Spe­cial fea­ture: Com­pe­ti­tion for prac­tices pushes up doc salaries

Com­pe­ti­tion for many spe­cial­ists con­tin­ues to drive physi­cian salaries higher, an­nual sur­vey shows

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The trend by hospi­tal and large med­i­cal groups to em­ploy physi­cians is driv­ing up com­pen­sa­tion, but pay­ers are not in­creas­ing re­im­burse­ment for health­care ser­vices de­liv­ered, cre­at­ing dif­fi­cul­ties for those who must re­cruit and re­tain staff doc­tors.

“It’s a chal­lenge to keep up with the mar­ket be­cause we don’t see pay­ments go­ing up,” says Dr. David Spahlinger, se­nior as­so­ciate dean for clin­i­cal af­fairs at the Univer­sity of Michi­gan Med­i­cal School. “So we have to cover those salaries with other rev­enue.”

Spahlinger, also ex­ec­u­tive di­rec­tor of the fac­ulty group prac­tice, cites how Medi­care re­im­burses 20% less than it did 10 years ago for an aor­tic valve re­place­ment, but notes that car­diac sur­geon salaries continue to rise. “That isn’t be­ing driven by payer pol­icy,” he says. “It’s driven by hos­pi­tals and sys­tems fight­ing over them.”

In a break­down of its re­cruit­ing as­sign­ments from April 1, 2011, to March 23, 2012, Irv­ing, Texas-based staffing com­pany Mer­ritt Hawkins re­ports that 63% (1,710) were for hos­pi­tals, com­pared with 56% (1,495) the pre­vi­ous year and 11% (285) eight years ago.

Still, of the 23 spe­cial­ties tracked in the 19th an­nual Mod­ern Health­care Physi­cian Com­pen­sa­tion sur­vey, only seven saw av­er­age com­pen­sa­tion in­creases at or above the 3.2% rate of in­fla- tion based on the 2011 Con­sumer Price In­dex. This in­cludes a 10.3% in­crease for in­ten­sivists, who saw their av­er­age pay rise to $327,456 in 2011 from $296,768 in 2010 to fin­ish 13th high­est of the spe­cial­ties in­cluded in the sur­vey.

It was the first dou­ble-digit in­crease seen on the Mod­ern Health­care charts since the 2008 sur­vey, when plas­tic sur­geons reg­is­tered a 10.9% in­crease. The next-high­est in­creases in the cur­rent sur­vey are for non­in­va­sive car­di­ol­o­gists whose com­pen­sa­tion grew 4.1% to an av­er­age of $424,359 in 2011 from $407,694 in 2010; and in­va­sive car­di­ol­o­gists, whose pay rose 3.9% to $479,275 from $461,121.

Ac­cord­ing to the 16 as­so­ci­a­tions, re­cruit­ing firms and staffing com­pa­nies par­tic­i­pat­ing in the cur­rent sur­vey, the spe­cial­ties that had the three high­est av­er­age com­pen­sa­tion in­creases in last year’s sur­vey were among the 10 spe­cial­ties that saw their pay drop in this year’s find­ings.

Ra­di­a­tion on­col­o­gists’ av­er­age com­pen­sa­tion in­creased 6.4% in last year’s sur­vey, but their av­er­age pay fell 0.7% in the cur­rent sur­vey, to $468,786 in 2011 from $471,901 in 2010. Gen­eral sur­geons’ av­er­age com­pen­sa­tion rose 5.9% in last year’s sur­vey, but fell 0.6% this year to $351,318 from $353,460. Mean­while, plas­tic sur­geons’ av­er­age pay in­creased 5.8% last year, but they ap­peared to give it all back this year and then some: They saw the big­gest per­cent­age drop in this year’s sur­vey—6.6%—to $382,016 in 2011 from $408,864 in 2010.

Other spe­cial­ists whose com­pen­sa­tion tracked ahead of the CPI were hospi­tal­ists, 3.8%; and fam­ily physi­cians and pe­di­a­tri­cians, both 3.6%. Gas­troen­terol­o­gists’ pay in­crease equaled the 3.2% in­crease in the CPI.

For the fourth straight year, or­tho­pe­dic sur­geons and in­va­sive car­di­ol­o­gists fin­ished first and sec­ond, re­spec­tively, on the list based on av­er­age com­pen­sa­tion. Orthos topped the charts again de­spite a 0.4% de­crease in av­er­age pay that saw their com­pen­sa­tion fall to $499,533 from $501,298. Of the 14 as­so­ci­a­tions and staffing com­pa­nies track­ing or­tho­pe­dic sur­geons’ pay in the Mod­ern Health­care sur­vey, com­pen­sa­tion ranged be­tween $610,188 and $369,905.

Dr. Richard Mars­den, se­nior ex­ec­u­tive vice pres­i­dent for San­ford Health’s Fargo, N.D., division, says the sur­vey find­ings roughly re­flect what he’s seen in his area. He added, how­ever, that or­tho­pe­dic sur­geons spe­cial­iz­ing in the hand may be out­pac­ing their peers.

