The Medical Group Management Association (MGMA) "Physician Compensation and Production Survey: 2003 Report Based on 2002 Data" indicates that primary care physicians' median incomes rose by less than 3 percent between 2001 and 2002. Some specialists saw increases that averaged 4.3 percent over that period, while others had their salaries decline. At the same time, many groups reported larger rises in their medical production and charges.

The specialties taking the biggest hits in compensation were:

• Invasive cardiology, down 6.17 percent between 2001 and 2002;
• Noninvasive cardiology, down 3.9 percent;
• Urology, down 3 percent; and
• Pulmonary medicine, down 2.64 percent.

The specialties reporting higher productivity but static or declining compensation included urology, which showed a 6.29 percent increase in production of work relative value units (RVUs). Gastroenterologists reported an 11.7 percent increase in work RVUs but only a 2.87 percent increase in income.

Higher costs for labor, supplies and professional liability insurance, combined with cuts in commercial and government reimbursement, made it difficult for many physicians to maintain net income, says Michael Nochomovitz, MD, MGMA member and president and chief medical officer, University Primary and Specialty Care Practices, University Hospitals Health System, Cleveland. Nochomovitz is president-elect of the Physicians in MGMA assembly.

Other factors affecting physician compensation last year included higher employee health insurance costs and pension contribution costs to ensure that physician and staff retirement plans were adequately funded. "The cost of employee health insurance has skyrocketed over the past few years," Nochomovitz says. "But doctors feel that health insurance for employees and their families is an important part of the benefit structure in the health care environment."

Specialists who generated revenue from ancillary services, attracted more self-paying patients or performed costly procedures for which demand was high were more likely to see higher incomes, says Daniel P. Stech, MBA, MGMA Survey Operations director.

"Dermatologists' compensation increased a median 25 percent and their gross charges climbed by 40 percent last year. This was possibly due in part to greater demand for their services (including high-cost procedures such as botox injections), improved marketing results and expansion into new areas," Stech says.

Specialists in diagnostic radiology and anesthesiology also saw income increases – 12.95 percent and 8.22 percent, respectively – due in part to increased patient demand and a shortage of specialists, Stech says.

Physicians try to combat stagnant reimbursement and higher costs by boosting volume, but further gains will be harder to achieve, Nochomovitz says.

"Even if there is a shortage of specialists and more demand for your physicians' services, there is a finite number of patients that high-quality physicians are willing or able to see," Nochomovitz says.

For more information, go to www.mgma.com.