What is the number one section that physicians turn to on the initial review of their contract? Compensation! How do we know we are being paid appropriately? To understand whether we are receiving fair pay, you can reference my blog here for more details. In today’s blog, let’s focus on the 2022 MGMA data that was just released.
MGMA is one of the leading surveys regarding physician compensation and releases a new data set every year. In May of this year their latest set was released and in summary, compensation is looking up for physicians! After 2 years of pandemic related changes and stressors, pent up demand for healthcare, an aging population coupled with a physician shortage, decreasing RVUs and patient encounters, and for many, decreased pay, physicians can begin to sense some return to normalcy.
To highlight a few areas that I found particularly fascinating:
Compensation reached or exceeded pre-pandemic levels
Across the country and across provider types, median total compensation increased between 2019 and 2021. The highest change seen was for primary care providers in the south, who saw a 7.29% increase in their median total compensation. By specialty, the greatest change in total compensation was for ophthalmology (6.97%) and general orthopedic surgery (6.88%). The lowest changes were for emergency medicine (0.78%), diagnostic radiology (-0.14%), and neurological surgery (-0.23%). On average, specialties saw a 2-4% increase in total compensation.
One particularly impressive change was that new residency graduates hired to a practice in 2021 earned 7-10% more in their salary guarantee than those hired in 2020. Timing matters!
Regional differences are dramatic. By state, providers may make hundreds of thousands of dollars more for the same position that their colleagues in another state. This is true from primary care to surgical. As a reported example, “surgical specialty physicians in Nevada earn about $612,000 more than their counterparts in Idaho, and nonsurgical specialty physicians report earning about $372,000 more in Mississippi than their counterparts in Idaho.” Interestingly, Idaho ranked as the lowest-paying state for median total compensation across 3 of 4 listed provider type categories: surgical specialists, nonsurgical specialists, and APPs. For primary care, Arizona ranked as the lowest-paying state.
Productivity as quantified by median work RVUs returned to pre-pandemic levels
Between 2020 and 2021 the average percentage increase in median wRVUs was 14.3%.
The Delta- and Omicron-variant COVID surges did impact patient volumes. Delta spike in summer 2021 was reportedly minimal, with 15% of practices reporting decreasing volumes. The Omicron surge however limited elective surgeries and caused dramatic staffing shortages due to COVID exposures, which overall led to fewer encounters.
Interestingly, by practice ownership, physician-owned practices reported higher productivity in collections and wRVUs despite fewer encounters compared to hospital-owned counterparts.
On the horizon
The MGMA data set also reports on pending changes for the upcoming year(s).
An AMA study looking at physician practices reported that now only 49.1% of physicians report working in a physician owned practice. The trend toward larger, employed practice is accelerating and this marks the first time the majority of physicians are not in private practice.
The most common compensation methodologies reported are 100% salary (25.5% of respondents) and “other” (38% of respondents). Unfortunately “other” is not any further defined. 28.3% of practices reported incorporating quality metrics along with salary/production. Of note, the plans that incentivize production have greater compensation than those on salary models in both physician-owned and hospital- and health system-owned practices: primary care physicians in a physician owned practice earned $301,514 on salary versus $315,421 on productivity. For their hospital and health-system owned counterparts, salary was $251,774 versus productivity at $273,286. And those plans that included quality metrics often compensated even higher.
The primary take-home point from this survey is that your compensation should be higher this year than it has been in the past two years. If you signed a contract during the pandemic with compensation based on pandemic productivity levels, it is high time to renegotiate your compensation with these new values. If you are looking at a new job, I encourage you to confirm that the latest MGMA data sets are being utilized as a reference so you are being offered an appropriate starting salary, especially if your contract locks you into that guaranteed rate for 2-3 years. If you would like to review the MGMA data specific to your specialty and region in more detail, please do not hesitate to contact us at Contract Diagnostics. For many of you, our Compensation Rx package may be just what you are looking for to help you negotiate improved, fair pay. Know your value and let us help you achieve it.
Source: Provider Compensation: An MGMA Data Report. “Provider Pay and the Pandemic: Realizing Recovery.” May 2022.
Image source: “Sneak Peak: 2022 MGMA Compensation and Production Data Update.” MGMA Data Dive. 2022.