The wait is over! The highly anticipated 2024 MGMA DataDive, a federally recognized gold standard for physician compensation data, has finally arrived. This comprehensive analysis offers unparalleled insights into physician and advanced practice provider (APP) compensation, making it a crucial resource for staying informed in today’s health care landscape. While some may consider it the current “gold standard,” it is essential to remember that even the best data sets can be surpassed, so keeping an eye out for future developments is wise.
Beyond the numbers: a deep dive
The MGMA DataDive isn’t just a collection of numbers. It delves deep, providing a detailed picture of physician, dental, and APP compensation across specialties, locations, and practice types. This in-depth analysis ensures the data’s reliability, offering a solid foundation for informed decision-making. Armed with the latest and most accurate information, you can confidently navigate your practice’s future.
A caveat: It’s not the whole picture
It’s important to remember that while the MGMA DataDive is comprehensive, it only represents a fraction (less than 15%) of the physician population. Other, more robust datasets have emerged. This blog post serves as the first chapter in a series, highlighting key findings and trends to help us understand the broader picture of how health care providers contribute to the economy.
Inflation’s grip: Looser, but not gone
The latest job reports paint a picture of a cooling labor market—a decrease in job openings and a shrinking pool of available workers. While skilled workers, particularly physicians, remain in high demand, the days of rapid inflation seem to be behind us. However, reports like the MGMA DataDive suggesting “inflation has cooled” might be an oversimplification. The reality is that inflation is easing, but its impact lingers with high prices persisting for a while longer.
Physician and APP compensation has increased more than 16% overall in the past five years. However, with the current consumer price index (CPI) hovering around 20.60%, it’s clear health care providers are still playing catch-up.
Compensation trends: winners and laggards
APPs saw the most significant compensation increase (6.47%) in the past year. Among physicians, primary care and surgical specialists took home the biggest gains at 4.44% and 4.42%, respectively. Nonsurgical specialists lagged behind with a modest 1.81% increase last year, bringing their five-year growth to 6.08%.
The overall trend points towards improved compensation for providers, but there’s a concerning shift: a decreasing focus on nonsurgical specialists and a rise in the use of more revenue-generating surgical specialists and lower-salaried APPs to replace them in specific areas.
Headwinds for hospitals
Hospitals are facing a perfect storm: rising interest rates, increasing labor costs, persistent staffing shortages, and fierce competition for patients. Overall expenses are skyrocketing, with energy costs being a major culprit. Administrators are looking towards cost-saving measures, health care IT solutions, and pharmaceutical services to bridge the gap between what they pay physicians in various specialties and locations.
Productivity paradox: Working harder, not smarter?
Despite most physicians being employed by hospitals, physician-owned practices consistently demonstrate higher productivity levels. This includes metrics like collections, total encounters, and work relative value units (wRVUs) across most specialties. Nonsurgical specialists are working the hardest, as evidenced by the significant difference in their collections compared to other specialties.
The American College of Surgeons paints a picture of current and future surgeon shortages. This trend stems from dynamic changes in the surgical workforce, technological advancements, shifting lifestyle preferences, and international talent migration. As a result, while surgical specialists saw an increase in collections, their total patient encounters decreased—a trend not observed in other physician or APP groups.
A mismatch of compensation and workload
While median total compensation for physicians saw a modest increase in 2023, some specialties experienced a “mismatch” between their compensation changes and work relative value units (wRVUs)—a measure of the relative value of a physician’s work. Here’s a breakdown:
Specialties with significant pay increases despite minimal or unfavorable wRVU changes:
- Cardiology: Noninvasive
- Dermatology
- OB/Gynecology
- Pathology: Anatomic and Clinical
- Psychiatry
- Pulmonary
These specialties reaped the benefits of more pay for less work.
Specialties with nominal pay increases or decreases despite increased wRVU…