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The long-awaited 2024 MGMA DataDive, a federally recognized provider data set known for its precision and timeliness, has finally been unveiled. This data set provides unparalleled insights into physician and advanced practice provider compensation and is immensely important in the healthcare industry. It keeps you, the physician, well-informed and up-to-date. Many facilities and consultants still consider it the ‘gold standard’ in physician compensation data at this time, although better alternatives may emerge in the future.

The MGMA DataDive is not just a collection of data. This comprehensive study delves into physician, dental, and advanced practice provider (APP) compensation across various specialties, geographies, and roles or practice types. Its thoroughness ensures the reliability of the data, providing a practical foundation for analysis. This empowers you to make informed decisions for your practice, based on the most current and accurate information available.

It’s important to note that while MGMA DataDive’s comprehensive data represents only a fraction (less than 15%) of the provider population, other more robust datasets have surpassed MGMA. This article is an introduction to a series of articles. It will highlight key findings, report on provider trends, and broadly understand how healthcare providers contribute to the economy.

Keeping up with inflation

According to the latest job report, the labor market—the supply and demand for labor in a particular market—and the economy are cooling. More than 8 million jobs were available in April 2024, but there continues to be a shortage of skilled workers, particularly physicians.

Some reports, such as MGMA DataDive, suggest that “inflation has cooled, but the demand for high-quality care has not.” A more accurate statement is that the inflation rate is easing, but due to recent inflation, high prices persist and will likely hang around for a while.

While physicians and advanced practice providers (APPs) have experienced an overall increase in compensation of more than 16% in the past five years, it’s important to note that the consumer price index (CPI), a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services, stands at 20.60%. Therefore, healthcare providers are catching up but still have some work to do.

APPs saw the most significant increase of 6.47% in compensation in the past year (2023). Physician compensation increases were most important for primary care providers and surgical specialists, respectively, at 4.44% and 4.42%. The laggard has been nonsurgical specialists at only a 1.81% increase last year and a 6.08% increase for the past five years.

The trend is toward better provider compensation, but there is a decreased focus on physicians, particularly those who do not do surgical procedures, and an increase in physicians who can generate more revenue with procedures and lower-salaried APPs as replacements for physicians in certain areas.

It is no surprise that hospitals face headwinds, including higher interest rates, labor costs, staffing shortages, and patient competition. Overall expenses are skyrocketing, energy being a major driver. Administrators are looking toward cost-saving measures, healthcare IT solutions, and pharmaceutical services to bridge the gap between what they pay physicians in various specialties and locations.

Productivity trends

Despite most physicians being employees, physician-owned practices have a persistent advantage in higher productivity levels in collections, total encounters, and work relative value units (wRVUs) for most specialties. The most significant differences in collections are for nonsurgical specialties, and these physicians are working harder than ever.

According to the American College of Surgeons, dire warnings exist about current and future shortages of surgeons. The reasons include dynamic changes in the surgical workforce, technological innovations, shifting lifestyles, and international migration.

As a result, while surgical specialists saw improvements in collections, total patient encounters decreased. No other physicians or APPs experienced this trend.

Selected specialties saw a mismatch

While median total compensation for physicians overall was modestly higher in 2023, physician compensation trends highlighted healthcare market trends. While most physicians worked harder, they made more money. Still, others saw a mismatch between the change in compensation and the change in work relative value units (wRVUs), a measure of the relative value of physician work, last year.

The specialties that experienced significant increases in pay for minimal or unfavorable changes in wRVUs include:

  • Cardiology: Noninvasive
  • Dermatology
  • Ob/Gynecology
  • Pathology: Anatomic and Clinical
  • Psychiatry
  • Pulmonary

These specialties reaped the benefits of more pay for less work.

The specialties that experienced nominal increases or decreases in pay for increased wRVU changes include:

  • Cardiology: Invasive
  • Emergency medicine
  • Ophthalmology

These specialties saw the opposite: less pay for more work.

The most alarming statistic on these lists is emergency medicine. Our emergency physicians are likely being overworked and underpaid in many locations.

By region

Geographic location always plays a vital role in physician compensation. For the third year in a row, primary care physicians, for example, earned the most in Mississippi, one of the poorest states in the US.

Surgical specialists generally saw the best compensation in South Carolina and Alabama. Nonsurgical specialists were paid the most in Mississippi and New Mexico. APPs did the best in Nevada and California.

As expected, specialty providers who had just completed residency or fellowship or were newly hired experienced higher salaries than primary care physicians. Nonsurgical specialists saw decreases in pay in the Midwest.

Quality measures

The trend for using quality measures, a standard or agreed-upon measure of healthcare quality, to determine physician compensation continues to accelerate. The MGMA DataDive reports quality measures as high as 50% in compensation methodologies, although many physicians are not experiencing that locally.

Quality metrics are the future for many healthcare organizations. The critical focus areas are improved quality of care, expanded provider reach, improved patient experience, cost reduction, and workflow efficiency. The question remains how quality metrics can be measured accurately.

Summary

Physicians face new challenges with the changing healthcare landscape. The 2024 MGMA DataDive highlights essential information for all physicians, but how can physicians understand and use the data when negotiating physician contracts?

Physicians and their employers need support. Employers need help improving efficiency, optimizing resource utilization, controlling costs, and mitigating risks. On the other hand, physicians need assistance negotiating their best compensation and career moves. This need for support clearly indicates the complexity of the healthcare industry and the importance of having the right guidance.

Contact the experts at Contract Diagnostics for the latest information about using the MGMA DataDive to your advantage. Remember, the MGMA DataDive is from 2023 and is always a year behind. Contract Diagnostics has the most recent 2024 numbers.

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About the author

Jon Appino is the Founder and CEO of Contract Diagnostics. He has spent over a decade disrupting the contract review space. He has discussed thousands of contracts with physicians and understands the challenges and opportunities of understanding how your story matters in compensation discussions. He passionately advocates for physicians and believes they deserve to be compensated fairly. He also firmly believes in the power of data and technology to improve the healthcare system.

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