Survey: Med groups in the red despite compensation increases

Rising Compensation vs. Financial Losses in Medical Groups: AMGA 2005 Survey Highlights

A survey report commissioned by the American Medical Group Association (AMGA) found that while compensation is rising for some specialties, many organizations are losing money.

The AMGA’s 2005 Medical Group Compensation & Financial Survey found that several specialties experienced large increases in compensation in 2004. These include:

• general surgery (8.89%)
• pediatrics and adolescent (8.76%)
• hematology and oncology (8.52%)

Family medicine (6.31%) and internal medicine (7.57%) also saw large increases after several stagnant years.

In spite of this general rise, however, many medical groups actually lost money in 2004. Organizations in the northern region were operating at a loss of $1,365 per physician, while organizations in the eastern region lost $784 per physician. Even profitable regions saw decreases in per-doctor profit. The western region lost $479 per physician—down from $1,530 per physician in 2003. The southern region made only $40 per physician.

Many of the groups represented in the survey made investments in technology and operations to improve care, yet “our current transaction-based reimbursement system is indifferent to these results,” said Donald W. Fisher, president and CEO of the AMGA.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.