Some 20 years ago, when Dr. Michael Steinberg was already well into his radiation oncology career, physicians in his specialty enjoyed a good lifestyle as well as a good income
“In the 1990s, the day wasn't as full,” said Steinberg, immediate past board chairman of the American Society for Radiation Oncology. “When you got good at this, you could get it done pretty quickly.”
Now, however, he and his colleagues often work 60-hour weeks. And according to the 21st annual Modern Healthcare Physician Compensation Survey,
radiation oncologists are doing this for 7.9% less pay than they earned the year before.
The pay cut for radiation oncology was the largest year-over-year change seen in the 2014 survey, which compiled data from 13 recruiting firms, consultants and professional organizations. Most of the 23 specialties tracked by Modern Healthcare saw little or no income gain or loss. Twelve specialties saw increases, while 11 reported decreases. But with a few exceptions, most of the changes were statistically insignificant.
Experts say there are many reasons for the flat income trend, including the sluggish economy, the slow transition from volume- to value-based payment, growing physician employment, productivity-enhancing technology, productivity-depressing electronic health records
, a declining U.S. birth rate, lower utilization, lower insurer payments and younger physicians' desire for fewer work hours.
“It's a complicated time,” said Dr. Lynn Massingale, co-founder and executive chairman of TeamHealth, a Knoxville, Tenn.-based physician-outsourcing firm. “And it's an easy time for doctors to be pessimistic.”
Modern Healthcare's physician compensation figures in this article for each specialty are averages compiled from physician pay surveys published by 13 associations and companies, including the Medical Group Management Association, the American Medical Group Association, Jackson & Coker and Compdata Surveys. Organizations used different methodologies for their doctor-pay surveys.
The MGMA, for example, obtained tax information from almost 4,200 healthcare organizations on how they compensated more than 51,000 doctors in terms of salary, bonuses and incentive payments in the first quarter. The Hospital & Healthcare Compensation Service surveyed 283 organizations and received information on how much nearly 41,500 physicians were compensated between December 2013 and February 2014. (For a description of each data supplier's methodology, see p. 32).
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the charts for Modern Healthcare's 21st annual Physician Compensation Survey
Of the 12 specialties that showed increases in this year's Modern Healthcare survey of surveys, only five enjoyed pay hikes that exceeded the 1.5% general inflation rate reported by the Consumer Price Index for 2013. Those five were: oncologists, 5.6%; neonatologists, 5.5%; intensivists, 4.5%; plastic surgeons, 2.7%; and obstetrician-gynecologists, 2.4%. By contrast, in last year's survey, 15 specialties cleared the 1.7% inflation rate, while seven specialties topped the 3.2% inflation rate two years earlier.
“We're seeing compensation levels about the same as last year,” said Massingale, whose company recruits about 1,000 anesthesiologists, emergency physicians, hospitalists and pediatricians a year. “But we see huge variability region to region.”
Uwe Reinhardt, a Princeton University health economist who has written about physician pay, said doctors shouldn't complain. He pointed out that median U.S. household income decreased from $56,000 to $52,000 in recent years. “The median income of patients they serve has fallen, so they should fall on their knees and thank God their income has remained flat,” he said. “Physicians have to realize that they are covering their lifestyles out of the paychecks of the patients they serve.”
Some specialties, however, may temporarily “make hay” as a result of a scientific or technical breakthrough, such as the development of cardiac stents, which boosted cardiologists' compensation, he added.
In the 2014 Modern Healthcare survey, oncology-hematology specialists saw the largest average pay increase, with their compensation growing 5.6% to $395,896. Dr. Jeffery Ward, chairman of the American Society of Clinical Oncology's Payment Reform Workgroup, speculated the increase was a result of higher compensation packages developed by hospitals to recruit oncologists.
Of the 11 specialties that saw pay decreases, losses were 1.5% or less for six of them. While radiation oncologists saw the largest drop, they still were the fourth-highest paid specialty, even as their average compensation dropped from $479,917 to $441,602.
Steinberg said patient volumes for radiation oncologists have dropped as new technologies have emerged, such as stereotactic body radiation therapy, which requires only five treatment sessions compared with 40 or more for intensity-modulated radiation therapy.
