PHYSICIAN INCOME: Employed Doctors See Biggest 1996 Gain
"Physician income continued to climb in 1996 with employed doctors seeing a significant gain," according to recent figures released by the American Medical Association. Employed physicians' median incomes increased 4.4% in 1996, following a 4.6% increase in 1995. Self-employed physicians' income, however, "dipped slightly after a large 13% hike in 1995." According to Modern Healthcare, the "gains for employed physicians are significant because while they earn less, their numbers are growing." The AMA noted that the proportion of employed physicians in the U.S. rose from 38.1% in 1996 to 38.8% in 1997. Meanwhile, the number of self-employed physicians during that period dropped from 57.7% to 56.6%. "More of an opportunity (in medical groups) and frustration with running practices have doctors seeking the employment," said Dr. Ted Lewers, the AMA's secretary/treasurer. According to the AMA, "[g]roup practices employed the most physicians -- 11.1% -- followed by state and local governments with 9.6%, private hospitals with 7.3% and academic institutions with 7%." The group noted that only 2.7% of the nation's physicians worked for HMOs in 1996.
A Pretty Good Deal
Modern Healthcare reports that the growing "demand for employed doctors" can be explained, in part, by "[p]hysician frustration with operating practices, including higher overhead, as well as the drive by physician practice management companies and hospitals to create large, market-dominating medical groups." Meanwhile, employed physicians "work an average of five hours less per week than self-employed doctors," and "[m]ost receive non-cash benefits that are not reported in net income."
Operating At A Loss?
For all physicians, the median net income rose 3.8% to $166,000. According to the AMA, "physician incomes failed to keep pace with inflation" between 1993 and 1996. The group reported that median net income for doctors grew by an average of 2.1% during the period, "compared with an average 2.8% increase in the Consumer Price Index." The AMA also noted that other health care spending grew at a faster rate than spending on physician services. In 1996, spending on physician services grew 2.9%, compared to a 3.4% increase in spending for hospital care, 6.2% for home health, 4.3% for nursing homes, 6.4% for dental services and 9.2% for prescription drugs. The AMA findings were based on a "telephone survey of about 3,000 non-federal physicians" (Jaklevic, 3/30 issue).