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Physician Income Up, Fiscal Cliff Poses Worrying Signs

Physician income increased modestly in 2012, with slightly higher percentages of doctors reporting incomes in the highest brackets, according to Physicians Practice's 2012 Physician Compensation Survey. Yet doctors also report higher practice overhead; consequently, physicians are more likely to say that their personal income is down this year compared with last year.

One thousand three hundred eleven doctors and staff were asked about personal income, practice overhead, practice outlook, and other financial issues. Although compensation seems to have grown slightly, the survey also found that:

  • fewer physicians than ever (43.8%) report being owners or partners of their own practices, as hospitals and health systems continue to seek market share through direct employment and practice ownership and smaller group practices consolidate;
  • almost 44% report that their practices are owned by a hospital or health system;
  • most respondents said some part of physician income is dependent on factors such as productivity; three out of 10 said that at least 20% of their income is not guaranteed;
  • most respondents described net income from their practices as "disappointing";
  • 29% of physicians say the viability of their business is "shaky," a scary prospect just as more patients are getting access to care; and
  • 19% of physicians reported that their income was down by more than 10% in 2012 compared with 2011.

Almost 40% of primary care physicians (and a majority of pediatricians) make less than $150,000 a year.  But only 29% of OBGYNs and 10% of radiologists fall below that threshold.

Worrying signs are on the horizon for physician income. Congress and President Obama continue to negotiate over the so-called "fiscal cliff," which, if unresolved would include a 27% cut in Medicare payments to physicians on January. 1. For now, only 15% of practices reported that they are no longer accepting new Medicare patients, but that might change if cuts go through.

Meanwhile, reductions in Medicare spending contained in the Patient Protection and Affordable Care Act (ACA) may erode physician compensation, especially for practices that struggle to reap increases in outcome-based payments.

Source: UBM Medica US