Doctor Pay Eclipses $240,000 As Value-Based Model Boosts Primary Care

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Compensation of primary care physicians continues to outpace that of their specialist counterparts rising nearly 3.6% last year to $241,273, according to the 2015 provider compensation report from the Medical Group Management Association.

Though specialists make much more than their primary counterparts with their total compensation rising to $411,852 in 2014, the rate of increase was only 2.39% from 2013, according to MGMA, the largest organization of doctor practices in the U.S.  And since 2012, pay of primary care doctors, which include family physicians, internists and pediatricians has risen more than 9% while specialist total compensation rose just 3.9%.

The jump in primary care compensation is part of the trend moving reimbursement of doctors and hospitals away from fee-for-service medicine to value-based models based on quality and outcomes. Primary care physicians are also in demand amid a physician shortage with hospitals hiring doctors to capture more outpatient revenue in the value-based care model.

“It’s a buyer’s market,” Dr. Halee Fischer-Wright, a pediatrician and MGMA’s chief executive officer, said in an interview.  “Every system needs primary care physicians as they shift to value based care models.”

Health insurers, employers and government health programs under the Affordable Care Act are emphasizing lower cost outpatient care and therefore tend to dangle more financial carrots before primary care doctors to improve outcomes, increase quality and keep patients away from hospital care and more expensive specialists.

Todd Evenson, MGMA’s chief operating officer, said health insurance companies as well as hospitals that employ doctors are moving to a variety of performance models when it comes to doctor pay.

Value-based care contracting will likely escalate as health insurance companies consolidate. Aetna (AET) last week announced its plan to acquire Humana (HUM) while Anthem (ANTM) is working to convince Cigna (CI) to accept its buyout offer and United Health Group (UNH) isn’t ruling out acquisitions either.

A much larger percentage of doctor compensation is now based on performance and outcomes from more value-based contracts, Fischer-Wright said. Nearly 11% of primary care doctor payments come from value-based contracts compared to just 3% in 2012 and 6.7% in 2013, MGMA figures show.

“In two to three years I think this will grow to the 25% to 33% range,” Fischer-Wright said.

Source: Forbes