgical Specialties 2003 through ($k)% OB/GYN Neuro Surg1, Orthopedics Ortho Hand840 Ortho SM1, ENT Urology

Demographic and Economic Trends For the next 19 years, 70 million new aging Americans. For the next 19 years, 70 million new aging Americans. Life expectancy: Life expectancy: o In  Males66.8Medicare eligibility 1.8 years  Females73.24Medicare eligibility 8.24 years o In 2004 at age 55  Males79.04Medicare eligibility years  Females83.3Medicare eligibility 18.3 years Boomers have more money to spend on Healthcare Boomers have more money to spend on Healthcare o Demand quality care and are willing to pay for it

Medical Specialties Internal Medicine Internal Medicine Geriatrics Geriatrics Hospitalist Hospitalist Pulmonary Medicine Pulmonary Medicine Rheumatology Rheumatology Cardiology Cardiology Endocrinology Endocrinology Hematology/Oncology Hematology/Oncology Physiatry (PM&R) Physiatry (PM&R) Geriatric Psychiatry Geriatric Psychiatry Surgical Specialties Orthopedic Surgery Orthopedic Surgery General Surgery General Surgery Surgical Oncology Surgical Oncology Vascular Surgery Vascular Surgery Urology Urology Specialties for the next two decades are those specialties that focus on diseases of ageing: Specialties for the next two decades are those specialties that focus on diseases of ageing:

Physician Responses Physicians /residency programs slow to respond Physicians /residency programs slow to 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 patients only (hospitalists). Primary care physicians = more ambulatory patients only (hospitalists). Opening “ concierge ” practices Opening “ concierge ” practices

Physician Responses Physician Responses by age group: Physician Responses by age group: o 35 to 45- Expand practice or retrain to take advantage of older population o 45 to 55- Expand practice, look at opportunities to use experience in alternative ways o 55 to 70- Hang on and plan for eventual retirement

Physician Recruiters - Friend or Foe? Recruiters bombard you the second year residency Recruiters bombard you the second year residency Critically evaluate Critically evaluate Location Location Lifestyle Lifestyle Practice Style Practice Style Loan forgiveness packages Loan forgiveness packages Eliminate those offers that do not fit into your goals Eliminate those offers that do not fit into your goals Never pay a recruiter (they will come to you). Never pay a recruiter (they will come to you). Recruiters work for the hiring organization, not you. Recruiters work for the hiring organization, not 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 for recruiting trips. Last year of the residency allows for short absences for recruiting trips.

Conclusion Physicians still make a good living Physicians still make a good living Important day is the Residency Match Day (FEB/MAR in 4 th year). Important day is the Residency Match Day (FEB/MAR in 4 th year). Know your goals, and make flexible decisions based on these whenever possible Know your goals, and make flexible decisions based on these whenever possible

Physician Recruiters - Friend or Foe Resources National Association of Physician Recruiters National Association of Physician Recruiters Merritt Hawkins and Associates Merritt Hawkins and Associates Cejka Search Cejka Search Health Management Associates Health Management Associates