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Physician Pay Increases Hold Steady for 2014, According to Hay Group’s Annual Physician Compensation Study

August 19, 2013
by John DeGaspari
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Incentive plans increasingly weighted to focus on quality, patient satisfaction, outcomes

Physicians across all organization types can expect to see median salary increases of 2.4 percent for 2014, on par with salary increases last year, according to results from Hay Group’s 2013 Physician Compensation Survey released today. Physicians in group-based practices can expect to see larger pay increases (3.7 percent) than those in hospital-based settings (2.2 percent).

“Overall physician compensation levels continue to modestly increase,” according to Jim Otto, senior principal in Hay Group’s Healthcare Practice, in a prepared statement. “We don’t expect to see any fundamental changes in the near future. Physicians are being tasked with a growing list of new demands—from learning EHR systems to navigating new cost and business model structures—which are influencing how employers want to address compensation increases.”

Primary care physicians can again expect to see slightly higher salary increases than specialists in 2014, particularly in hospital-based settings.

“We have been seeing a slowdown in pay rate increases for physician specialists, and a bump up for generalists, over the last several years, and this trend seems to be continuing,” Otto says. “This may be reflective of fewer graduates pursuing general medicine and additional responsibilities for generalists in driving pay-for-performance health care. The question remains if and how declining hospital revenues and reimbursement changes will affect physician pay.”

The 2013 Hay Group study found that the prevalence of annual incentive plans for physicians remains steady at 63 percent, compared with 64 percent reported in 2012. The measures used to determine incentive payouts—both for individual and group performance—are reflective of providers’ shifting emphasis on quality and patient outcomes. For individual physician performance, there were upticks reported in 2013 incentive plan metrics related to patient satisfaction (70 percent), quality (86 percent) and outcomes (54 percent), compared with 2012 (66 percent, 77 percent and 39 percent, respectively). Group performance metrics in physician incentive plans tracked similarly upward for patient satisfaction (60 percent reported in 2013, compared with 50 percent reported in 2012) and quality (69 percent in 2013, compared with 56 percent in 2012).

“We expect an evolution—not revolution—in incentive plan design for physicians in coming years,” Otto said. “Providers are looking to translate their organizational goals in a more tangible way that will drive the desired behaviors and outcomes they want to achieve. They are still struggling with the best ways to align physicians and other employees with broader goals, and to measure output quality.”



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