Physician Compensation Plateaus Despite Pandemic Losses


Despite a fiscally challenging year for the healthcare industry, physician compensation for most specialties has remained the same or has slightly increased, a new report from the Medical Group Management Association (MGMA) reveals. However, most specialties showed an overall decrease in productivity in 2020.

The report utilized data from 185,000 providers spanning over 6,700 organizations, both physician-owned and hospital-owned. Compared to 2019, primary care physician compensation increased by 2.6 percent. Primary care physician compensation has had a cumulative increase of 5.27 percent over the past three years, and 10.15 percent over the past five years. Meanwhile, advanced practice provider (APP) compensation increased by 1.25 percent from 2019 to 2020.

While primary care physician compensation increased, most specialty physicians saw their compensation stay the same or slightly decrease. This is likely due to patient volumes going down in 2020 in the case of specialty physicians, the report explains. The median total compensation for specialist physicians experienced a decrease of 1.91 percent from 2019 to 2020. Surgical specialists experienced a 0.89 percent decrease in median total compensation and a 4.81 percent total decrease from 2018 to 2020.

“MGMA’s modest compensation findings belie the turmoil of 2020. Our numbers tell a story of a year of unprecedented challenges that could have potentially led to a serious decline in compensation across every category we track,” explained Dr. Halee Fischer-Wright, president and CEO of MGMA, in a press release.

Researchers measured physician productivity by tracking “total encounters,” or “the number of provider-to-patient interactions regardless of setting, including televisits and e-visits,” the report stated. Work relative value units (wRVUs) were also factored into physician productivity, as these calculations “quantify productivity and take into account the complexity of the visits.”

Productivity decreased in most specialties in 2020, again likely due to the lower volume of patients at the onset of COVID-19 and the lack of elective procedures. Physician-owned practices typically reported higher productivity levels in terms of total encounters and wRVUs, the report found. MGMA also reiterated that wRVUs increased significantly for all provider types after reaching record lows in April 2020, as reported in its 2020 Monthly Survey.

“Practices acted quickly to leverage government programs to cover staff costs and expenses during the early part of 2020,” continued Fischer-Wright in the press release.

“They adapted to new delivery models such as telemedicine and were able to quickly ramp up when patient volumes returned later in the year. It is a testament to the resiliency of physician groups that weathering the challenges of a year that tested us all in so many ways.”

Government aid from the Provider Relief Fund along with initiatives like the HRSA COVID-19 Uninsured Program and the Paycheck Protection Program allowed physicians to stay afloat. Increased patient volumes in the second half of 2020 likely helped, the report suggests. Lawmakers recently called for an extension of Provider Relief Fund benefits. Meanwhile, hospital revenue, volumes, and margins increased in April 2021, according to a recent report from Kaufman Hall. Even so, hospitals and physicians are still in the process of recovering from the financial impact of COVID-19, and may have a long way to go.

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