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Home / News & IndustryManaged Care Insight and Analysis
Updated: April 14, 2009
Despite Economic Woes, Physician Compensation Increases

Physicians saw their salaries increase in 2008 with an average salary increase of 4.4 percent for specialists and 4.0 percent for primary care physicians, according to Sullivan, Cotter and Associates Inc. (SullivanCotter) 2008 Physician Compensation and Productivity Survey Report.

Nearly three-quarters (72 percent) of the survey participants provided salary increases to their employed physicians in 2008, which is comparable to last year, when 73 percent reported providing a salary increase.

The results also point to increased use of incentive plans, compensation tied to quality measures and a decrease in the rates paid per work Relative Value Units (wRVUs). A total of 257 healthcare organizations nationwide participated in the survey, which includes compensation data for over 41,000 physicians in over 150 specialties.

According to Kim Mobley, a principal at SullivanCotter and the survey director, "While the majority of organizations provided salary increases to physicians, some organizations also decreased compensation for at least some of their physicians. In fact, 10 percent of survey participants decreased cash compensation levels in 2008."

This is less than the 18 percent of organizations reporting decreases in cash compensation in 2007. "When organizations decrease physician compensation, most often it is linked to individual productivity and/or labor market benchmark norms," she adds.

The current physician recruitment environment is highly competitive and survey results indicated an increase in hiring bonuses. This year, 57 percent of the participants used hiring bonuses, compared to only 49 percent last year. Interestingly, the amounts paid have remained relatively stable, with average hiring bonuses of $10,000 for primary care physicians and $17,500 for specialists.

According to the survey, 70 percent of organizations use incentive compensation for their physicians; up from 60 percent.

Address: Sullivan, Cotter and Associates Inc., 45 Rockefeller Plaza, Suite 2048, New York, NY 10111; (212) 322-3287,

  This article was taken from:
Pay-For-Performance Reporter

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