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Physicians Lose Ground in Real Income Between 1995 and 2003
Primary Care Physicians Fare the Worst, Seeing Real Income Decline by 10.2 Percent
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"The downward trend in real incomes since the mid-1990s likely is an important driver of growing physician unwillingness to provide such pro bono work as charity care and serving on hospital committees," said Paul B. Ginsburg, Ph.D., coauthor of the study and president of HSC, a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.
The decline in physicians real income stands in sharp contrast to the wage trends for other professionals who saw about a 7 percent increase between 1995 and 2003 after adjusting for inflation, the study found.
Among different types of physicians, primary care physicians fared the worst with a 10.2 percent decline in real income between 1995 and 2003, while surgeons real income declined by 8.2 percent. But medical specialists real income essentially remained unchanged.
"Flat or declining fees from both public and private payers appear to be a major factor underlying declining real incomes for physicians," said HSC Researcher Ha T. Tu, M.P.A, a study coauthor.
Despite the downward trend in real incomes, medicine overall remains one of the most well-paid professions in the United States: At least half of all patient care physicians earned more than $170,000 in 2003, and physician average net income was about $203,000, the study found. Although surgical specialists have lost ground to inflation since the mid-1990s, they remain the highest earning of all physicians, with average incomes of $272,000 in 200329 percent higher than medical specialists and 86 percent higher than primary care physicians.
Based on HSCs nationally representative Community Tracking Study Physician Survey, the studys findings are detailed in a new HSC Tracking ReportLosing Ground: Physician Income, 1995-2003available here. The 1996-97 and 2000-01 surveys contain information on about 12,000 physicians, and the 2004-05 survey includes responses from more than 6,600 physicians. Response rates for the surveys range from 52 percent to 65 percent.
Other key study findings include:
According to the study, the strong growth in tests and procedures helps to
explain in part why medical specialists have seen their incomes growing at a
faster pace than primary care physicians, who rely more on cognitive services,
such as evaluation and management of patients, to generate revenue
Downward pressure on incomes is likely linked to the movement of physicians away from primary care into certain medical specialties that offer higher compensation and have kept better pace with inflation. The composition of the physician population changed between 1995 and 2003, with the proportion of medical specialists steadily increasing from 32 percent to 38 percent, while the proportion of primary care physicians and surgical specialists each declined by about 3 percentage points.
"In choosing which area of medicine to specialize in, many physicians today already show preferences for medical specialties that offer more control over work hours," Ginsburg said. "Reinforced by diverging income trends between these specialties and primary care, the result is likely to be an imbalance in the physician workforce and perhaps a coming shortage of primary care physicians and other specialties that provide primarily cognitive services."
The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nations changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.