Physician Pay Increases Will Rise Slightly in 2013, According to Hay Group's Annual Physician Compensation Study

PHILADELPHIA --(Business Wire)--

Physicians across all organization types can expect slightly higher salary increases in 2013 with salary increase budgets rising to 2.6 percent, according to results from Hay Group's 2012 Physician Compensation Survey released today. This is compared to actual increases of 2.5 percent in 2012. Specifically, physicians working in group-based practices can expect to see the largest pay increases of 3.0 percent in 2013, while those working in hospital-based settings can expect the smallest pay increases of 2.0 percent.

Similarly, when looking at primary care physicians, those employed by hospitals can expect a 2.0 percent salary increase in 2013, while group-based primary care physicians can expect a 3.0 percent salary increase. This is compared to an actual increase of 5.0 percent in 2012 for group-based primary care physicians and a 2.0 percent salary increase for hospital-based primary care physicians.

"As the Affordable Care Act is fully implemented, primary care physicians will become more critical than ever to the viability of the healthcare system," said Jim Otto, senior principal in Hay Group's Healthcare Practice. "Given the growing shortage of primary care physicians and the expected increase in demand from patients seeking care, we expect to see salary increases for primary care physicians trend upward over the coming years as employers vie for the best talent."

For physician specialists, on the other hand, the expected salary increases in 2013 remained unchanged from the actual increases in 2012. Hospital-based specialists can expect a 2.0 percent salary increase in 2013, while group-based physician specialists can expect a 3.0 percent salary increase.

According to Hay Group's study, the prevalence of annual inentive plans remained the same at 64 percent among all physicians in 2012. Among physicians working in group-based practices specifically, the prevalence of annual incentive plans decreased to 80 percent from 89 percent in 2011. Among hospital-based physicians, the prevalence of annual incentive plans increased to 63 percent from 59 percent in 2011.

"As healthcare organizations transition from a volume-based delivery system to a system based on value and quality of care, many are implementing annual incentive plans to drive behaviors required to succeed in this new environment," said Otto. "By incorporating metrics such as quality of care and patient satisfaction into annual incentive plans, healthcare organizations are forcing physicians to think differently about their approach to care."

Other findings from Hay Group's 2012 Physician Compensation Study include:

Employment contracts grow in popularity: The use of employment contracts continued to increase in 2012 for both hospital-based and physician group-practices. In hospitals, 70 percent of physicians had employment contracts, compared to 64 percent in 2011. For physicians working in group-based practices, 67 percent had employment contracts in 2012, while only 56 percent had contracts in 2011.

Quality measures determine incentive payouts. Measures for determining incentive payouts continue to be dominated by quality and patient satisfaction. For individual performance metrics, 77 percent of organizations reported that they used "quality" and 66 percent relied on "patient satisfaction" to measure physician performance. Conversely, only 39 percent reported "outcomes" as a performance metric for physicians. For group performance measurement, 56 percent reported "quality" as a metric, while 50 percent reported "patient satisfaction" as a measurement used to determine incentive payouts.

Majority of physicians receive malpractice insurance as an added benefit. Most organizations (88 percent) provided some form of malpractice insurance to their physicians. Of those organizations, 97 percent provided the insurance at no cost to the physician.

Study depth and methodology

Hay Group's Physician Compensation Survey has been conducted as an independent survey by Hay Group for over a decade. The survey and subsequent reports cover 132 physician specialties, including 39 pediatric specialties. In addition, the physician compensation report covers 35 non-physician provider positions. Data is reported as of March 1, 2012.

Hay Group has a unique collection and analysis process for physician data, which provides a deeper breakdown of compensation. This is different from most other physician compensation surveys in the marketplace as Hay Group's competitors' collection methods combine aspects of compensation together into a single figure. Hay Group is committed to providing robust and specific information so our clients can make better, more informed compensation decisions.

Additional information about Hay Group's reward information services can be found at http://bit.ly/TmzZrb. Media inquiries and interview requests can be directed to Andrea Friedman at andrea@blisspr.com or at 212-584-5476.

About Hay Group

Hay Group is a global consulting firm that works with leaders to transform strategy into reality. We develop talent, organize people to be more effective, and motivate them to perform at their best. With 85 offices in 48 countries, we work with over 7,000 clients across the world. Our clients are from the private, public, and not-for-profit sectors, across every major industry and represent diverse business challenges. Our focus is on making change happen and helping people and organizations realize their potential.