Some practicing docs earn more than hospital CEOs

Physicians who are productive and generate big revenue for the hospital systems that employ them will continue to earn high compensation, sometimes higher than hospital CEOs, experts say.

Doctors who maintain a busy medical or surgical practice while helping steer organizations through changing business and regulatory environments are especially highly prized. “Those who can do this successfully are worth their weight in gold,” said Travis Singleton, senior vice president at physician staffing firm Merritt Hawkins.

The number of physicians employed at a not-for-profit organization who earned $1 million or more in total compensation was 476 in fiscal 2012, or 6.6% of all physicians who are employed by a not-for-profit organization, according to a Modern Healthcare analysis of Internal Revenue Service Form 990s. But only a few of these high earners were CEOs.

Of the top 25 highest-paid physicians, 10 were CEOs; some practitioners were compensated more than their bosses. Dr. Brian Cohen, an orthopedic surgeon at Adena Health System in Chillicothe, Ohio, was paid about $2.8 million in 2012, while Adena CEO Mark Shuter made $921,205.

The median compensation for all physicians reviewed was $384,948, while the median of the top 25 was $3.1 million. Many physicians are paid at least partly on productivity, and those who are more productive than the average earn commensurately higher incomes, Singleton said.

Hospitals are paying competitive guaranteed salaries to recruit physicians, Singleton said. But the highest earners usually are hard-working superstars in their clinical fields. “These are physicians in the highest-earning specialties who are particularly productive,” he said.

These doctors generate substantial revenue for their healthcare organizations, said Gary Cook, executive vice president at Pacific Cos., a physician staffing firm based in Aliso Viejo, Calif.

Individual doctors in some specialties such as gastroenterology and cardiology can generate millions a year in annual revenue and create ancillary revenue opportunities as the patient receives additional care, he said.

Physicians will continue to have the opportunity to earn more than CEOs, Cook said. Hospitals and health systems are acquiring practices and employing physicians as they create integrated delivery systems. The pressure for hospitals to deliver high-quality care while driving revenue has only increased. “Hospitals need physicians,” he said. “Physicians don't need hospitals.”