Physicians' net incomes rebounded strongly in 1995 from a much-publicized drop a year earlier-a drop that organized medicine attributed in part to the rise of managed care.
Last year, the American Medical Association cited managed care as one of the three leading causes of the income decline. The other two factors were increased practice expenses and flat reimbursement from Medicare.
This year, the AMA said managed care is "not necessarily the most important factor" affecting physician income.
In fact, the AMA reported that the percentage of physicians with managed-care contracts shot up to 83% in 1995 from 77% in 1994. However, physicians' share of revenues from treating managed-care patients remained at about one-third.
According to figures made available upon request from the Chicago-based AMA last week, physicians' average net income jumped 7.2% to $195,000 in 1995. Their median net income rose 6.7% to $160,000.
The jump in average income was nearly three times the general inflation rate in 1995, and it was the highest annual increase in average physician income recorded by the AMA since 1989, when it rose 7.7%.
That's a sea change from 1994, when the AMA reported the first decline in physicians' income since the association began tracking figures 15 years ago. That year, physicians' average income dipped 3.6%, while their median income slipped 3.8%.
In November 1995, the association provided the 1994 results to the New York Times, nearly two months before making them publicly available through its annual report on physician socioeconomic issues. The Times ran the story on its front page, generating national media attention that attributed the drop in income to managed care.
The AMA this year was hesitant to blame managed-care plans for squeezing physicians' wallets by controlling reimbursement rates to doctors.
"The opposing results for the last two years illustrate the danger of drawing long-term conclusions based on change in one year alone," the association said this year.
The AMA also pointed out that the ranks of self-employed physicians, who earn more than employed doctors, have continued to dwindle (See related story, next page).
The 1995 increase exceeded inflation for that year. The Consumer Price Index, a measure of overall inflation, was 2.5%. The medical component of the CPI was 3.9%.
Adjusted for inflation, physicians still earned 1.4% less in real terms in 1995 than they did in 1993, the AMA said. That followed 12 years of annual gains that averaged 2.1% above inflation, it said.
Income changes varied widely by specialty, with primary care seeing better-than-average gains. For example, general and family practice physicians saw an increase in median income of 12.7% to $124,000. An exception was internal medicine, for which median income was unchanged.
In terms of averages, obstetrician-gynecologists enjoyed the largest gain-a whopping 21.9%. Physicians in the Northeast enjoyed the biggest average gains, with those in the north-central region receiving the smallest increases.
The statistics cover nonfederal patient-care physicians, excluding residents. They draw from telephone interviews with about 4,000 physicians, including non-AMA members.