Most physicians in medical groups saw an increase in compensation from 2010 to 2011, says a survey by the American Medical Group Association (AMGA), but that good news was tempered by operating losses.
Sixty-nine percent of specialties reported in AMGA’s annual Medical Group Compensation and Financial Survey experienced compensation increases in 2010 but every geographic region suffered operating losses.
The AMGA sent its survey to more than 2,700 medical groups nationwide. Valid responses from 239 medical groups, representing 51,700 providers, were used to determine the survey results.
Primary care specialties saw a compensation increase of about 2.6 percent, surgical specialties saw an average increase of around 3.8 percent and other medical specialties had an average increase of about 2.4 percent.
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“The modest increases seen this year reflect the negative impact of declining reimbursements, competition for specialists, the cost of new technology and other factors on practice revenues in most parts of the country,” said Donald Fisher, PhD, AMGA’s president and chief executive officer in a statement released with the survey results.
On the downside, the AMGA survey found that in 2010, not one geographic region reported a positive operating margin. Medical groups in the eastern region reported an average loss of $1,597 per physician; the southern region, a loss of $1,870 per physician; the northern, a loss of $10,669 per physician; and the western region, the only region close to breaking even, a loss of $27 per physician.
“It is not surprising that the operating margins of physician practices are suffering,” said Mark Jarvis, senior director of practice economics at the Ohio State Medical Association. “During this time of flat reimbursement from both government and private payers, the costs of running a medical practice have increased year after year. The result has caused many physicians to close their practices or merge with a health system or hospital. The health systems are becoming larger and covering larger geographic areas thus reducing competition in the healthcare market, which may ultimately cause prices to go up for patients.”
The AMGA survey did find that the negative operating margin is in part due to the increased integration of medical groups and health systems. Thirty percent of survey respondents said a median $48,557 per physician in health system funding was provided to support the medical group, which had the effect of replacing income not credited to the medical group.
The survey also noted that physician productivity as determined by relative value units (RVUs), as a whole, decreased by approximately 0.4 percent while physician gross charges increased, overall, about 0.97 percent.