Techno-savvy baby boomers flush with cash, getting up in years and unwilling to seek gatekeeper approval for referrals are powering a swing in the compensation pendulum back toward specialists.
"Boomers have changed television, they've changed banking, they've changed the housing industry, they've changed retail, and now they're changing healthcare," says Morley Robbins, senior consultant for Arista Associates in Chicago.
While demand for generalists wanes, demand for specialists far exceeds supply, says Mark Smith, eastern division vice president for Merritt, Hawkins & Associates, which recently published its 2000 Review of Physician Recruitment Incentives.
"It's been a radical adjustment," says Smith, who is located in the Atlanta office of the physician recruitment and consulting firm. "I'm being turned down by neurosurgery residents right now who are looking for $400,000."
Such goals are edging closer to reality, Smith says. Positions offering attractive compensation packages are so plentiful for some specialties that countless interviews could be scheduled for a single candidate. "We literally have to narrow it down with dollar amounts and geographical areas."
Salaries are on the rise across specialties, says David Gans, survey operations director for Englewood, Colo.-based Medical Group Management Association, which will release its 2000 Physician Compensation and Production Survey on Sept. 15.
"The increase in specialty salaries is greater than the increase in primary care salaries, which reverses a trend that has occurred for several years."
But those gains have come at a steep price, Gans says. "Specialists have done it the old-fashioned way--they've earned it."
Extra hours of labor packed with procedures are propelling the rise in compensation, yet failing to generate proportional benefit, Gans says. "Their increases in compensation have come through an increase in productivity, and their productivity increases have been at a rate higher than the change in compensation."
Still, evolving clinical technologies do afford specialized physicians an economic edge over generalists, Gans says. "While primary care docs may be reaching the relative limit where increased productivity results in increased compensation--because you can only pack so many office visits into a day--advances in technology enable specialists to further enhance productivity through new procedures and more efficient production of existing procedures."
Baby boomers are spurring demand for specialists by jumping on the Internet to research health concerns and then self-referring, says Michael Hutchens, senior vice president of Cejka & Co.'s consulting division in Nashville, Tenn. "The No. 1 hit on the Internet is healthcare."
Smith says demographic-driven specialties are under pressure from aging boomers, who are armed not only with health information gleaned online but purchasing power courtesy of a flourishing stock market.
Cardiology, urology, gastroenterology, orthopedics and oncology specialists have snagged particularly attractive compensation packages in the past four months.
"Those are the big five. They've continued to be very difficult, very expensive searches. The need is overwhelming."
Vascular surgeons are fetching starting salaries of $250,000 and more, Smith says, up from $175,000 only a year ago. Compensation for radiologists and anesthesiologists also is soaring. "It's the closest thing to overnight I've seen."
Smith, who has recruited for a dozen years, says he beat the bushes for primary care doctors through much of the '90s. "Over the last two years, the trend started switching to specialists."
The call for generalists, triggered by President Clinton's advocacy of the gatekeeper concept, dwindled because residency programs overemphasized primary care and baby boomers balked at jumping through the requisite primary care hoop imposed by HMOs, says Smith.
Boomers typically are professional, discriminating consumers willing to fork over extra money for plans permitting self-referral, Smith says.
That has had a ripple effect on the nation's fluid healthcare delivery system, says Hutchens.
"HMO growth has slowed dramatically from early projections. Point-of-service and layered plans are becoming more popular, being offered more."
But Cejka's Hutchens, who has perused a spate of compensation surveys, doubts physicians of any stripe have gained appreciable economic ground.
While income growth for specialists outpaces that of generalists, the gains are modest, says Hutchens. "Those that are up, are just up. They're not big numbers. Surveys are ranging wildly. It's tough to gauge. It's so mixed; it's so regional. It's all over the map."
National statistics also fail to capture regional trends, he says. "Compensation in the Midwest and Southeast is keeping pace with inflation, but both coasts are under water. We're hearing success stories, and we're hearing disasters--it really depends where they are."
Kathy Young, medical consultant for Monroe, La.-based PRI-MED Search, is seeing her share of success stories. "We have more recruiting assignments for specialists than at any other time. There's still a need for primary care physicians, but not as much as there used to be," Young says.
"The value of the specialist is on the rise, as the whole concept of gatekeeping dies," Robbins says. "It puts the primary care physicians in a very precarious position as to what role they are going to play. They're in the middle of a sea change."
Robbins says generalists who are more likely to weather the gathering storm are those who counteract slackened demand by becoming more "consumer-centric"--embracing communication technologies, providing swift test results and welcoming patient input.
"Docs need to be sensitive to patients' changing expectations. The patient is going to emerge as a quasi-partner within 10 years or so. And patient as partner is completely different from patient as patient," says Robbins.
"All healthcare providers are going to have to involve the patient much more in the decision-making process," says Thomas Flatt, editor of corporate communications for Alexandria, Va.-based American Medical Group Association, which tracks compensation and productivity data.
"The old model of the physician dictating to the patient is swiftly eroding," Flatt says. "You will not see that in the future. In order to compete, primary care physicians in particular are going to have to modify their practice style to accommodate consumer demand."
Linda Boone Hunt is a Prescott, Ariz.-based investigative reporter and feature writer.