Physician compensation is rising with increased productivity
Medical group executives point to finance and revenue cycle improvements as their key focus in 2024, says MGMA report.
Photo: Thomas Barwick/Getty Images
Compensation climbed for physicians year-over-year, due to increases in productivity and the use of AI, according to a new MGMA report.
Physicians are being pushed toward higher productivity than during the COVID-19 pandemic rebound years of 2021 and 2022, as providers continue to recover from economic and staffing challenges, the report said.
Primary care, surgical specialty and nonsurgical specialty physicians in independent practices all reported higher median work relative value units (work RVUs) in 2023 versus 2022.
In hospital-owned practices, median work RVUs were up in 2023 for primary care and surgical specialty physicians and for advanced practice providers.
Provider compensation increased for the fourth consecutive year among primary care and nonsurgical specialty physicians.
The largest gains in total median compensation were for primary care physicians (4.44%) and surgical specialists (4.42%), with nonsurgical specialist physicians seeing a 1.81% bump in 2023.
The primary care and specialist gains managed to keep up with the 3.4% rise in the Consumer Price Index for last year, though five-year changes in physician compensation across all specialty types -- dating back to pre-pandemic benchmarks in 2019 -- lag the nearly 21% CPI surge in that same period, the report said.
For advanced practice providers, total median compensation outpaced the gains seen for physicians, with a 6.47% increase in 2023, contributing to a 16.23% gain since pre-pandemic 2019 levels.
WHY THIS MATTERS
Practices have limited ability to increase payment. The American Medical Association has called physician pay rates set by the government "unsustainable."
An MGMA Data Mine report from March suggests physicians can increase productivity through hiring additional staff, but that also increases overhead costs.
Productivity, as shown in the report released on May 28, is increasing despite staffing levels remaining essentially constant. This is during a time when physicians are also experiencing a rising patient demand for services.
"It appears that practices are finding other ways to defy gravity and improve overall financial performance," the report said.
An increasing share of medical group executives point to finance and revenue cycle improvements as their key focus in 2024. Faced with years of hiring difficulties in a tight labor market, MGMA members largely report that they see use of new technologies, including artificial intelligence, as essential.
Technological innovations are slowly being implemented across the healthcare industry to shift administrative burdens off clinicians.
THE LARGER TREND
The 2024 MGMA DataDive Provider Compensation survey report reflects 2023 data from more than 211,000 physicians and advanced practice providers.
ON THE RECORD
"Despite being faced with escalating overhead, declining physician reimbursement, and a challenging labor market, medical groups pushed themselves to elevated levels of productivity in 2023, ensuring they could meet the increased demand for care in their communities," said Dr. Halee Fischer-Wright, president and CEO at MGMA. "As physician and other staffing shortages persist, medical group leaders should embrace the latest digital technologies to assist in optimizing operations, maintaining access to care and recognizing meaningful cost savings."
Email the writer: SMorse@himss.org
