MGMA reports

Physician Compensation Amid a Tumultuous Year

Physician offices had to pivot, adapt to maintain compensation levels, MGMA reports.

Last year, healthcare was one of the industries hit hardest by the COVID-19 pandemic. In an effort to flatten the

curve, physician offices shifted to a telehealth approach to treat patients. While the pandemic was the source of unforeseen economic challenges, practice closures, and even lower patient volumes, studies show that physician income was largely stable for 2020. New research from the Medical Group Management Association reveals that compensation for most physician specialties has remained steady or increased slightly, despite the wide-ranging financial impacts of the COVID-19 pandemic on physician practices in 2020.

Compensation trends for 2020

From a study conducted throughout 2020, MGMA produced a report that analyzes the impact of the pandemic on a vital sector of the healthcare industry. Primary care physician compensation either remained steady or saw modest growth in 2020. According to a media release, “total compensation for primary care physicians increased by 2.6% between 2019 and 2020 compared to the three- and five-year cumulative increases of 5.27% and 10.15% respectively.”

Even with significant patient access challenges, compensation trends for “other physician specialties also sustained”. Any compensation changes for most of the physician specialties were very modest or just flattened out. If there were decreases in compensation, it was not as large as expected. Surgical physicians with limited patient volumes decreased by 0.89%, while nonsurgical specialists decreased by 1.29%.

In a media release, Dr. Halee Fischer-Wright, the President and CEO of MGMA, discussed the findings of the report by saying “MGMA’s modest compensation findings belie the turmoil of 2020. Our numbers tell a story of a year of unprecedented challenges that could have potentially led to a serious decline in compensation across every category we track.”

Adapting to new processes

The ability to pivot in the middle of a crisis is what saved medical practices in 2020. Dr. Fischer-Wright explained that these practices saved themselves by adapting to the times. She said, “Practices acted quickly to leverage government programs to cover staff costs and expenses during the early part of 2020. They adapted to new delivery models such as telemedicine and were able to quickly ramp up when patient volumes returned later in the year. It is a 2.6% testament to the resiliency of physician groups that weathering the challenges of a year that increase tested us all in so many ways.” in total One of the most significompensation cant ways that medical practices for primary adapted is telehealth. Telehealth care allowed for practices to continue to treat patients virtually, espephysicians cially in areas with high COVIDbetween 2019 19 infection rates. Depending on and 2020 what part of the country they were in, some practices reported an incredible surge in patient volume only a few months into the pandemic. With a monthly survey, MGMA found that many practices quickly restored productivity as early as July 2020. Whether it’s a matter of differing restrictions throughout the country or the kind of practice you are operating, these numbers are notable for such a difficult year.

While supply costs for healthcare skyrocketed, medical practices were able to save money in other areas due to budget cuts. MGMA’s Andrew Swanson, MPA, CMPE, VP of Industry Insights, said “It might be a bit counterintuitive, thinking about groups trying their best to stay afloat – that operating expenses would decrease and, in some instances, decrease significantly. The decision to cut spending elsewhere in the practice likely mitigated the overall impact of increased PPE price hikes.”