Physician Business Ideas: Physicians - Supply, Demand, Salaries, and Benefits

In yesterday’s blog, “Doctor Tail Wags Health Reform,” I said the laws of supply-and-demand for physician services puts doctors in good negotiating position.

Several physicians have asked for details.

Here are some bare facts gathered from two books.

Book One, In Their Own Words, 12,000 Physicians Reveal Their Thoughts on Medical Practice in America, Morgan James publishing, 2010, by Philip Miller of Merritt Hawkins and Associates, and Lou Goodman and Tim Norbeck of the Physicians Foundation

Book Two, Guide to Physician Recruiting, Practice Support Resource, Inc, 2007, by James Merritt, Joseph Hawkins, and Phillip Miller, Merritt Hawkins and Associates.

Demand

Projected Shortage of Physicians in 2025 by Specialty Group

Primary care 46,000 (37% deficit)
Surgery 41,000 (33% deficit)
Other patient care 29,000 (23% deficit)
Medical specialties 8,000 (7% deficit)

Supply Benefits

Starting incomes, high, for recruited specialties

2002 2006 % change

Internal medicine $200,000 $250,000 +25%
Family practice $190,000 $220,000 +16%
Hospitalist $180,000 $190,000 + 4%
General Surgery $275,000 $350,000 +27%
Ob/Gyn $325,000 $450,000 +38%
Emergency Medicine $255,000 $270,000 + 6%

Source: Guide to Physician Recruiting, 2007, Figures are for high offers. Average offers for 2006 were Internal Medicine, $162.000, Family Practice, $146,000, Hospitalist $155,000, General Surgery $272,000, Ob-Gyn $237,000, and Emergency Medicine $230,000.

A number of physician income compensation surveys – MGMA, AMGA, Merritt Hawkins and Associate, Sullivan, Cotter & Associates, Hospitals & Healthcare Compensation Services (HHCS), Warren Surveys, and Hay Group- are available for tracking incomes by specialties. Here are the averages from these seven surveys for 2006.

Internal Medicine $158,000
Family Practice $154,000
General Surgery $255,000
Emergency Medicine $203,000
Ob-Gyn $238,000

Benefits: salary 15%, salary with bonus 53%, income guarantee 32%, paying for relocation 99%, signing bonus 58%. Average amount of bonuses $20,480. Payment for CME 90%, average amount of CME payment $3830. Additional benefits - health insurance 81%, malpractice 92%, retirement 70%, and disability 70%, educational loan forgiveness 34%.

As the physician shortage grows, increased demand for their services will place physicians in a better position to negotiate.