Despite a weakened economy and cutbacks in reimbursements, America's physicians-particularly specialists such as radiologists, anesthesiologists and cardiologists-are enjoying another prosperous year, reaping increases in salaries and benefits.
In many cases the pay-raise percentages are double digits. As usual, specialists remain at the high end of the salary scale, yet even comparatively low-paid primary-care physicians garnered some sizable pay increases, according to Modern Healthcare's ninth annual physician compensation report.
"There's nothing in the numbers that jumps out as earth-shattering or startling about the salary numbers," says Sean Endicott, vice president of the physician search division at Martin, Fletcher, an Irving, Texas-based physician recruiting firm. "I think they show a continuation of what we've been seeing over the past couple of years: Specialists are in high demand, and they've been in high demand for some time."
Adds Daniel Stech, survey operations director of the Denver-based Medical Group Management Association: "The news isn't bad for physicians, particularly some specialties, probably because of the difficulty some groups are having in recruitment."
But that's not to say that primary-care doctors are going hungry these days. Salaries have stabilized in recent years, yet all but one of the national surveys included in the compensation report indicate that internists earned more in 2002 than they did in 2001-as much as a 9% increase.
"It's really just started picking up for primary care," says Mark Smith, an executive vice president of Irving, Texas-based Merritt, Hawkins & Associates, the nation's largest recruiter of full-time staff physicians.
Martin, Fletcher pegged the average internist's salary this year at $185,000, a 9% jump compared with last year's numbers. Two other surveyors, Coppell, Texas-based Goddard Healthcare Consulting and Philadelphia-based Hay Group, registered increases of 6%. Only one surveyor, Detroit-based Sullivan, Cotter & Associates, showed a decrease, a 6% drop to an average of $151,890.
A wide range of salary numbers was posted for family practitioners. One survey showed a healthy 14% increase, while another reported a 3% drop. The American Medical Group Association, which represents big multispecialty physician groups, says its figures show a drop of about 1% for family practitioners, underscoring a shift in managed care's strict gatekeeper business model.
"We've seen somewhat of a decline in the need for primary-care physicians," says Tom Flatt, the AMGA's editor of corporate communications. "That's probably reflective of the movement away from managed care."
Modern Healthcare's annual physician compensation report is a compilation of surveys and studies conducted by 10 organizations, including associations, consulting firms and staffing companies. The accompanying charts list the average reported annual cash compensation by specialty, as reported by each organization. The size of the samples, types of practices and methodology varied among the organizations that participated in the report, accounting for some of the disparity.
Overall, the increase for all physicians this year is expected to be 4%, a slight improvement from last year's 3.7%, says Rosanne Cioffe, director of reports at Oakland, N.J.-based Hospital & Healthcare Compensation Service.
Although specialists once again were at the head of the class salary-wise, one group truly stands out: cardiologists. They enjoyed some of the highest pay increases in the 2002 survey-and the highest average salaries of all the 15 specialties charted in the surveys. The average salary for cardiologists in the MGMA's survey was a hefty $356,721, a 9% increase from last year's $327,681. Eight of the other nine surveys also showed increases, including a 39% jump registered by Hay. (Year-ago figures were not available for MD Network, based in Kingsville, Texas.)
Only the survey by the Hospital & Healthcare Compensation Service veered from the norm-and sharply-with cardiologists' salaries plummeting 21%, to $202,965 from $257,476. Cioffe says the huge disparity is attributable to a decrease in the pool of high-paying participants in the survey, and not the actual salaries paid to cardiologists.
Radiologists were right behind cardiologists among the highest-paid physicians, earning an average of $345,265 per year, according to the MGMA's survey (despite a 3% decrease compared with last year). Seven of the other nine reporting groups say radiologists earned salary increases, with Goddard pegging the raise at 34%, boosting compensation to $310,000 for this year, versus $230,500 in last year's survey.
Among the other big earners, all based on MGMA statistics: urologists, earning an average of $336,439; oncologists, earning $320,343; and anesthesiologists, earning $309,834.
Obstetricians/gynecologists, among the hardest-hit by skyrocketing medical malpractice premiums, saw their salaries dip in six of the nine surveys. (Year-ago figures were not available for this specialty from MD Network.) Those decreases were as high as 8%. Part of the trend may result from a willingness by these specialists to accept lower salaries if their employers contribute to insurance costs, Smith says.
Despite optimistic trends cited by some survey firms for primary-care doctors, they tend to trail their peers in annual compensation, the reports show. The average salary for a family practitioner was $182,768, according to the Hospital & Healthcare Compensation Service; internists made $185,000, according to Martin, Fletcher; and pediatricians earned an average of $164,375, according to the MGMA. All three were the highest salaries reported in each specialty.
Stech also says many primary-care doctors appear to be billing more to earn the same or a slightly higher salary. While MGMA statistics indicate that family practice physicians' salaries increased 3%, those doctors also showed a 10% increase in gross charges, he says. Gross charges jumped 11% for internists, whose salaries rose 2%.
"They're working harder just to maintain their incomes," Stech says.