Demand for Family Physicians Fuels Salary, Compensation Increases, Study Finds

July 09, 2013 03:02 pm James Arvantes

Median first-year guaranteed compensation for family physicians who do not practice obstetrics jumped by $7,000 between 2011 and 2012, from $163,000 to $170,000. This increase was driven in large part by a greater demand for family physicians, according to a recent survey(www.mgma.com) released by MGMA (formerly, the Medical Group Management Association).

According to the survey, the median compensation for all primary care physicians increased by $5,000 from 2011 and 2012. Such large increases reflect the growing shortage of primary care physicians, as well as an increased demand for these physicians. Hospitals, in particular, have emerged as more active players in the health care marketplace by putting together accountable care organizations and integrated health care systems, which require the services of primary care physicians, said Kenneth Hertz, a principal with the MGMA Health Care Consulting Group.

story highlights

  • Median first-year guaranteed compensation for family physicians who do not practice obstetrics jumped by $7,000 between 2011 and 2012, climbing from $163,000 to $170,000, says a new survey released by MGMA (formerly, the Medical Group Management Association).
  • The increase is a result of a greater demand and competition for primary care and family physicians, according to the survey.
  • The results of the MGMA survey mirror the findings of other prominent surveys on physician compensation and salary rates.

This, in turn, has created competition between hospitals and private practices for primary care physicians, another factor that has contributed to the increase in first-year compensation rates, said Hertz.

The survey also found that pediatricians reported an increase in median first-year guaranteed compensation from $150,000 to $160,000 during the same one-year time frame. The median first-year guaranteed compensation for internal medicine, meanwhile, remained the same at $180,000, according to the survey, which is based on responses from 5,225 physicians in 629 groups.

At the same time, median first-year guaranteed compensation for subspecialists dropped from $255,000 to $247,437 between 2011 and 2012. Hertz does not have data to specifically address why compensation for subspecialists decreased. However, he speculated that the decrease could be a result of fluctuations in compensation.

Hertz, like other analysts, expects the demand and ensuing competition for primary care physicians to become even greater as the health care reform law extends coverage to millions more people during the next few years. In an effort to recruit more primary care physicians, practices are offering perks such as signing bonuses, paid relocation expenses, paid vacations and CME funds, according to the survey. That trend likely will become more prevalent in the years ahead, said Hertz.

MGMA's survey findings also are reflected elsewhere. For example, a 2012 Merritt Hawkins survey found that the average income for family physicians increased from $178,000 to $189,000 between 2011 and 2012.

The company's 2013 data will show family physicians with annual incomes around $200,000, said Travis Singleton, a senior vice president for Merritt Hawkins, which is a national physician search firm.


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