Blog, Reimbursement, The Hospital Finance Podcast®

Physician compensation during the pandemic [PODCAST]

besler insights blog corner graphic

The Hospital Finance Podcast

In this episode, we are joined by Andrew Swanson, Vice President of Industry Insights at MGMA, to discuss a survey with healthcare providers to better understand how their compensation was affected during the pandemic.

Learn how to listen to The Hospital Finance Podcast® on your mobile device.

Highlights of this episode include:

  • How data was gathered and what was it looking at
  • How physician compensation was affected overall
  • Hospital-owned practices vs. Independent practices
  • Other variables that contributed to compensation change
  • Compensation trends going forward

Mike Passanante: Hi, this is Mike Passanante and welcome back to the award-winning Hospital Finance Podcast. During the height of the pandemic, many people deferred medical care. This, of course, led to lower patient volumes at hospitals and physician practices. Recently, MGMA surveyed healthcare providers to better understand how their compensation was affected during that tumultuous period. Today, I’m joined by Andrew Swanson, Vice President of Industry Insights at MGMA, to discuss the results of that survey. Andrew, welcome to the show.

Andrew Swanson: Thanks for having me, Mike.

Mike: So, Andrew, could you start out by telling us a bit about how you gathered the data for this report and what you were looking at?

Andrew: Sure. Every year, even in non-pandemic years, MGMA collects information from our members and the entire industry. Once we reached out to folks, there was overwhelming response about wanting to understand the data that was being proffered around the country about things like RVU reduction and its reliance or reluctance on pay. So that’s where we started the conversation in our data collection efforts. We actually collected two sets of survey information. Our typical annual survey, where somebody would submit, either online or via Excel, a typical set of questions tied to provider compensation. And we also did a more month to month survey cycle beginning in June of last year to get a real kind of point in time sense, with a much smaller sample, of course, of what practices were experiencing as we were coming out of the first or second wave of the pandemic. This year, our annual aggregates survey had over 185,000 providers represented across more than 6,700 medical practice organizations. So it’s quite a robust data set and one that is, obviously, nationally known and one that’s nationally relied on to do benchmarking and fair market value, etc. on physician compensation.

Mike: Excellent. So, Andrew, the top storyline, how was physician compensation affected overall by the pandemic?

Andrew: Yeah. I mean, this was the, quote-unquote, “million dollar question.” And surprisingly, at least surprisingly to me and a lot of folks at MGMA, was not very much is the headline. Primary care experienced a slight growth on the physician comp side, about 2.5% between 2019 and 2020. While down significantly from when you look at 3 and 5 year trends of over 5.5 to 10, 10 percent of growth in compensation, but still a little bit of an uptick in comp. Surgical and nonsurgical physician compensation was flat or slightly down by about a percent or two, between 2019 and 2020. So overall, relatively flat. And then the next logical question is, why is that? When volumes plummeted March, April, and May, you can’t catch up three months of volume in a consecutive seven month period, June through December. And so what we looked at was first, how much of that pent up demand was able to be seen by providers over the course of June through December. And the short answer was some, but not all. And so, yes, compensation follows. Right? So as volumes pick up and even as untreated care becomes treated and maybe people are operating schedules at 102, 105, 110 percent capacity from an access perspective, compensation certainly picked up a little bit. But really what we saw was that the loans from the government and other kind of stabilizing factors really were taken advantage of by and large by organizations to kind of float that compensation and keep comp on par so that they could continue to provide the community services that were needed and so PPP and provider relief and other sorts of stimulus efforts were widely used to keep compensation flat. And I think that’s the difference or the delta between some of the decreased volumes that we all experienced and relatively flat compensation in the year.

Mike: Were there differences in compensation changes between hospital-owned practices and independent practices?

