The Beginning of Physician Contract Negotiations
When I negotiated my first job in 2005 I had no idea how much to ask for my salary, benefits or other perks. I primarily searched for jobs on job board sites that were kind enough to post their compensation data. Once I had a good idea of my fair market value, I would ask older peers and attendings to give me feedback on what I had found. Unfortunately, none of them had any solid advice except to be careful of practices offering too much money.
After a few years of practice, I became one of the informal leaders of a hospital-based group since I was good with spreadsheets and numbers. The contract I signed three years prior was up for negotiation and now I was on the other end of the table negotiating with the hospital on behalf of my entire group. After brief introductions, the hospital representative pushed a small piece of paper toward us. “This is your current market value,” he told us, “but I think you are worth way more. Therefore we will not be cutting your salary this contract cycle…” Thus began my understanding of physician contract negotiating and big data in the form of Physician Salary Surveys.
What are P
hysician salary Surveys?
This big data comes from physician salary surveys administered annually by third parties. They include Medical Group Management Association(MGMA), American Medical Group Association(AMGA) and Sullivan Cotter. Physician Salary Surveys are the summaries of extensive and validated questionnaires submitted to physician practices and hospitals regarding their demographics, income, productivity, call, benefits, and practice type. It requires proof of practice by providing location, NPI number and signed consent to use the data. The data is then compiled and presented in a database or book format. The questionnaire is voluntary and uncompensated except for access to the data upon successful completion.
Once the questionnaires are submitted the compiled data is presented based upon mathematical averages, means, and ranges adding up to several hundred pages worth of data. Since the data is submitted annually, it also compares the data to previous years with
Hospitals, employers and recruiters need data on fair-market value for physician compensation. The surveys can be purchased as individuals or corporate entities depending on the intended use of the data. This data is then used to negotiate with physicians to determine their salary, benefits, work schedule, and other benefits. It is also used to keep hospital and employers in compliance with Stark and Anti-kickback laws. https://www.beckershospitalreview.com/legal-regulatory-issues/physician-compensation-10-core-legal-and-regulatory-concepts.html
Why are physician salary surveys important?
As mentioned before these surveys are very important for employer compliance with employers who participate in government contracts and help determine
I was lucky when I negotiated my first contract and I am sure there are many savvy physicians who also relied on job board data and mentors to help guide them through their first contract negotiation. Since most large employers and hospitals use to physician surveys to determine physician compensation, not knowing the data will place an individual physician at a disadvantage. These entities will use this advantage to keep their costs down and offer lower compensation. As an individual physician, it is vitally important to have access to physician survey salary data to ensure you are fairly compensated.
Who are the major physician survey companies?
When referring to physician salary surveys a simple google search could bring up surveys by Medscape, Merritt Hawkins, AMA, Doximity and Salary.com and the data they provide is very good. However, if you look at the data that big healthcare use as the definitive benchmark there are only three names: MGMA, AMGA, and Sullivan Cotter. These companies have established themselves over decades as the industry standard for physician surveys producing consistent results that every major healthcare system trusts. Since they are the industry standard they also are used to justify compensation for highly paid physicians while keeping hospitals and practices in compliance with healthcare laws.
The MGMA was part of the American College of Medical Practice Executives(ACMPE) which was founded in 1956 and now exists exclusively as MGMA. The organization consists of forty-five thousand(45K) members including practice administrators, executives, and healthcare leaders. It represents nearly half of all the healthcare organizations in the U.S. The main purpose of the organization is advocacy and education for its members in order to improve the healthcare industry. It also produces an annual Physician Compensation and Production Survey for the past 20 years, which now consists of 147,000 providers/participants including non-physicians.
The survey represents data from the previous fiscal year, collected in the first quarter of the calendar year and then published in the second quarter. So the title is usually, ” 2019 Report Based Upon 2018 Data.” Getting access to the data depends on the type of entity and size
The cost is not transparent and you have to contact the sales team to deterimine the cost. It used to cost $895 non-members and $595 for members for individual licenses in the past. When purchased it comes in a digital form called the “Data Drive.” The data is very comprehensive and looks at every conceivable aspect of physician compensation. I will review what is reported in future posts.
