SullivanCotter Reports Primary Care and Hospital-Based Specialties Lead in 2023 Physician Compensation Increases

SullivanCotter, the nation’s leading independent consulting firm in the assessment and development of total rewards programs, workforce solutions, and data products for health care and not-for-profits, has released its 2023 Physician Compensation and Productivity Survey report.

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The report reveals the most significant median total cash compensation (TCC) increases for Primary Care (9.5%) and Hospital-Based (8.7%) specialties, and finds increases across most specialty areas in 2023. With the anticipated shortage of primary care physicians (survey respondents reported the highest percentage turnover in primary care at 8.4%) projected to increase, health care organization leaders will confront sustained upward pressure on compensation for these roles moving forward.

SullivanCotter’s data represent the largest and most comprehensive physician compensation resource for health systems and hospitals, with findings reported on more than 306,765 physicians, APPs and PhDs.

Numerous market forces continue to influence health systems’ strategic and operational focus for 2023, many of which are directly impacting the provider workforce. Clinical workforce demand continues to outpace supply, which has been exacerbated by increased turnover and physician burnout and has created upward pressure on compensation. Regulatory changes, including a proposed reduction in the Medicare conversion factor for 2024 and changes to split/shared billing for 2025, continue to create financial sustainability and compensation plan challenges. Finally, in part due to physician supply and demand imbalances, more health care organizations are working to better align physician and advanced practice provider (APP) care delivery models and eliminate potential compensation barriers to team-based care delivery.

“For primary care specialties, the Physician Fee Schedule transition is still impacting physician compensation as compared to last year’s survey results. As for the hospital-based specialties, many of the physician specialties with the most significant reported TCC increases in the 2023 survey were on the front lines in the pandemic, including hospitalists, intensivists, and emergency medicine,” said Dave Hesselink, Managing Principal, SullivanCotter.

The survey also reported that primary care had the largest increase (7.4%) in reported median wRVU productivity from 2022 to 2023. “As primary care patient volumes have rebounded post-pandemic and wRVU values have shifted due to the Physician Fee Schedule changes, this jump in reported wRVU productivity is expected,” Hesselink added. Across all specialty categories, TCC per wRVU rates saw moderate increases over 2022 survey levels with a spike in pediatric surgical rates (8.8%).

The 2023 report showed that base salary and wRVU components continue to be prevalent in primary care, medical, and surgical specialty compensation plans. About 70% of survey participants report using those plan components in their compensation plans, which is consistent with the 2022 survey results. Value-based or quality incentives are used by about 50% of organizations and payments range from 6-8% of TCC for specialists, and 8-9% for primary care, reflecting a slight increase over 2022 survey results which reported ranges of 5-6% and 6-8%, respectively.

Additionally, the prevalence of team-based incentive compensation continued to trend. Similar to the 2022 survey results, approximately one-quarter of organizations (23%) indicated they used team-based incentives in their compensation plans. Of those with team-based incentive compensation, the incentive accounted for 11% of physician TCC, which has been trending upward since 2020 when it was reported at approximately 8%. Just over half of organizations (52%) defined a “team” as including both physicians and advanced practice providers (APPs).

“Increased use of team-based incentive compensation correlates with the growing focus our clients have on population health, care coordination, and positioning APPs to practice at top of license. Now, more than ever, we see organizations evaluating how APPs can most effectively partner with physicians and care teams to deliver high-quality patient care,” said Mark Ryberg, Managing Director and SullivanCotter’s Physician Workforce Practice Leader.

About SullivanCotter

SullivanCotter partners with health care and other not-for-profit organizations to understand what drives performance and improves outcomes through the development and implementation of integrated workforce strategies. Using our time-tested methodologies and industry-leading research and information, we provide data-driven insights, expertise, and data products to help organizations align business strategy and performance objectives – enabling our clients to deliver on their mission, vision, and values.

For more information on SullivanCotter’s surveys, please visit our website at www.sullivancotter.com, or contact us via email or by phone at 888.739.7039.

Note to media: Additional data and interviews are available on request.

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