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Physician Salaries Declined over Last Decade

doi: 10.1097/01.COT.0000293390.79865.16
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The average physician net income declined by about 7%, in inflation-adjusted terms, between 1995 and 2003, while other professionals saw about a 7% increase during this period, according to a national study from the Center for Studying Health System Change.

Primary care physicians experienced a 10.2% decline in real income. Surgeons experienced an 8.2% decline, while income levels for medical specialists remained unchanged.

The average number of hours worked by physicians for all medically related activities also fell slightly between 1995 and 2003. Medically related activities include time spent on administrative tasks, professional activities, and direct patient care. However, time spent on call when not treating patients was not included.

While physicians' overall work hours have decreased, time spent by physicians in direct patient care has increased, the study showed. Patient care activities include face-to-face contact with patients, patient record-keeping and office work, travel time connected with seeing patients, and communication with other physicians, hospitals, pharmacies, and others on a patient's behalf.

Surgical specialists' average patient care hours increased from about 47 hours a week in 1995 to 50 hours a week in 2003. Physicians are now spending a significantly larger proportion of their work time caring for patients than they did in the mid-1990s (86% vs. 81%).

The decline in work hours reflect changes in physician practice settings, the research showed. Physicians have been moving from solo or small group practices into large group practices and institutional settings. In large group practices, the practice can invest in more administrative staff and information technology to deal with billing and other administrative tasks; less physician time is required for these tasks.

According to the study, flat or declining fees from public and private payers appear to be a major factor in the decreased incomes for physicians. Medicare payment rate increases for physician services amounted to 13% from 1995 to 2003; inflation totaled 21% during this eight-year period. In 1995, commercial fees were 1.43 times Medicare fees, and by 2003 the commercial fee ratio was 1.23.

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 approximately $203,000. Although surgical specialists have lost ground to inflation since the mid-1990s, they remain the highest-earning physicians, with an average income of $272,000 in 2003—29% higher than medical specialists and 86% higher than primary care physicians.

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