“That’s a tough re­cruit right now,” says Mars­den, who is re­spon­si­ble for keep­ing 596 physi­cian staff po­si­tions filled.

He also says that gas­troen­terol­o­gists may be get­ting paid more in his re­gion than the sur­vey in­di­cates, and that the 10.3% in­crease for in­ten­sivists is “a lit­tle out of the norm from our ex­pe­ri­ence.”

While the $298,659 and the $198,892 av­er­age pay in­di­cated in the sur­vey for ob­ste­tri­cian/gyne­col­o­gists and fam­ily physi­cians, re­spec­tively, are com­pa­ra­ble to what Mars­den has been pay­ing, he says higher com-

pen­sa­tion is some­times needed to at­tract these spe­cial­ists to some of the re­mote re­gions in San­ford’s cov­er­age area.

“Get­ting them to come to the warm cli­mate of North Dakota and South Dakota can be a chal­lenge,” Mars­den says.

He adds that neu­rol­o­gists (who, ac­cord­ing to the sur­vey, saw their av­er­age com­pen­sa­tion in­crease 0.9% to $264,842 in 2011 from $262,370 in the pre­vi­ous year) are an­other “tough re­cruit,” while Spahlinger says pe­di­atric neu­ro­sur­geons are hard to re­cruit—and re­tain.

“Our pe­di­atric neu­ro­sur­geons are con­stantly be­ing re­cruited,” he says. So, in or­der to re­tain the ser­vices of in-de­mand spe­cial­ists, Spahlinger says the Univer­sity of Michi­gan of­ten of­fers de­ferred com­pen­sa­tion in re­turn for a com­mit­ment to re­main for a cer­tain num­ber of years.

He notes that ev­ery few years, a dif­fer­ent spe­cialty draws high de­mand—be­tween 2000 and 2005 it was ra­di­ol­o­gists. Ac­cord­ing to this year’s sur­vey, ra­di­ol­o­gists’ com­pen­sa­tion fell 2.8% to an av­er­age of $439,384 in 2011 from $451,976. But Spahlinger re­calls how their pay was ris­ing 10% to 15% an­nu­ally at the be­gin­ning of the past decade and, one year, he says the univer­sity lost 18 ra­di­ol­o­gists.

Mars­den says San­ford of­ten of­fers sign­ing bonuses or med­i­cal school loan-for­give­ness pack­ages as re­cruit­ment en­tice­ments in which a sum of $50,000 usu­ally comes at­tached with a three-year com­mit­ment. A smaller sum usu­ally means two years or fewer, while some­thing higher means four years or more.

“Ob­vi­ously, the more crit­i­cal the spe­cialty you’re try­ing to re­cruit, the higher the dol­lar fig­ure and the more years it’s spread out,” Mars­den says.

Spahlinger says the univer­sity doesn’t use sign­ing bonuses that much, and in­stead it plays up its ben­e­fits pack­age such as full med­i­cal and den­tal in­sur­ance plus a com­mit­ment to dou­ble what in­di­vid­u­als put in their re­tire­ment ac­count. “If you put in $5,000, we put in $10,000,” he says. “That’s a pretty gen­er­ous ben­e­fit.”

Mer­ritt Hawkins re­ports that 80% of its re­cruit­ing as­sign­ments in­cluded sign­ing-bonus of­fers with the av­er­age be­ing about $23,300. Other com­mon in­cen­tives in­clude paid re­lo­ca­tion, paid con­tin­u­ing med­i­cal ed­u­ca­tion, health in­sur­ance and mal­prac­tice in­sur­ance.

The poor econ­omy has hin­dered physi­cian re­lo­ca­tion be­cause of dif­fi­cul­ties in sell­ing homes. Mars­den says San­ford is re­luc­tant to step into these mat­ters. “One thing we try to stay away from is real es­tate,” he says. “We don’t want to own real es­tate, we don’t want to buy out houses from peo­ple, and we don’t want to own their house when they get here.”

Spahlinger says the trend to­ward em­pha­siz­ing flex­i­bil­ity and life­style con­tin­ues. While the univer­sity is re­luc­tant to hop on the pay­ing-for-on­call-ser­vice band­wagon, he says it will ac­com­mo­date doc­tors who want to work less-than-full-time hours—though it can be tough to cre­ate a co­he­sive unit when there is a siz­able con­tin­gent of physi­cians work­ing only be­tween 50% to 80% as many hours as the rest of the staff.

“It’s be­com­ing lo­gis­ti­cally harder be­cause of the vari­abil­ity,” he says. “Now, it’s a cal­cu­lus equa­tion.”

TAKE­AWAY: physi­cians’ While com­pen­sa­tion has in­creased as hos­pi­tals and large med­i­cal groups com­pete for their ser­vices, pay­ers haven’t kept pace with in­creased re­im­burse­ment for those ser­vices.

UNIVER­SITY OF MICHI­GAN HEALTH SYS­TEM

Car­di­ol­o­gists are among the spe­cial­ties that saw their av­er­age com­pen­sa­tion in­crease faster than in­fla­tion in 2011.

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