Physician and advanced practice provider compensation continued to rise in 2023 despite increasing overhead costs and reimbursement challenges, according to a recent survey by the Medical Group Management Association.
The report, which includes salary and productivity data from more than 211,000 providers, found that medical groups are offering higher pay for physicians to compensate for high burnout rates, an underdeveloped provider pipeline and the growing demand for care tied to the country’s aging patient population. In some instances, facilities have offered signing bonuses of up to $300,000 to attract and retain physicians. Providers are also taking on more patients and spending more time with them compared with previous years.
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“While compensation is up a little bit, it’s not nearly to the extent that we would hope,” said Andrew Swanson, senior vice president of product strategy and sales at MGMA. “The moderate rates of compensation increase don't seem to necessarily be keeping pace with the amount of additional work our provider base is doing.”
Here are five things to know about physician and advanced practice provider salaries and how compensation trends have changed over the past several years.
1. Dermatologists, neurological surgeons see biggest gains
Compensation has been rising among nearly all physician specialties. Over the past year, total median salaries rose by 4.4% for both primary care physicians and surgical specialists, according to the survey. Total median salaries for primary care doctors increased to $312,427 in 2023 compared with $299,157 in 2022. Surgical specialists saw median salaries climb to $554,108 in 2023 from $530,649 in 2022. Non-surgical specialist physicians saw a 1.8% increase, to $432,983 in 2023 from $425,265 the previous year.
Dermatologists and neurological surgeons saw the largest gains in total median compensation last year with increases of more than 10%. Only emergency medicine practitioners saw a decrease — 1.7% year-over-year.
The growth in compensation is likely due to many factors, including the same number of physicians doing more work, varying payer rates and the volume of patient cases in different specialties in a given year, Swanson said.
“As people access care differently and for different purposes, you're going to see specialties’ pay commensurate with those [trends],” he said.
As a group, advanced practice providers surpassed physicians’ gains on a percentage basis, with a 6.5% increase in their total median compensation last year. Compared with pre-pandemic levels, advanced practice provider salaries have grown by more than 16%, according to MGMA.
2. It pays to practice in certain states
Primary care physicians in Mississippi reported earning the highest salaries nationwide last year, with providers making 2.5 times more on average than primary care doctors in Alaska, the lowest-paying state. Nevada and South Carolina were also higher-paying states in 2023 for surgical specialists and advanced practice providers.
Southeastern states in particular, including Mississippi, tend to have more private and independent medical practices, which often offer higher provider compensation, Swanson said.
Alaska, the District of Columbia and Wyoming were among the states with the lowest physician and advanced practice provider compensation.
Across the board, physician compensation increased in every region, with the exception of nonsurgical specialists, who saw a 3.4% decrease in pay in Midwestern states.
3. Compensation often tied to quality performance
Fifty percent of the nearly 400 physicians surveyed by MGMA in April said that their organization’s compensation plans are tied to quality performance metrics such as care outcomes and patient satisfaction. In 2019, just 38% of physicians said their compensation was tied to quality.
On average, nearly 25% of primary care physicians’ total compensation is based on productivity, while around 3% is tied to their performance related to improving care quality and the patient experience.
Swanson said he is surprised that the shift in the type of incentives hasn’t been faster, given the aligned interest between payers, providers and patients to improve quality.
“Medical groups that are advanced and thinking about really strong service to the communities that they want to provide care for will evolve physician compensation further and more aggressively over time,” he said.
4. Provider productivity continues to grow
More than two-thirds of medical groups met or exceeded their productivity goals in 2023, with physicians on average seeing more patients per hour and spending more time with them than in 2022.
While the growth in productivity can be seen as a positive from a facility standpoint, Swanson said the reality is that physicians are likely taking on more work to account for provider turnover and a declining number of healthcare workers available to care for patients.
“We can't let this increase in productivity go on and on and on,” he said. “We need to ensure that we're bringing in lower levels of care providers to augment these care teams and unburden our physicians and other medical practitioners.”
5. Physicians help set salary structures
Nearly 60% of medical group leaders reported that physicians have a say in their organization’s compensation methodology. However, that percentage has decreased since 2019, when 67% of respondents to a MGMA survey said physicians were involved in developing salary structures.
At facilities that involve physicians in compensation decision-making, providers are typically surveyed, asked to lead discussions around bonus metrics and invited to participate in physician compensation committees and strategic planning meetings, Swanson said.
