Compensation among most physician specialties increased slightly in 2021 compared to the previous year, according to new data from the Medical Group Management Association.
Compensation plateaued in 2020 as providers dealt with the onset of the COVID-19 pandemic and a decline in nonessential healthcare services. Those trends reversed for most specialists last year, the MGMA reports.
Surgical specialists, who saw the one of the largest pay declines in 2020, experienced a median 4% compensation increase that raised median income to $517,501 last year, the study found. Median primary care physician compensation rose 2% to $286,525 in 2021. Doctors coming out of residency had median earnings that were 7%-10% greater in 2021 than in the prior year, the data show.
Physician compensation varied widely by geography, the MGMA found. For example, the median primary care provider in Mississippi made $102,462 more than a counterpart in Arizona. and the median surgical specialist in Nevada earned $612,630 more than one in Idaho, the study found.
Physician compensation has steadily climbed for years and there eventually will be a breaking point, said Andy Swanson, the MGMA's vice president of industry insights.
In some smaller markets, physician practices will be unable to afford high rates for subspecialists and will have to refer patients to larger metropolitan areas for care, Swanson said. Employers have to balance inflation with higher wages, while also considering patient volumes and worker productivity, he said.
"They're trying to keep wages as flat as possible," Swanson said.
These trends are aided by consolidation in the healthcare market, which limits competition and allows employers to curb compensation growth, he said. At the same time, employers will need to be careful not to depress wages too much while demanding higher productivity or physicians will look elsewhere for work, he said.
"Groups need to make sure they're making their environments amenable for physicians to practice in, or they'll see the pendulum swing the other way," Swanson said.