Provider compensation rises again as groups push productivity

Provider compensation is still on the rise after the COVID-19 pandemic, according to the latest data from the Medical Group Management Association (MGMA).

For the fourth consecutive year, MGMA recorded increases in provider compensation among primary care and nonsurgical specialty physicians in 2023. Primary care physicians saw the largest median compensation gains at 4.44% versus 1.81% for nonsurgical specialist physicians. In 2022, nonsurgical specialist physicians reported a 2.36% growth in median compensation.

Surgical specialists also experienced a significant increase last year with a 4.42% bump.

Specialties with the largest gains in 2023 included dermatology (10.18%), neurological surgery (10.05%), general orthopedic surgery (8.77%),  gastroenterology (8.06%), and hematology/oncology (7.79%). Family medicine, however, has seen the largest five-year change with a 16.92% increase in median compensation.

Additionally, total median compensation for advanced practice providers (APPs) exceeded the gains seen for physicians, MGMA reported. The data showed a 6.47% increase in 2023, adding to a 16.23% gain since before the COVID-19 pandemic in 2019.

Compensation gains ran against a 3.4% increase in the Consumer Price Index in 2023. Most providers managed to keep up with the inflation last year. However, MGMA found that changes in provider compensation across all specialty types over the last five years still lagged a nearly 21% surge in the Consumer Price Index during that same period.

As compensation grew, so did provider productivity in 2023. MGMA found that median work relative value units (wRVUs) were up across nearly all specialties and work settings last year. For example, primary care, surgical specialties and nonsurgical specialties in independent practices saw higher median wRVUs in 2023 versus 2022, while APP wRVU levels in these practices were largely unchanged from the previous year.

In hospital-owned practices, median wRVUs increased for APPs, primary care and surgical specialty physicians, with nonsurgical specialist productivity only slightly below 2022 levels.

MGMA reported that independent practices experienced higher levels of productivity in collections,  total encounters and wRVUs for most specialties versus hospital-owned counterparts.

"Despite being faced with escalating overhead, declining physician reimbursement, and a challenging labor market, medical groups pushed themselves to elevated levels of productivity in 2023, ensuring they could meet the increased demand for care in their communities," Halee Fischer-Wright, MD, MMM, FAAP, FACMPE, president and chief executive officer at MGMA, said in a statement.

Fischer-Wright advised medical groups leaders to “embrace the latest digital technologies to assist in optimizing operations, maintaining access to care and recognizing meaningful cost savings” as staffing shortages persist.

Technologies that streamline administrative processes like appointment scheduling and registration can increase efficiency across the business while making workflows easier for staff. Automating steps for providers and other staff can also reduce the risk of burnout as medical groups manage to do more with fewer people.