Managed Care

Physician salaries outpace production in 2006

So far in 2006, if the benchmark measure is inflation, then physician salaries are above that line, and work RVUs (relative value units) are below that indicator. RVUs are used by CMS and other payers to determine the payment rate for physician services. According to the Medical Group Compensation & Financial Survey, groups report an overall increase in RVUs of 3 percent. Physician compensation, on the other hand, has increased 7.2 percent.

Medicare's proposed 5.1 percent decrease in payment, coupled with the continuing rise in health care costs, is a challenge that groups will need to address. Insurers should expect compensation formulas to become more complex as medical groups try to create incentives for cost control and quality components.

The following specialists saw significant compensation increases: primary care physicians, cardiologists, dermatologists, and noninterventional radiologists.

Physician compensation and work RVUs, 2005–2006

Source: American Medical Group Association. 2006 Medical Group Compensation & Financial Survey

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