Group Practitioners See Increased Compensation, Tempered by Operating Losses

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Increases in compensation were the norm for most physicians in medical groups from 2010 to 2011, but so, too, were operating losses.

These are the primary “takeaways” from the annual Medical Group Compensation and Financial Survey, conducted by the American Medical Group Association (AMGA) and released last week. According to the survey, 69% of specialties reported compensation increases last year. Compensation increases for surgical specialties rose by 3.8%, the survey shows; those for primary care specialties, by about 2.6%, and those for other medical specialties, by an average of 2.4%.

“The modest increases seen this year reflect the negative impact of declining reimbursements, competition for specialists, the cost of new technology, and other factors on practice revenues in most parts of the country,” says Donald Fisher, PhD, AMGA’s president and chief executive officer

In a more negative vein, the survey reveals that medical groups in the Eastern region of the U.S. saw an average operating loss of $1,597 per physician; those in the Southern region, a loss of $1,870 per physician. Medical groups in the Northern region experienced an average operating loss of $10,669 per physician; those in the Western region--the only region close to breaking even--a loss of $27 per physician.

Survey results tie such negative operating margin in part to the increased integration of medical groups and health systems. Thirty percent of survey respondents note that a median $48,557 per physician in health system funding had been provided to support their medical group, with the funding replaced income not credited to that entity.

The survey also indicates that physician productivity, as determined by relative value units (RVUs) decreased on the whole by approximately 0.4%, while physician gross charges increased overall, by about 0.97%.

“Much of the loss we see in 2010 is supplemented by other non-clinical revenue sources and/or funding from health systems with which groups are associated,” Fisher asserts. “Our (existing) volume-based reimbursement system is largely indifferent to the efforts of medical groups to elevate the standard of care in the U.S.”

Fisher notes that AMGA is currently working to address the inequities of the current payment model as part of overall health care reform. As such, it is attempting to develop a model with a substantial component that reflects the achievement of quality results and value for patients and payors.

To read the press release, click here: http://www.amga.org/AboutAMGA/News/article_news.asp?k=523.

To order a copy of the survey, go to www.amga.org or contact Stefan Rozga at (703) 838-0033, ext. 326.