Managed Care


Physicians' real income continues to fall

MANAGED CARE July 2006. © MediMedia USA
Compensation Monitor

Physicians' real income continues to fall

MANAGED CARE July 2006. ©MediMedia USA

Adjusted for inflation, physicians' net income from the practice of medicine declined 7 percent between 1995 and 2003, according to a national study reported by the Center for Studying Health System Change. Primary care physicians and general surgeons fared the worst in keeping pace with inflation; specialty occupations did much better.

The study cites flat or declining fees from both public and private payers as the major contributor to this decline. Medicare payment rate increases for physician services amounted to 13 percent, but general inflation was 21 percent over those eight years. In 1995, commercial fees were 1.43 times Medicare fees; by 2003 this ratio had fallen to 1:23. Declining fees affect all physicians but for medical specialists, whose productivity and volume of procedures are growing rapidly, this has less effect.

For primary care physicians and specialists dependent on office visits rather than procedures, declining fees are likely to mean declining income.

Despite the downward trend, medicine overall remains one of the most well-paid professions. Median income for patient-care physicians was $170,000 in 2003, and mean physician net income was about $203,000. The Bureau of Labor Statistics reports mean annual wages of $36,201 for all occupations in 2003.

Source: Losing Ground: Physician Income, 1995–2003. Center for Studying Health System Change


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