Despite Economic Woes, Physician Compensation Increases

Main Category: Primary Care / General Practice
Article Date: 16 Jan 2009 - 0:00 PDT

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Sullivan, Cotter and Associates, Inc. (SullivanCotter) has published its 16th 2008 Physician Compensation and Productivity Survey Report, the industry standard. Notable findings this year include an average salary increase of 4.4% for specialists and 4.0% for primary care physicians. Nearly three-quarters (72%) of the survey participants provided salary increases to their employed physicians in 2008, which is comparable to last year, when 73% reported providing a salary increase. The results also point to increased use of incentive plans, compensation tied to quality measures, and a decrease in the rates paid per work Relative Value Units (wRVUs). A total of 257 healthcare organizations nationwide participated in the survey, which includes compensation data for over 41,000 physicians in over 150 specialties.

According to Kim Mobley, a principal at SullivanCotter and the survey director, "While the majority of organizations provided salary increases to physicians, some organizations also decreased compensation for at least some of their physicians. In fact, 10% percent of survey participants decreased cash compensation levels in 2008." This is less than the 18% of organizations reporting decreases in cash compensation in 2007. "When organizations decrease physician compensation, most often it is linked to individual productivity and/or labor market benchmark norms," she adds.

The current physician recruitment environment is highly competitive and survey results indicated an increase in hiring bonuses. This year, 57% of the participants used hiring bonuses, compared to only 49% last year. Interestingly, the amounts paid have remained relatively stable, with average hiring bonuses of $10,000 for primary care physicians and $17,500 for specialists.

According to the survey, 70% of organizations use incentive compensation for their physicians; up from 60% in 2005. While productivity is still the most common variable used to determine incentives, Mobley states, "There is an increase in the use of quality measures as part of an incentive payment; however, the relative amount of compensation tied to quality is small, typically not more than 2% to 3% of total cash compensation."

The 2008 Physician Compensation and Productivity Survey Report is now available for purchase. The survey reports compensation levels for PhDs, mid-level providers, and medical group executives. The results contain comprehensive information on physician productivity levels (gross patient charges, collections, work Relative Value Units/wRVU); pay practices; incentive compensation; benefits and perquisites; hourly rates; resident compensation and more. The cost to healthcare organizations agreeing to participate in next year's survey is $600, while the cost of healthcare organizations not wishing to participate next year is $1,800. For all other types of organizations, the cost is $3,200. A CD containing the survey data tables is also available for purchase by the organizations purchasing the survey.

SullivanCotter specializes in the development and implementation of strategic total compensation and reward programs for the healthcare industry. Since 1992, SullivanCotter has worked closely with healthcare organization executives, boards and compensation committees to devise innovative compensation solutions that attract and retain physician and leadership talent while satisfying not-for-profit missions and regulatory requirements. A leader in independent consulting, benchmarking, trends and analyses, SullivanCotter has also developed the most widely recognized physician and executive compensation surveys in the United States. SullivanCotter has offices in Atlanta, Boston, Chicago, Dallas, Denver, Detroit, New York, Parsippany, San Francisco and Westport.

Sullivan, Cotter and Associates, Inc.
http://www.sullivancotter.com

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