Family Physician Salaries Rising, Says Survey

The demand for family physicians continues to surpass the demand for other specialties and subspecialties. And that demand played a role in fueling a 6 percent increase in family physician salaries during the past year, taking the average from $178,000 a year in 2011 to $189,000 a year in 2012, according to a survey recently conducted by national physician search firm Merritt Hawkins.

The survey was based on 2,710 search assignments conducted by Merritt Hawkins from April 1, 2011, to March 31, 2012. According to an overview of the survey, (4-page PDF; About PDFs) this is the sixth straight year that requests for family physicians outpaced those for other primary care and subspecialist physicians.

The ongoing demand for FPs now is starting to show up in salary increases for family physicians, says Travis Singleton, senior vice president for Merritt Hawkins. He notes that in the past five years, salary and compensation rates for family physicians have climbed by 10 percent.

Nevertheless, the 6 percent salary increase during the past year is not a true representation of the value family physicians bring to the health care system, and it does not reflect the continued demand for family physicians, says Singleton. "I think you can say that the salary of family physicians is not equal with their demand at this point. For the role we want family physicians to play in our delivery system, they are underpaid. I don't think that even the (sub)specialty societies doubt that."

As an example, says Singleton, requests for otolaryngologists spiked during the past year, creating a 15 percent jump in the average salary for the subspecialty.

The same situation played out in the late 1990s when dramatic increases in requests for radiologists and orthopedists led to a jump in their average salaries of $100,000 in the span of a few years.

"Family practice has gone through just as great a demand spike in these last five or six years," says Singleton. "But you have not seen that same salary spike. It has gone up slightly, but nothing that would catch your eye."

Subspecialists earn more money than family physicians and other primary care physicians, says Singleton. The result is that there is more money in the system to pay them. "When you get into primary care, more often than not, they are operating at a deficit already," he adds.

The survey also found that hospitals are employing more physicians. Sixty-three percent of the physician searches conducted by Merritt Hawkins in the 2011- 2012 time frame were for hospital-employed physicians, an increase of 7 percent from last year's survey and 52 percent from 2004.

Only 1 percent of Merritt Hawkins' search assignments in the 2011-2012 period were for solo physicians compared to 22 percent in 2004. "Traditionally, physicians have owned their own practices, either as solo practitioners with another physician or in partnerships with several physicians in group practice," says the survey. "Today, physicians are much more likely to be employed by either a hospital or a multi-physician medical group."

However, greater employment also means higher physician salaries because hospitals and large multi-physician groups typically have more money for salaries and compensation than small independent practices, says Singleton. Increasing employment is part of the reason why the average salary for family physicians climbed 6 percent during the past year, he notes.