Physicians' cash compensation was up in 2023 for medical and surgical specialists, and will soar even higher over the next five years, according to SullivanCotter's "2023 Physician Compensation Insights" report.
Primary care physicians received the biggest total cash compensation boost in the last year, and the anticipated shortages in the field will push compensation even higher. Primary care physicians also had the highest turnover rate of any category in the report, at 8.4%.
"With the anticipated shortage of primary care physicians projected to increase, healthcare organization leaders will confront sustained upward pressure on compensation for those roles moving forward," the SullivanCotter press release noted.
The consulting firm surveyed more than 306,765 physicians, advanced practice providers and PhDs. The other factors boosting physician cash compensation include:
1. Demand continues to outpace supply.
2. Regulatory changes, including Medicare's proposed conversion factor reduction in 2024 and changes to split and shared billing for 2025, are affecting productivity and cash compensation. Median work relative value units have shifted because of Physician Fee Schedule updates, and coupled with primary care volume increases post-pandemic, total cash compensation is spiking.
3. Aligned physician and APP care delivery models aim to promote compensation for team-based care. Around 23% of organizations surveyed used team-based incentives in compensation plans, which accounted for 11% of physician total cash compensation, up from 8% in 2020.
4. Fee-for-service changes and the shift to value-based care are also leading to higher cash compensation. Around 50 percent of organizations are using value-based or quality incentives with payments ranging from 6% to 8% of total cash compensation for specialists and 8% to 9% for primary care physicians.
"Increased use of team-based incentive compensation correlates with the growing focus our clients have on population health, care coordination, and positioning APPs to practice at the top of license," said Mark Ryberg, managing director and physician workforce practice leader at SullivanCotter, in a press release. "Now, more than ever, we see organizations evaluating how APPs can most effectively partner with physicians and care teams to deliver high-quality patient care."
From 2022 to 2023, total cash compensation increases were:
Pediatric surgical: 3.8%
Adult surgical: 7%
Hospital-based: 8.7%
Adult medical: 4%
Primary care: 9.5%
Pediatric medical: 5%
Over the next five years, projected increases in total cash compensation are:
Pediatric surgical: 5.7%
Adult surgical: 11.1%
Hospital-based: 11.9%
Adult medical: 10.3%
Primary care: 18.3%
Pediatric medical: 11.4%