As the COVID-19 pandemic presented unique challenges for healthcare providers and beyond, physician compensation has mostly trended back toward pre-COVID levels per the Medscape Physician Compensation Report 2021 (“Medscape Report”). According to the Medscape Report, which included information from 17,903 physicians in over 29 specialties, average salaries for primary care physicians (“PCPs”) decreased slightly from $243,000 in the prior year to $242,000, and specialists’ fell just $2,000 from $346,000 in 2020 to $344,000 in early 2021. According to Michael Belkin, JD who is a divisional vice president at Merritt Hawkins & Associates, “Many physicians used the Paycheck Protection Program to help keep them afloat; some were able to renegotiate their lease contracts; a large percentage reduced their staff, which reduces their expenses; and those in capitated plans were getting paid even though they weren’t seeing as many patients. Additionally, the acceleration of telehealth – and more insures paying for it – helped physicians during this time.” The Medscape Report contains comprehensive data taken from October 2020 to February 2021 comprised of physicians’ salaries, bonuses, hours worked, and specific challenges faced over the past year. The following paragraphs detail some of the key takeaways from the Medscape Report.
While physician compensation has generally remained steady as compared to the Physician Compensation Report 2020, many specialties did have noticeable changes. For example, Plastic Surgery saw a 10% increase in average compensation as the boom in video conferencing may have led many to seek out cosmetic procedures. On the other side, Otolaryngology and Allergy and Immunology physicians saw a 9% decrease in average compensation as large numbers of lower acuity patients avoided healthcare facilities altogether.
According to the Medscape Report, 92% of the physicians who realized a decline in income attributed the decline to the COVID-19 pandemic. Specifically, due to job loss, reduction in hours and a reduction in patient volume. In addition, 13% of physicians struggled through a temporary period of no earnings with an average length of time of having no income at 3 months. However, it should be noted that 45% of physicians reported they did not realize negative financial or practice-related effects due to the pandemic.
Physician compensation was not the only area which saw an impact as 22% of physicians surveyed saw a decrease in their hours worked. However, likely due to the growing number telemedicine providers and the return of elective procedures, 58% of PCPs and 65% of specialists have seen their hours return to prior year levels. Per the Medscape Report, physicians averaged 51 hours per week as opposed to the 50 detailed in the 2020 report.
Despite working relatively the same number of hours per week, around 54% of survey respondents have seen a reduction in patient volumes ranging from 1% to 76% or more as many practices were forced to close or lay off staff due to financial struggles amidst the pandemic. Dermatology and Ophthalmology were hit the hardest and safety protocols, social distancing mandates, disinfecting areas and answering patient questions also contributed to the decline in patient volumes. However, according to Halee Fischer-Wright, M.D., president and CEO of the Medical Group Management Association, we are likely to see an increase in patient volumes because of deferred care over the past year and an increase in hiring at medical practices, according to the report.
Similar to prior years’ results, large compensation gaps exist amongst men and women physicians. Specifically, men in primary care on average earned $269,000, whereas women earned $211,000, up from the 25% gap detailed in the 2020 survey. Furthermore, male specialists earned 33% more than female specialists, up from 31% in the 2020 survey. Per the survey respondents, women make up less than 20% of the physicians in the higher paying specialties such as: Cardiology, General Surgery, Orthopedics, Plastic Surgery and Urology.
Challenges for physicians were abundant in the latter part of 2020 and early 2021. 23% of survey respondents detailed that the most challenging part of their job was the many rules and regulations associated with patient care dictated by boards and insurance providers. 7% detailed the risk associated with treating COVID-19 patients as a major challenge. However, physicians noted that the two most rewarding parts of their job was knowing that they were making the world a better place and gratitude/relationships with patients.
The Medscape Report detailed a multitude of challenges physicians have endured over the past year. However, physician compensation appears to be normalizing as patient volumes increase and elective cases resume. However, the gender pay gap saw an increase and physicians continue to face hardships with substantial administrative work and rules and regulations. Physician shortages will continue to be an issue and may be heightened as a quarter of the respondents will not or at least have second thoughts about taking Medicare or Medicaid patients. Lastly, due to the large amount of physician practices closing due to the COVID-19 pandemic, there is the potential for a surge in physician employment as physicians may be weary of re-opening their practices.