Increasing demand for patient care expected to bump up primary care salaries

Calendar year 2013 will bring modest pay increases for physicians in all care settings, with group-practice doctors slightly outpacing their hospital-based counterparts, according to consulting firm Hay Group. Overall, physician salaries are expected to rise by 2.6 percent in the coming year.

Results from Hay Group’s newly released 2012 Physician Compensation Survey show that primary care physicians working in group-based practices can expect to see the largest pay increases of 3.0 percent in 2013, while those working in hospital-based settings can expect the smallest pay increases of 2.0 percent.

The survey report noted that primary care physicians are well positioned for bigger salary increases in the coming years thanks to the Affordable Care Act, which is expected to increase demand for primary care services when it is fully implemented in 2014.

“Given the growing shortage of primary care physicians and the expected increase in demand from patients seeking care, we expect to see salary increases for primary care physicians trend upward over the coming years as employers vie for the best talent,” said Jim Otto, senior principal in Hay Group’s Healthcare Practice.

Other key study findings:

  • The use of employment contracts continued to increase in 2012. In hospitals, 70 percent of physicians had employment contracts, compared to 64 percent in 2011. For physicians working in group-based practices, 67 percent had employment contracts in 2012, while only 56 percent had contracts in 2011.
  • Measures for determining incentive payouts continue to be dominated by quality and patient satisfaction. For individual performance metrics, 77 percent of organizations reported that they used “quality” and 66 percent relied on “patient satisfaction” to measure physician performance. Conversely, only 39 percent reported “outcomes” as a performance metric for physicians. For group performance measurement, 56 percent reported “quality” as a metric, while 50 percent reported “patient satisfaction” as a measurement used to determine incentive payouts.
  • Most organizations (88 percent) provided some form of malpractice insurance to their physicians. Of those organizations, 97 percent provided the insurance at no cost to the physician.

A few factors that could slow the rate of salary increases for physicians in the near term, cautioned Otto, including the competing demands for revenue spending and the use of mid-level practitioners – such as nurse practitioners and physician assistants – for primary care services.

“These factors are likely to influence the actual amount of pay increases, but I would not expect that in and of themselves they result in decisions not to increase pay,” added Otto.