Survey reports 2.9% average increase in physician compensation for 2017

More than three out of four physician specialties had an average increase of 2.9% in median compensation from 2016 to 2017, according to a new survey conducted by AMGA Consulting, a health care consulting firm in Alexandria, VA.

Compare this 2.9% increase with the rise in the cost of living in the United States (represented by the Consumer Price Index) which grew only 1.2% from July 2016 to June 2017, the Bureau of Labor Statistics reported.

The AMGA 2017 Medical Group Compensation and Productivity Survey included responses from 269 medical groups, representing 102,261 providers. Results of the survey showed that primary care physicians, medical specialists, and surgical specialists each had overall increases in median compensation, although some increases were historically better than others.

Specialties with the largest increases in median compensation included Ophthalmology (7.7%), Cardiac/Thoracic Surgery (7%), Hematology and Medical Oncology (6.7%), Allergy/Immunology (5.9%), Pulmonary Disease (5.6%), and Dermatology (5.2%).

The compensation survey also reported on physicians' productivity, as measured by work relative value units (RVUs). From 2016 to 2017, the weighted average increase in median work RVUs was 1.54% for all providers.

Highlights of the survey's findings:

• 77% of specialties had an average increase of 2.9% in median compensation in 2017 (comparable to a 3.1% increase in 2015).
• Two-thirds of specialties had an average increase of more than 1.5% in median work RVUs.
• Primary care specialists gained an average increase of 3.2% in median compensation in 2017. Median work RVUs for primary care physicians increased 1.3% from 2016.
• Surgical specialties averaged a 2% increase in compensation (down from a 3.6% increase in 2015). Median work RVUs for surgical specialties inched up 1%.
• Other medical specialties saw an average compensation increase 2.8% (akin to a 3% rise in 2015) and an average increase in work RVUs of 1.1%.
• Physicians in the Western US have the highest median compensation values by specialty, while those in the East tend to have the lowest. However, the East had the highest average percent change—6.2%—in compensation values from 2016 to 2017.
• In academic groups, median compensation was 9.7% lower, and median work RVUs were 7% lower, than in non-academic groups.

Slightly more than half—51%—of specialties experienced a decrease in median net collections from 2016 to 2017. For all specialties, median net collections increased 1.14% (weighted average).

"We are seeing signs of a perfect storm gathering as costs continue to rise, productivity is flat, and collections are flat, with 51% of specialties this year reporting a decrease in median net collections," said Tom Dobosenski, CPA, President of AMGA Consulting. "These trends are driving enhanced efficiency and consolidation, but the cost curve will only bend so much."