Ward said the 2003 Medicare Modernization Act has led to lower pay for cancer care. “It took all the Medicare profit out of oncology, and now private insurers have put the squeeze on as they move closer to Medicare reimbursement rates,” he said.
Bob Collins, managing partner of the Medicus Firm, a Dallas-based physician-staffing service, said the pay increase for oncology-hematology specialists may be the result of doctors seeing more patients and doing better at managing costs.
Neonatologists—who saw the largest increase in Modern Healthcare's 2013 survey with an average pay increase of 11.9%—registered the second-highest increase at 5.5% in the 2014 survey, rising to an average compensation of $311,563. But there are competing factors that may affect future growth.
Dr. Barry Chandler, a neonatologist and senior vice president of Sheridan Healthcare, a Sunrise, Fla.-based provider of anesthesia, emergency department, neonatal and radiology management, said neonatology is experiencing an aging physician workforce, which could reduce supply and drive up pay. “The median age is 54, and that's pretty old for a specialty that requires such intensive training and workload,” he said. “I'm 67, and many of us who trained in the mid-'70s are retiring.”
On the other hand, he said, neonatal intensive-care unit patient loads have dropped. That's mostly because U.S. births have declined. In addition, the growing policy of discouraging elective deliveries before the 39th week of pregnancy has led to fewer NICU admissions. Those factors may lead to NICU closures.
For the sixth straight year, orthopedic surgeons and invasive cardiologists were the highest-paid specialists in the survey, earning an average of $522,659 and $491,126, respectively. But orthopedic surgeons' average compensation was flat after showing 3.2% growth in last year's survey. Invasive cardiologists' pay fell by 2.8%.
Commenting on his specialty's 0.02% average pay increase in this year's survey, Dr. Tom Barber of Oakland, Calif., who chairs the American Academy of Orthopedic Surgeons' Council on Advocacy, said, “It's hard to say if it's a downward trend.” He attributed the flat growth mostly to Medicare's decision to reduce payments for total hip replacements by 5% and for total knee replacements by 12%.
Also for the sixth straight year, family physicians and pediatricians finished at the bottom of the compensation ladder, with family physicians moving slightly ahead of pediatricians. With an average increase of less than 0.4%, family doctors were the only primary-care
specialists to see a raise, to $209,789. Pediatricians—who saw an average increase of 3.6% in last year's survey—saw their pay fall 1% this year to $207,723. Internists reported an average compensation loss of about 0.3%, falling to $231,533.
Travis Singleton, senior vice president of Irving, Texas-based physician recruiter Merritt Hawkins, said he's seeing internists caught in a box, with routine cases increasingly handled by nurse practitioners or physician assistants, while more complex cases go to subspecialists.
One expert said doctors shouldn't complain about stagnant pay because it's better than the falling income their patients are experiencing.
Dr. William Weeks, a senior research scientist at the Dartmouth Institute who has studied physician compensation, said the overall flat pay levels may be the result of younger doctors choosing to work fewer hours, and more women entering medicine and generally making less than men.
Collins said compensation offers have been complicated by the nonmonetary demands new doctors are making. “Each year, new physicians by and large are not as financially motivated as their predecessors,” he said. “Quality of life is a bigger issue, and they are more likely to trade compensation increases for a better call schedule.”
Dr. Atul Grover, chief public policy officer at the Association of American Medical Colleges, said that despite an average undergraduate and medical school debt of $169,900, income expectation is not necessarily a major factor in specialty choice among 2013 medical school graduates. Factors such as work-life balance, future family plans, role model influence, options for fellowship training, and fit with personality, interests and skills ranked above income in a recent AAMC survey.
Steinberg, chairman of the radiation oncology department at the University of California Los Angeles, said he's noticed that there are usually other factors besides income potential—such as having a close relative die of cancer—that motivate students to go into radiation oncology. He said UCLA has 220 applicants vying for two residency slots in radiation oncology that open up each year.
The 7.9% dip in pay won't deter young physicians from choosing radiation oncology. “If you have a bent toward managing serious illness, this is it,” he said. “The patients are facing life-threatening situations. It brings out the best in people.” Follow Andis Robeznieks on Twitter: @MHARobeznieks