Physician compensation remained modest but steady throughout the pandemic, new MGMA report finds

Photo: Morsa Images/Getty Images

Despite the pandemic's impact on patient volume, elective procedure caps and practice closures, compensation for physicians has largely remained steady, according to a new report from the Medical Group Management Association.

In 2020, compensation for primary care physicians saw modest growth. Many physicians either saw slight increases in compensation or met the previous year's compensation, according to the report released in May. 

The findings go against all reports of lost income and revenue during the pandemic due to patients delaying care.

Even the MGMA was reporting that by July 2020, physician-practice revenue had declined by 55% because patients were either unable or unwilling to seek medical treatment. 

"MGMA's modest compensation findings belie the turmoil of 2020," said MGMA CEO and president Dr. Halee Fischer-Wright.

The new report, MGMA DataDive Provider Compensation: Provider Pay and the Pandemic, finds that federal assistance such as the Paycheck Protection Program and the Provider Relief Fund helped to stabilize physician compensation. 

But salary gains have been modest.

Between 2019 and 2020 total compensation for primary care physicians increased by 2.6% compared to the three and five-year cumulative increases of 5.27% and 10.15%, respectively.

Countering expectations, most specialties had minimal changes in compensation. Despite limited patient volumes due to regional lockdowns and overwhelmed hospitals, surgical physicians saw a compensation decrease of 0.89% in 2020. Nonsurgical specialists reported a decrease of 1.29%.

The report was based on data collected from over 185,000 providers across more than 6,700 physician-owned and hospital-owned organizations.

WHY THIS MATTERS

When the pandemic took hold in March of 2020, it marked the start of a decline in job options for physicians and sparked concerns that physician compensation would take a similar decline. 

In July 2020, a Merritt Hawkins 2020 Review of Physician and Advanced Practitioner Recruiting Incentives found that the pandemic had significantly altered the job market for physicians, leading to the temporary reduction of both starting salaries and practice options for doctors.

The report said the number of search engagements for physicians declined over 30%, starting in March of 2020, while the number of physicians inquiring about job opportunities increased. 

Hospitals and health systems lost $200 billion in the first quarter of 2020, according to a report released at that time by the American Hospital Association. 

THE LARGER TREND

Though physician searches were down in 2020, the healthcare industry still faces the looming challenge of a physician shortage. In 2020 the Association of American Medical Colleges projected a shortage of up to 139,000 physicians by 2033.

According to MGMA, more than 70% of practice leaders plan to hire a new physician position in 2021. Per MGMA's stat poll taken in November last year, over half of practice leaders expect to add new advanced practice providers to help fill gaps. 

Hiring APPs is just one of the hiring trends MGMA predicts. The association also sees employers potentially needing to hire recently retired physicians on a part-time basis.

ON THE RECORD

"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," said Dr. Halee Fischer-Wright, president and CEO of MGMA.

"Practices acted quickly to leverage government programs to cover staff costs and expenses during the early part of the 2020. 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 (weathered) the challenges of a year that tested us all in so many ways." 

bymurphreports@gmail.com
@MurphReports