94th ANNUAL PHYSICIAN REPORT FROM MEDICAL ECONOMICS

Every year, Medical Economics magazine publishes their annual survey on physician activities. It includes information on physician income, practice satisfaction, and attitude toward the state of today’s medicine. It’s always an informative and thought-provoking article and serves as a forum for airing one’s grievances. 

The purpose of this blog is to report only on subjects that interest the general public and not physician-oriented questions. The private practice of medicine is a business so it’s no surprise that questions on the financial state of your practice are asked first.

Is the financial state of your practice….Better than a year ago

                                                                   About the same

                                                                   Worse than a year ago

                                                                    No Answer

Fully one-third of physicians answered WORSE THAN A YEAR AGO while only 19% were better. 48% were about the same.

Things were WORSE because of high overhead, low reimbursement, too much time spent of uncompensated tasks, and high technology costs.

Things were BETTER because the doctor saw more patients, changed to a concierge model practice, renegotiated payer contracts, or received pay-for-performance incentives. 

Do you have an ownership interest in your practice?….NO 53%…YES 47%.

In increasing numbers, Doctors are seeking guaranteed income by becoming employees of a group or hospital and no longer owning their practice.

Physician Income has improved since 2017…Family Medicine up $40,000

                                                                             Internal Medicine up $44,000

                                                                             Pediatrics up $11,000

                                                                             OB-GYN up $14,000

Male doctors earn $85,000 more the female doctors

Urban physicians are paid more than suburban or rural doctors

Concierge Model practices make $30,000 to $80,000 more than private practice or employed physicians.

The average hours worked per week was less than any time previously….FP—43 hours

                                                                                                                              INT—42 hours

(At my peak, I worked a minimum of 58 hours a week. That does not included emergency trips to the hospital or office, obstetric deliveries, nursing home rounds, and time spent on call)

Malpractice premiums….Increased—39%

                                           Stayed the same—44%

                                           Decreased—3% (decrease? you can’t be serious)

                                           Don’t Know—14%

Overhead expenses NEVER go down.

Ancillary Services to supplement practice income….percentage who use.

     Lab services—42%

     EKG—38%

     Weight loss/nutrition counseling—22%

     X-ray services—21%

     Spirometry—17%

     Pharmacy services—11%

Medical Economics has never clarified if the income figures reported are total, before-tax practice revenues or if they are the net income to the physician before taxes. It makes a huge difference. If it is the latter, the average family physician makes more than I ever dreamed of making. If the figure is actual practice revenue, it makes more sense, because with overhead being at least 50%, half of $245K (or $122.5K) is a more realistic average “take home” pay. I should contact ME to find out. 

One very important item that significantly impacts the success and sustainability of a private practice is patient care reimbursement. The amount of money a physician receives from Medicare and insurers makes, or breaks, a practice. For over 40 years, the net amount paid by Medicare has decreased every year. While overhead expenses go up, payment for services goes down. Over those 40 years, the net effect is that it has become increasingly more difficult for physicians to pay themselves a salary after overhead expenses. The amount Medicare pays is inadequate to maintain a business without working longer hours and increasing the volume of patients seen every day. 

None of this is ever mentioned in this survey nor are there questions specifically addressing this issue. There never will be because everyone knows doctors are greedy and make too much money. If that’s true, why are so many doctors leaving private practice and becoming employees or adopting the concierge practice model. It’s purely for economic reasons. Nothing will ever change. 

If this survey represents “the state of the union” for the medical profession, the state of the medical profession is far from being good!

Reference: 94th Annual Physician Report. Medical Economics 2023 August:11-19.