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Physician compensation rises 10 percent in 5 years, linked to doctor shortage

Practices offered more benefits to attract and retain physicians.

Jeff Lagasse, Associate Editor

Primary care physicians' compensation rose by more than 10 percent over the past five years, according to a new report from the Medical Group Management Association. This increase, which is nearly double that of specialty physicians' compensation over the same period, was cited as further evidence of the worsening primary care physician shortage in the American healthcare system.

A closer look at this data shows that this rise in compensation is not necessarily tied to an increase in productivity. When broken down by primary care focus, family medicine physicians saw a 12 percent rise in total compensation over the past five years, while their median number of work relative value units, or work RVUs, remained flat, increasing by less than 1 percent. 

Practices offered more benefits to attract and retain physicians, including higher signing bonuses, continuing medical education stipends, and relocation expense reimbursements.

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Chief among reasons for the primary care physician shortage is an aging population, which is outpacing the supply of the chronic care they need. Physicians themselves are aging, also, which further compounds the problem. According to Janis Orlowski, chief healthcare officer for the Association of American Medical Colleges, there will be a shortage of 45,000 to 105,000 physicians within the next several years. Because of this, organizations are placing a premium on primary care physicians' skills.

Further supporting this trend, the new survey identified meaningful growth in compensation for non-physician providers over the past 10 years. Nurse practitioners saw the largest increase over this period with almost 30 percent growth in total compensation. Primary care physician assistants saw the second-largest median rise in total compensation with a 25 percent increase.

Over the past five years, rises in median compensation varied greatly by state. In two states, median total compensation actually decreased for primary care physicians: Alabama with a 9 percent drop and New York with a 3 percent decrease. Many states saw much larger increases in median total compensation compared to the national rate, the top five being Wyoming with 41 percent; Maryland with 29 percent; Louisiana  with 27 percent; Missouri  with 24 percent and Mississippi with 21 percent.

Current median total compensation for primary care physicians also varied greatly by state. The District of Columbia is the lowest paying with $205,776 in median total compensation. Nevada is the highest paying state at $309,431.

Twitter: @JELagasse
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