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The COVID-19 pandemic has had a deleterious effect on physician incomes, with primary care physicians seeing a 55% decrease in revenue and a 20 to 30% decrease in patient volume, according to the latest physician debt and net worth report released by Medscape.
Specialists are facing even more difficulty because they're largely dependent on elective cases, which can't be addressed directly by emergent technologies such as telehealth, the report found.
Despite this, physician earnings are on the rise, and while the pandemic may have had a dampening effect on this trend, the trend itself is still there: PCPs earned $243,000 this year, a 2.5% increase over last year, while specialists earned an average of $346,000 this year, a 1.5% increase.
Overall, the trend suggests that while salaries are increasing, they're doing so at slower rates than are typical -- and practice revenues are down.
WHAT'S THE IMPACT
Half of physicians have a net worth under $1 million and only a small percentage are at more than $5 million, though that proportion could change due to the ongoing public health emergency. Forty-two percent of physicians earned between $1 million and $5 million this year.
Many of the specialties with the highest average income are taking the largest hits because so much of their income comes from elective procedures. One small orthopedics group, for example, projects that income will be down 90% for the year if current conditions continue. Nineteen percent of orthopedists made more than $5 million this year.
PCPs are among those with lower net worths, and many are now seeing fewer patients, limiting practice hours or even shutting down their practices. On the flip side of that, PCPs have one small advantage over specialists in that they can more readily make use of telehealth, especially now that video and phone visits are generally reimbursed at a rate equal to that of an in-person visit, at least during the duration of the pandemic.
Perhaps unsurprisingly, male physicians had more net worth than their female counterparts. Ten percent of males make more than $5 million annually, and that number dips to about 5% for females. Forty-six percent of males make between $1 million and $5 million, while just 34% of females earn the same amount.
While almost three-quarters of physicians have not experienced any significant financial losses in the past year, the rest have, due to a variety of reasons such as bad investments (9%), practice issues such as reimbursement changes (8%), real estate losses (5%) or legal fees (4%).
Physicians cited a number of effective cost-cutting tactics, such as placing up to half of their bonuses into investment accounts, or adding extra amounts to the principals of their monthly mortgage payments.
THE LARGER TREND
The pandemic has significantly altered the job market for physicians, leading to the temporary reduction of both starting salaries and practice options for doctors, according to a 2020 report from Merritt Hawkins tracking physician-recruiting trends.
While there was an increase in physician-search engagements over the 12-month period from March 2019 to March 2020, demand for physicians since then, as gauged by the number of new search engagements, has declined by more than 30%. At the same time, the number of physicians inquiring about job opportunities has increased, which has created an opportune market for those healthcare facilities seeking physicians.
Meanwhile, a new Medical Group Management Association report shows compensation for physicians has largely remained the same, despite the pandemic's impact on patient volume, elective procedure caps and practice closures.
In 2020, compensation for primary care physicians saw modest growth. Many physicians either saw slight increases in compensation or met the previous year's compensation. Between 2019 and 2020 total compensation for primary care physicians increased by 2.6% compared to the three and five-year cumulative increases of 5.27% and 10.15%, respectively.
Countering expectations, most specialties had minimal changes in compensation. Despite limited patient volumes due to regional lockdowns and overwhelmed hospitals, surgical physicians saw a compensation decrease of 0.89% in 2020. Nonsurgical specialists reported a decrease of 1.29%.
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