Primary-care providers got roughly half their typical pay bumps in 2020 as volumes dried up and some practices froze salaries to shore up expenses during the COVID-19 pandemic, a new survey finds.
Primary-care providers' total compensation rose 2.6% in 2020 from the prior year, while pay for advanced practice providers grew 1.3% in that time, according to data released Wednesday by the Medical Group Management Association, a professional association for medical groups. MGMA's data cover more than 185,000 providers across more than 6,700 organizations and was captured during surveys conducted in January and February 2021.
Those upticks are "significantly lower" than the raises primary-care providers saw in prior years, and it's mostly because those providers work for systems that not only didn't give raises during the pandemic, but laid off and furloughed workers, said Andrew Swanson, the MGMA's vice president of industry insights.
Some, like Mayo Clinic in Rochester, Minn., even cut physician pay temporarily. For independent physicians, their compensation wasn't technically frozen, but it's dependent on volume, which declined markedly during government-mandated shutdowns of elective procedures.
"That sort of decrease in volume you can't just make up for in a compensation model," Swanson said. "That's why it flattened or froze."
That aligns with a 2020 Merritt Hawkins report that estimated that 18% of physicians treating COVID patients experienced furloughs or pay cuts, compared with 30% of those not treating COVID patients.
At the same time, specialists—both surgical and nonsurgical—saw their total compensation decline almost 2% in 2020 year-over-year. The decline was about 0.9% among surgical specialists and 1.3% for nonsurgical, MGMA found. That fits with the trend in recent years of Medicare driving more dollars into primary care and out of surgical care, Swanson said.
"We're beginning to see some of that become reflected in the last year and prior years of the data," he said. "I think the macro trend is paying itself out."
To be sure, specialists still make far more than PCPs. MGMA's data show specialists made just shy of $440,000 in median total compensation in 2020, while PCPs made about $280,000. However, median PCP compensation has grown faster since 2016 than that of specialists: 11% compared to just under 4%.
MGMA's data show that physician-owned practices were more productive than hospital-owned ones in 2020. For example, physician-owned primary-care practices saw 3,243 total encounters last year, compared with 2,653 at hospital-owned primary care practices. Nonsurgical specialists at physician-owned practices reported 3,451 encounters last year, compared with 2,293 at hospital-owned practices.
The exception was surgical specialists, for which MGMA's data show slightly more encounters in hospital-owned practices than physician-owned ones.
It's more than just patients avoiding hospitals out of fear of catching the coronavirus. Physician-owned practices, whether four providers or 150, are small businesses, Swanson said. During the pandemic, small business owners did everything in their power to stay open.
"They were scrappy," he said. "So anything they could do to see patients, they did in order to keep their doors open, to keep their providers and physicians specifically making money."
MGMA also broke down the differences in hospital-owned and physician-owned practice productivity by specialty. Not surprisingly, hospital-owned pulmonology was down 1,250 encounters compared with physician-owned services. Swanson said that's because pulmonologists were completely cut off from providing ancillary services during the pandemic, as they were exclusively treating COVID patients.
Most specialties were like pulmonology, where hospital-owned practices saw fewer encounters than physician-owned ones. That includes primary care, surgery, orthopedic surgery, obstetrics and gynecology, neurology, gastroenterology and noninvasive cardiology. There were some exceptions, however, including invasive cardiology, dermatology, hospitalists and surgical specialists.
More than 70% of practice leaders told MGMA they plan to hire new physicians in 2021 to make up for unexpected 2020 retirements. That's not going to be easy in an already tight labor market with rising demand for services from the aging baby boomer generation.
"We're in a higher-demand, lower-supply mode for physician recruitment," Swanson said. "It's problematic for these groups."