The potential shift from volume to value has had little apparent impact on current physician compensation levels, which stayed relatively flat in 2017 compared with 2016, based on the results of Modern Healthcare's 25th annual Physician Compensation Survey.
A possible exception is in primary care, which some recruiters say is in strong demand; it saw bigger pay gains in selective situations.
For a second straight year orthopedic surgeons had the highest average annual salary among 23 medical specialties in 2017 with pay ranging from $501,000 to more than $687,000.
Fred Horton, president of AMGA Consulting, said it's been a remarkable year in terms of how stagnant physician compensation has been compared to the past. He cited a decrease in the level at which physician pay is being tied to their personal productivity as a major cause for salaries remaining flat.
In recent years, factors such as personal productivity, the financial performance of the practice and bonuses have steadily made up a larger proportion of a physician's overall compensation. But the rise has in some ways been offset by the fact that more physicians than ever work as employees at hospitals, where a large share of their overall compensation is based on salary. An American Medical Association report released in April found salary made up the largest share of a physician's compensation, at 53% in 2016, compared with 32% that was pegged to productivity.
“When you have flat or lower productivity than what we've seen, the net result is that compensation is flat,” Horton said. “We haven't seen that in the past.”
A March analysis on physician work trends by the Physicians Advocacy Institute in conjunction with Avalere Health found the percentage of doctors employed by a hospital increased by more than 63% from 2012 to 2016.
According to the AMA study, salary made up nearly 70% of compensation for physicians who were employees, compared with 30% among doctors who owned their own practices.
Some of the leading compensation increases in 2017 were among primary-care specialties. Hospitalists, emergency medicine, internal medicine and family practice docs all saw their average pay increase by more than 3%, according to the survey.
For some the pay was much greater. “Our clients had to pay primary care on average about 10% more than they wanted to get them in the door,” said Travis Singleton, executive vice president at Merritt Hawkins, a physician recruiting and clinical staffing firm. “And that just shows you how competitive it is.”
Demand within the primary-care specialty market has not only been a result of hospitals' focus on population health management, but also as a means of addressing the impact of the opioid crisis.
The percentage of doctors who have become certified to prescribe buprenorphine for medication-assisted treatment has increased in recent years from under 3% of all physicians in 2016 to just more than 5% currently.
But even with such high demand, there appears to be no narrowing of the pay gap between specialists like radiation oncologists, who averaged more than $520,000, and family practitioners, who averaged just more than $245,000 in 2017.
“Primary care hit its highest salary for us ever recorded,” Singleton said. “But fundamentally, the way our system pays, it rewards surgical, procedural work and it somewhat punishes diagnostic.”