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Vital Stats

Pay is Up; Profit Still Elusive

Physician compensation continues to rise, yet many medical groups are operating at a loss, according to an AMGA survey.

Unique Opportunities The Physician’s Resource Nov/Dec 2007

Compensation for physicians was up yet again in 2006, according to the American Medical Group Association's 2007 Medical Group Compensation and Financial Survey. The overall average increase was about 4.8 percent.

Productivity was up as well. Eighty-five percent of the specialties surveyed by the AMGA reported an increase in gross charges, but the average increase was approximately 7 percent from 2005 to 2006—a smaller increase than had been reported for prior years.

In spite of those increases, the survey shows that many physician groups, particularly those in the South, are operating at a financial loss. On average, only organizations in the Western region were operating at a profit ($17,317 per physician). Organizations in the Southern region had the highest average loss (-$6,049 per physician).

Donald W. Fisher, PhD, the president and chief executive officer of the AMGA, attributes this loss to several factors, including capital expenditures on information technology and patient education, as well as the payer system. "One of the components contributing significantly to the trends in financial performance of medical groups is the current payment model, and groups will face an additional burden with changes in work RVU values," he says.

The AMGA received responses from 222 of the 2700 groups to whom it mailed the survey. Headquartered in Alexandria, Virginia, the AMGA advocates for multispecialty medical groups and other organized systems of care and for the patients served by these systems by continuously striving to improve patient care through innovation, information sharing, benchmarking, the creation of sound public policy, and leadership development.

To purchase the survey, go to www.amga.org or contact Stefan Rozga at 703-838-0033, ext. 326 or srozga@amga.org.