Finances and the Family PhysicianThe Reality of Primary Care Compensation

Emily Adams, BA, and John Wiecha, MD, MPHBoston University School of Medicine

Department of Family Medicine – Boston Medical Center

What is the scope ofFamily Medicine?

American Board of Family Medicine Official Definition of Family Medicine

“Family medicine is the medical specialty which provides continuing, comprehensive health care for the individual and family. It is a specialty in breadth that integrates the biological, clinical and behavioral sciences. The scope of family medicine encompasses all ages, both sexes, each organ system and every disease entity.”

https://www.theabfm.org/about/policies.aspx

History of Family Medicine

1946 AMA established a section on General Practice to give voice to the mounting problems and decreasing numbers of generalists. Section develops into American Academy of General Practice.

1966 Three independent reports supporting the value of the practice of family medicine were published: the Millis Report, the Folsom Report, and the Willard Report

https://www.theabfm.org/about/history.aspx

They called for a “a physician who focuses not upon individual organs and systems but upon the whole man, who lives in a complex setting…”, and whose “relationship with the patient must be a continuity one”

History of Family Medicine

(continued)

1969 The American Board of Family Practice was officially recognized in February as the 20th primary medical specialty with 15 pilot programs

1971 The American Academy of General Practice became the American Academy of Family Physicians

1984 Family Practice became the third largest residency with 380 programs

https://www.theabfm.org/about/history.aspx

The specialty was formed because of the dwindling number of medical school graduates entering general practice and the difficulty of general practitioners without board certification acquiring hospital privileges

Training in Family Medicine

• Residency Training – 3 years• 497 accredited programs (2005)

• Broadest curriculum of all specialtiesRotate through internal medicine, obstetrics, gynecology, surgery, emergency medicine, critical care, and psychiatry as well as other medical and surgical subspecialties

• Includes training in both inpatient and outpatient care and a longitudinal patient load

Total level of debt of Family Medicine Residency Graduates

Median Level of Debt = $163,000

American Academy of Family Physicians, Annual Residency Completion Survey, 2005

Examples of Possible Fellowships after Family Medicine Residency

• Community Health• Faculty Development• FM/Psychiatry• Geriatrics• Hospitalist • Integrative Medicine • Minority Health • Obstetrics

• Palliative Care• Preventative Medicine• Research • Rural Medicine• Sports medicine• Substance Abuse• Urgent Care• Women’s Health

Certificate of Added Qualifications

• Adolescent Medicine • Geriatric Medicine • Hospice and Palliative Medicine • Sleep Medicine • Sports Medicine

Procedures Done by Family Physicians

Non-Cosmetic Procedures• Minor office surgery • Joint injection and aspiration • Surgical assisting • Intubation skills • Lumbar puncture • Chest tube placement • Thoracentesis • Anterior and posterior nasal packing • Tendon repair • Central line placement• Casting• EKG interpretation• Colposcopy• OB ultrasound• Cesarean sections• Vasectomies• Circumcisions• IUD insertion • Endometrial biopsy • Breast biopsy• Stress testing

Cosmetic Procedures• Chemical Peel• Laser Hair Removal• Botox• Sclerotherapy• Microdermabrasion• Cryotherapy

Geographic Distribution of ABFM Certified Doctors

(August 2006)

https://www.theabfm.org/about/stats_us.aspx

Practice Type of Family Doctors

https://www.theabfm.org/about/stats_practice.aspx

In What Contexts Do Family Physicians Practice?

Source: American Academy of Family Physicians

6.9%

3.3%

89.8%

Hospital

Other

Office

Most Family Medicine Residency Graduates are Office Based

Note: Based on a January 1, 2006 survey of 32,566 family medicine residency graduates.

In What Contexts Do Family Physicians Practice Versus Other Specialties?

33.0%

12.2%

54.8%

Solo

2 Physicians

3 or More

Internal Medicine

24.1%

6.9%

69.0%

Solo

2 Physicians

3 or More

Pediatrics

22.0%

9.9%

68.1%

Solo

2 Physicians

3 or More

Family Medicine

Source: 2006 Practice Survey - Merritt, Hawkins & Associateshttp://www.merritthawkins.com/pdf/MHA2006SurveyofPrimaryCarePhysicians.pdf

Average number of patient contact hours per week by family physicians

(October 2006)

Source: American Academy of Family Physicians, Practice Profile I Survey, October 2006http://www.aafp.org/online/en/home/aboutus/specialty/facts/14.html

34.641.8

52.6

29.335.3

44.1

0102030405060

Average numberof patient

contact hours inthe office settingper week by FPs

Average numberof hours spent in

direct patientcare or patient-related serviceduring the mostrecent completeweek of practice

by FPs

Average numberof hours

practiced duringmost recent

complete week ofpractice by FPs

Male (N=958)

Female (N=464)

84.4

8.3

2.8

0.4

5.7

9.4

2.3

7.3

0 10 20 30 40 50 60 70 80 90

Office Visits

Hospital Visits

Nursing Home Visits

House Calls

Patients Supervised UnderHome Health Care

Nursing Home PatientSupervised

Hospice Patients Supervised

Patients with Free orDiscounted Care

Average number of family physician visits per week and

average number of patients in various settings (October 2006)

Source: American Academy of Family Physicians, Practice Profile I Survey, October 2006http://www.aafp.org/online/en/home/aboutus/specialty/facts/5.html

Average Visits Per Week

How Are Family Physicians Paid?Six Models of Physician Compensation

Compensation Model

Pros Cons

Equal sharing ● simple to arrange administratively

● discourages overutilization

● no incentive for productivity● penalizes high producers; allows low

producers to “coast”

