Alexandria, VA – Data from the 34th annual AMGA Medical Group Compensation and Productivity Survey demonstrates the profound effect of COVID-19 on physician compensation. Though the survey, conducted by AMGA Consulting, found very modest increases in compensation, there were significant decreases in productivity, which can be directly tied to the pandemic. The data reveals the devastating economic impact of COVID-19 on healthcare provider organizations and indicates that they may need to rethink their compensation models in order to remain resilient in the face of future disruptions.
“The trends we saw in this year’s survey were the obvious result of flat compensation combined with a decline in volume of services,” said AMGA Consulting President Fred Horton, M.H.A. “Medical groups paid a steep price to retain their physician talent, even though productivity steeply declined. COVID-19 highlighted the need for medical groups and health systems to reconsider their compensation plans so that they rely less on obligatory annual pay increases and more on incentivizing productivity that rewards valuable outcomes. The shift to more value-based compensation models will help organizations become more resilient against future economic downturns.”
The survey found that in 2020, overall physician compensation increased by 0.12%, down from the 3.79% increase seen in 2019. Meanwhile, overall production decreased by 10.17% in 2020, compared to a 0.56% increase the previous year. The compensation per work RVU (wRVU) ratio increased to 10.82%, up significantly from the 2.14% observed in 2019.
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Respondents employed various strategies for addressing this disparity: 50% reported limiting reductions in physician production compensation (i.e., guaranteeing compensation), and 25% reported advancing physician draws/salaries to be balanced at a later date. Data indicates that the mostly flat change in pay was due largely to how medical groups handled compensation throughout the COVID-19 pandemic.
“While stark, this decline in wRVU was not surprising,” said Elizabeth Siemsen, AMGA Consulting director. “Medical groups temporarily cancelling elective procedures, an inability for some patients to access healthcare services for portions of the year, and the apprehension of other patients to seek in-person care for fear of COVID-19 infection all played a role in the declines we observed.”
Primary Care
In 2020, median compensation for all primary care specialties increased by 0.40%, median productivity decreased by 10.63%, and compensation per wRVU increased by 12.55%. This is compared to 2019, where compensation increased by 4.46%, median productivity increased by 0.44%, and compensation per wRVU increased by 2.6%.