The American Medical Group Association has been conducting compensation surveys since 1986 and consists of 260 Medical Groups and 92,000 participants. The survey conducts careful collection, screening and compiling of the data as to not give any individual or practice the ability to corrupt it according to their website. The data sets they study include (http://www.amga.org/wcm/PI/SAT/PhysComp/methodology.pdf)
- ASA Units
- Branch Type
- Compensation Analysis
- Compensation to production
- Compensation to Net Collections
- Compensation to Work RVUs
- Fringe Benefits
- Gross productivity
- Mean and Median Calculations
- Net Collections
- Percentile Rank of Compensation
- Demographics and Regional Analysis
- Starting Salaries
- Work RVUs
The report is very comprehensive and represents every specialty with some specialties with
Sullivan Cotter (https://sullivancotter.com)
Sullivan Cotter has been producing their version of the survey for 27 years and it represents data on 205,000 physicians and non physicians. They represent not-for-profit organizations, hospitals, health plans, academic centers and larger
Sullivan Cotters Survey Examens
- Base Salary and Total Compensation
- Productivity in terms of RVUs, collections and patient visits
- Sign on bonuses, retention bonuses, relocation assistance and other incentives
- Non-physicians, academic appointments and medical directorships
Here are some highlights from the 2018 reports:
I personally have never had direct access to Sullivan Cotter’s survey(I have tried as a medical director to access) but a report by the Urban Institute and Sullivan Cotter gives insight to the quality and magnitude of the metrics. http://www.medpac.gov/docs/default-source/contractor-reports/jan19_medpac_models_physiciancompensation_cvr_contractor_sec.pdf?sfvrsn=0
Unlike AMGA, SullivanCotter has very good representation of all primary care and procedural specialists. I also think they do a nice job comparing salary to productivity.
Does the data differ or look the same between MGMA, AMGA or Sullivan Cotter?
I performed an exhaustive search to find sources of the Data on the internet using a google search. I discovered four sources of data which I placed side by side categorically for the sake of comparison. All of their data is under copyright so I only will show what is publicly available.
All the data sets come from 2015 and 2016. The MGMA data set is academic which differs from the non-academic data. I have access to non-academic data for 2015 and 2016. I cannot share this data publicly but I can say it is very close to the AMGA data set within 3-5% and some cases ~1%. Sullivan Cotter’s salaries were generally lower and AMGA and MGMA but higher than the Academic MGMA data.
Here is a comparison of the compensation survey reports created byStaffCare:
What about other physician salary surveys?
There are several other popular and very comprehensive physician surveys that can be found for free on the internet. These include Merritt Hawkin, Medscape, AMA, and Doximity. All of these surveys bring tremendous insight not only to the income of physicians but also to other aspects of the practice of medicine.
Here is the main problem with the free surveys, no one uses them for benchmarking income or negotiating salaries. They are more for entertainment and looking at physician compensation from a global perspective or for recruiting purposes. The other issue with these surveys has to do with the quality of the data. Many of the online surveys rely on end-users to submit the data and none of it is verifiable. In other words, it is an opinion and somewhat subjective.
MGMA, AMGA and Sullivan Cotter have a dedicated process of data verification by requiring the participants to sign an agreement indicating that the data comes from a reliable resource like the W-2 of the physicians. Likewise, each person in the survey is a real person with
Here is an example MGMA provides a very detailed guide for preparing their annual survey:
Why are physician salary surveys so important to individual physicians?
Getting back to my story, I felt terrified of representing my group on my first collective contract negotiation. As a precaution, I decided to start preparing for it several months in advance.
My senior partners accompanying me were coaching me on the strategies of negotiation but none of them mentioned anything about these surveys. Since I was the Medical Director at the time MGMA had reached out to me and my practice manager earlier in the year about filling out the surveys. Having done so we received a rather large book with all the data. Needless to say, the survey amazed me and now I had the single greatest ally to help with the negotiation.
In preparation for the meeting I looked at regional job vacancies in my city and state to get the temperature of the local job market and I compiled a giant spreadsheet of data that I extracted from MGMA. Going into the meeting I knew the group did not have a raise for seven years and based upon the MGMA our current income fell below the median for my specialty.
Back to the negotiation room. One of my senior negotiators grabbed the piece of paper and flipped it over. His face said it all as he passed it to the rest of us. Shocked about how much lower that number was than what we were currently earning I asked, “Where did this number come from?” Perplexed, he answered, “From our HR department.” Calmly I answered, “I am not sure where that number came from but we would like to share with you some of our numbers.” The rest we shall say is history as we received a 9% raise over 3 years with future raises indexed to MGMA data annually.
Physician Salary Surveys if used properly level the playing field for physicians when it comes to contract negotiation. Since the data is impartial, many institutions use this data to index the income of their physicians and physician extenders.
How Do I access a Physician Salary Survey?
Accessing these surveys can be very challenging and expensive.
For individuals seeking the data without participating, I recommend finding an attorney or contract specialist who subscribes to the data. These groups purchase a special license that allows them to use the data with their clients. When you seek out an attorney for contract or service agreement reviews, make sure they have access to the data. The alternative would be to pay for it directly by contacting these groups directly.
Physician salary surveys were completely unknown to me until after I started managing my group and became an insider. Once I participated in one of the surveys my reward was a book filled will over three hundred pages of very detailed data. This data has greatly enhanced my understanding of the economics of medicine. It has been invaluable in my contract negotiations, group productivity and keeping my income indexed to inflation. I highly recommend that every physician become well versed in the language of big data and physician salary surveys.
*All Photos are copyright and licensed by Canva.com and used with permission.