Productivity ● encourages extra professional effort

● complements capitalist economic system

● feed intragroup competition● requires substantial accounting

management● encourages overutilization● discourages activities (such as teaching) not

directly related to patient visits

Salary ● easy to administer ● can disincentivize entrepreneurship● can indebt corporation depending on

income

http://www.aafp.org/fpm/981000fm/cover.html

Compensation Model

Pros Cons

Salary plus bonus ● offers security● allows physicians to increase

income through performance

● may cause minimum work standards to become norms

● places large component of income at risk and depending on subjective measurements

Productivity plus capitation mix

● encourages efficiency● recognizes different revenue

streams of a practice and rewards doctors as such

● complicated to administer● can create differential treatment

levels based on patients’ payment stream

Capitation ● encourages physicians to have an interest in appropriate, efficient provision of care

● may encourage underutilization● requires complex data tracking

http://www.aafp.org/fpm/981000fm/cover.html

How Are Family Physicians Paid?Six Models of Physician Compensation

(continued)

How Are Family Physicians Paid?Six Models of Physician Compensation

(continued)

What Do Family Physicians Actually Make?

And Which Family Physicians Make More?

Salary in Residency

Average salaries offered (in dollars), 2002-2003

http://www.aafp.org/online/en/home/aboutus/specialty/facts/23.html

Median and Mean 2005 Income of Family Physicians

(Before Taxes)

• Data collected October 2006• Presented by Demographic Categories• Data includes Full-time and Part-time Physicians

http://www.aafp.org/online/en/home/aboutus/specialty/facts/15.html

Salary by Census Division (2005)

http://www.aafp.org/online/en/home/aboutus/specialty/facts/15.html

Salary by Practice Type (2005)

Salary by Gender (2005)

Salary by Practice Location (2005)

http://www.aafp.org/online/en/home/aboutus/specialty/facts/15.html

Salary by Age of Physician (2005)

http://www.aafp.org/online/en/home/aboutus/specialty/facts/15.html

Yearly Salary by Different Practice Traits (2005 Physician Salary Survey Report)

Low, median and high represent the 25th, 50th, and 75th percentiles.

Copyright 2005 - Hospital & Healthcare Compensation Service and John R. Zabka Associates

Distribution of Family Physician Incomes

(After Expenses)2002 AAFP demographic survey

Comparison of National Annual Incomes of Family Practice vs.

General Practice2005 Physician Salary Survey Report

Copyright 2005 - Hospital & Healthcare Compensation Service and John R. Zabka Associates

Low, median and high represent the 25th, 50th, and 75th percentiles.

Factors that Increase Earning in Family Medicine

• High-earners: Those with 2003 pre-tax individual incomes of more than $160,000 after expenses

• Low-earners: Those with 2003 pre-tax individual incomes of less than $160,000 after expenses

www.fotosearch.com

From a survey of 730 active AAFP members who had been out of residency five years or longer and worked at least 40 hours per week.

1) Providing more patient visits (high-earners saw a mean number of 122 patients per week; low-earners saw 84)

2) Practicing the full scope of family medicine in the hospital setting

3) Being in larger practices (which may be related to the next four factors)

4) Providing clinical lab, physical therapy, occupational therapy and imaging services in-house

5) Viewing negotiations with payers and evaluating contracts as very important

Factors that have a Large Association with High Earning

In order of significance

Factors that have a Large Association with High Earning

In order of significance (continued)

6) Participating in quality improvement, marketing, strategic planning and benchmarking

7) Having in-house billing and collections

8) Seeing more Medicare patients (nationally, may vary by state)

9) Working more hours

10) Being paid based on productivity

11) Planning to purchase an EHR

Factors that Do Not Have a Significant Impact on Earning

In no particular order

• Current use of an EHR

• Number of staff meetings

• Practice management courses for physicians or staff

• Educational level of in-house billing staff

• Fee-for-service versus capitated revenue

• Percentage of co-payments collected at the time of service

• Aging of accounts receivable

How does Compensation in Family Medicine compare to

other Primary Care Specialties?

What is the current demand for Primary Care Doctors?

Comparison between Different Specialties

All Physicians vs. Starting Physicians 2006 AMGA Compensation Survey

http://www.cejkasearch.com/compensation/amga_physician_compensation_survey.htm

Primary Care Internal Medicine

Comparison between Different Specialties (By Region)

2006 AMGA Compensation Survey

http://www.cejkasearch.com/compensation/amga_physician_compensation_survey.htm

Primary CareInternal Medicine

Income Trends by Specialty - 2005Presented by Percentage of Physicians in

Income Brackets

Primary CareInternal Medicine

Current Demand for Family Physicians

AMA NewsJune, 2006

“MOST WANTEDFor the first time in six years, general internists and family physicians are at the top of the ‘in demand’ list for hospitals and medicals groups, according to a review of 2,840 Merritt, Hawkins & Associates’ listings. Here by year are the number of physician searches by specialty starting in 2002-03 and continuing through 2005-06.”

Current Demand for Family Physicians

“According to Merritt, Hawkins & Associates’ 2005 Survey of

Hospital Physician Recruiting Trends, more hospitals are

actively engaged in recruiting family physicians than any other

type of physician.”

- Leslie Champlin – AAFP News Now (7/25/06)

Future EarningPotential

“It isn't unusual for students to hear that physicians working in family medicine don’t make enough to pay off their loans. However, the truth is that family physicians make enough money to pay off student loans and have the lifestyle they want.”

“In the future, incomes for family physicians are projected to increase as much as 25% in practices that use new technologies and new care models, such as chronic disease management.”

Debt Management – Publication of American Academy of Family Physicians, 2007

http://www.aafp.org/online/en/home/publications/otherpubs/debtmgmt.html