Physician Compensation, Productivity Grew in 2022 Despite Shortages

Physician compensation increased in 2022 but could not keep up with rising inflation, a report from the Medical Group Management Association (MGMA) revealed.

The report reflects data from nearly 190,000 providers at more than 6,800 organizations and shares how financial challenges and staffing shortages have impacted provider compensation and productivity.

From 2021 to 2022, the growth in median total compensation for primary care physicians increased from 2.13 percent to 4.41 percent. However, inflation rose by 6.5 percent over the same time.

Provider compensation growth varied by specialty, ranging from a 0.13 percent increase for urgent care physicians to a 10.57 percent increase for family medicine physicians. The average change in median total compensation for surgical specialties dropped from 3.89 percent in 2021 to 2.54 percent in 2022. Similarly, compensation growth for non-surgical specialties fell from 3.12 percent to 2.36 percent from  2021 to 2022.

For advanced practice providers (APP), the change in median compensation decreased slightly from 3.98 percent in 2021 to 3.70 percent in 2022.

Competition for physicians and APPs has been strong since the pandemic started, but medical practices have also faced significant financial challenges. Less than 50 percent of newly hired physicians and less than 20 percent of newly hired APPs were offered a signing bonus as part of the contract offer or negotiation. Among providers who were offered a signing bonus and ultimately did not start employment after accepting, one-third were required to pay back the full bonus amount.

Between 2019 and 2022, productivity changes measured by work RVUs (wRVUs) ranged from -3.35 percent for invasive-interventional cardiologists to 17.22 percent for dermatologists.

Surgical specialists saw the highest productivity levels in 2022. Among all specialties, physician-owned practices report higher productivity levels than their hospital-owned counterparts. Between primary care physicians, surgical and non-surgical specialists, and APPs, the difference in total collections ranged from $96,580 to $172,221. The difference in wRVUs ranged from 397 to 1,371.

MGMA data from November 2022 found that 29 percent of medical groups reported exceeding their productivity goals for the year, 36 percent were on target, and 36 percent were below their expected levels.

Practices below their expected goals said that top barriers included a lack of provider availability due to staffing shortages, increased administrative burden from prior authorization requirements, and high levels of patient no-shows, leaving unfilled appointment slots in provider schedules.

Practices on course or ahead of their goals said hiring more providers, making changes to phone systems to improve scheduling, and focusing on culture and incentives to drive productivity helped them in 2022.

As organizations face physician and nurse shortages, leaders may turn toward hiring APPs. Physician assistant jobs are expected to grow by 28 percent through 2031, while nurse anesthetist, nurse midwife, and nurse practitioner jobs are expected to grow by 40 percent.

In the past year, almost half of medical group leaders (47 percent) have added part-time or flexible schedule physician roles to manage staffing shortages. The hiring of locum tenens physicians also boomed in 2022. Over half of medical group leaders (52 percent) said they plan to use the same level of contract and locums work in 2023, while 20 percent expected an increase.