Andrew: Yeah, slightly. Again, looking at kind of primary care versus surgical and nonsurgical, primary care tended to go up a little bit more on the physician-owned practice side than the hospital-owned practice side. About a percent on the hospital side, compared to close to 5.5% on the physician-owned side. And then decreases were equally kind of spread across. On the physician-owned side, they felt the pain a little bit more than their hospital-owned colleagues. About 4.5% on the surgical specialty side decrease, whereas on the hospital-owned side it was about a half a percent decrease. Non-surgical was about the same between physician-owned and hospital-owned, about a point and a half decrease. And then in the advanced practice provider, your nurses and PAs, etc., again, the physician-owned practices took a bit of a bigger hit. Again, probably tied because you got a lot more of those APPs practicing at surgical non-surgical specialty groups. Almost down about two points, whereas the hospital-owned side remained relatively flat, a slight increase of about 1.5%. So, yeah, there were some differences between physician-owned groups and hospital-owned groups, the biggest one being in primary care, the increase of about 5%. On physician-owned side, different than flat on the hospital-owned side. By and large, similar. But that would be the one kind of greatest anomaly between physician-owned and hospital-owned practices.

Mike: And just a couple minutes ago, you talked about the loans and how they helped to offset what could have been a decrease in compensation. Were there other variables that contributed to compensation growing modestly while patient visits declined?

Andrew: Yes, I think there are– I don’t think. There are different compensation methodologies that, this year, this past year in particular, really, I think, did a lot to stabilize our business. And so for those groups, either hospital-owned practices or large, multispecialty groups that may be either private equity backed or in a group ownership perspective, from a physician perspective, I think the way they’re modeling compensation has become so evolved that we did a good job of kind of balancing out a very tumultuous, obviously, year. In that, things like RVU bonuses for higher production and things like maintenance of a base salary, regardless of RVU production, I think evened out a lot of what could otherwise have been a very roller coaster year from a compensation perspective that many in the physician-owned practices might have been feeling, especially those smaller physician-owned groups. So I think in addition to the obvious governmental support for our industry and others, I think the compensation methodologies and structures around physician contracts really came to bear in the past year to help keep compensation afloat to where it should be, even at times when volumes were radically shifting, both first down and then as they ramped back up and in some cases ramped back up north of 100% of what typical volumes would look like. So I think those things helped even out those potential high and lows of those curves.

Mike: So, Andrew, when we look back on 2021, how do you think compensation trends might look?

Andrew: My prediction is that they will look promising in that volumes will be far more stable, of course, and compensation will be a little bit more on a traditional three to five year trajectory. That said, there is a massive staffing problem right now on the provider side, as all of your listeners know. And so we recently did a quick point in time poll of about 1200 or so respondents and 70% said they are going to be hiring a new physician. And we have some data from November of 2020 that says about the same sort of percentage on the APP front. So with as much hiring is going to be going on in our industry and staffing levels back up, I absolutely think the compensation is going to go up and so more costs and higher levels of compensation, I suspect, as groups compete for those in high demand sorts of providers. There’s the telehealth conversation, which is always interesting. And assuming the federal government continues to keep telehealth reimbursement at the same levels as they have been during the pandemic, which we are hopeful of, then telehealth is here to stay on a major level. And I think if that stays, then as reimbursement for telehealth activities goes up, I think you could conceivably see compensation going up as RVU production gets, I would say, more adequately or more on par compensated for telehealth activities as it would non-telehealth activities. And so now if you have providers who are opening up their access a little bit more broadly for both inpatient and digital services, then presumably RVUs are going to go up and compensation will follow. So I think all of those factors continue to push compensation in the trend that was, I will say, stunted or paused in 2020, but will pick back up in 2021. So I think the growth curve for compensation will continue to go slightly up, certainly a little bit more than in the past.

Mike: That’s a great analysis, Andrew. If someone wanted to get a copy of this report, where can they go?

Andrew: Yeah, they can go to, you can get the full report there. And I think as groups are really analyzing their compensation, both in 2020 and then as we talked about and beyond, I think offers lots of compensation related resources, trends, and a lot of analytical reporting to find out a little bit deeper dive into the numbers, which I know your listeners are keenly interested in getting into.

Mike: Andrew Swanson, thanks so much for joining us today on the Hospital Finance Podcast.

Andrew: My pleasure. Thanks, Mike.

The Hospital Finance Podcast

SUBSCRIBE for Weekly Insider Updates

  • Podcast Alerts
  • Healthcare Finance News
  • Upcoming Webinars

By submitting your email address, you are agreeing to receive email communications from BESLER.

BESLER respects your privacy and will never sell or distribute your contact information as detailed in our Privacy Policy.

New Webinar

Wednesday, June 12, 2024

live streaming

Partner with BESLER for Proven Solutions.