Introduction

In the "old days," mothers urged their sons to become doctors and their daughters to marry one. It was understood, in those simpler times, that doctors were "rich."

In today's complex medical profession, physician income has become much more difficult to define. In 2003, for instance, a typical invasive cardiologist made over $400,000, almost double the median income for all physicians, according to a highly regarded annual survey of physician pay. In fact, the difference across specialties has become so significant that the overall average has little meaning anymore.

The gap between specialty medicine and primary care is particularly striking. In 2003, for instance, a typical family practitioner made $152,478, according to the survey conducted by the Medical Group Management Association (MGMA). The median for all specialists was $296,464.

The Haves and Have Nots

And the gap is getting wider. From 1999 to 2003, family doctors' incomes rose less than 8%. Over the same period, incomes for ophthalmologists and dermatologists rose more than 36%.

That's partly why it has become so difficult to compare apples to apples when tracking physician income. A huge variance in the way physicians practice further complicates the analysis. From salaried hospital employees to solo practitioners to partners in large, multispecialty group practices, doctors earn their living in many different ways.

For an individual doctor, consequently, it has become very difficult to assess how he or she rates, income-wise, in the professional world. In fact, the American Medical Association has quit tracking physician income, leaving such reports to a variety of research firms and recruiting agencies. Each of those reports uses somewhat different populations of doctors and different income measures. When all of their figures are documented side by side, even specialty averages become ambiguous.

"It's more meaningful the more you can define it," said Dan Stech, director of survey operations for the MGMA. His group's survey, for instance, draws data from doctors' actual tax statements rather than relying on self-reported income, as some surveys do. It reflects pay levels for doctors in medium to large group practices, and does not include academic physicians or doctors in solo practices or even two-physician practices.

New Revenue Sources Create Winners and Losers

With those caveats in mind, the most recent MGMA income report reveals general trends within the medical profession.

The median 2003 taxable income for primary care doctors was $156,902. That includes internists, pediatricians, and family doctors who do not practice obstetrics. All 3 groups have incomes that are close to the overall median figure.

The median for all specialists was just under $300,000, but that encompasses a range of $162,572 for psychiatrists to $410,272 for invasive cardiologists. The only other specialty earning less than $200,000 was neurology, with a median figure of $190,973.

For all other specialties, incomes are dramatically higher than those for primary care doctors, a gap that is generating attention and concern on many levels.

"Describing family doctors as 'discouraged' is a euphemism," said Stephen Spann, MD, chair of the department of family and community medicine at Baylor College of Medicine in Houston, Texas.

Primary care doctors have always made less than specialists, partly reflecting their shorter training periods and their lower levels of technical expertise. Payment systems have long favored procedures over cognitive services. In recent years, however, specialists have also begun tapping into other revenue sources, such as investing in specialty facilities and lucrative medical technologies.

"The biggest winners have been able to move more services out of the hospital and into their offices," said Fred Simmons, chief executive officer of Clearwater Cardiovascular and Interventional Consultants, a group of 18 cardiologists in Florida. Ophthalmologists, orthopaedic surgeons, and cardiologists especially have found ways to make money on imaging services and other diagnostic tests that are part of the overall patient care they deliver, he said.

Not surprisingly, incomes in those specialties have been rising dramatically. From 2002 to 2003, the median income for ophthalmologists rose almost 18%; for orthopaedic surgeons, almost 10%; for noninvasive cardiologists, almost 14%. The previous year, however, all 3 of these specialist groups experienced either small declines or no growth, probably reflecting the investments they made in new office technologies.

Primary care physicians have had fewer opportunities to cash in on such trends. "The only way they can generate more revenue is to work harder," said MGMA official Stech, "and a lot of primary care doctors are reaching their capacities."

Workforce supply and demand also is working against primary care physicians, he added. Some regions of the country are experiencing significant shortages of certain specialists, which tend to drive up pay levels.

The money trail to specialty medicine also reflects certain values in American culture, said Hoangmai Pham, senior health researcher at the Center for Studying Health System Change (HSC) in Washington, DC.

"We Americans highly prize specialty care," she said. "We have a very high regard for experts, and less respect for what it takes to coordinate care."

Performance Programs Provide Opportunities for Primary Care

Some leaders in primary care accept partial blame for allowing that perception to prevail.

"I don't think we've really articulated our value proposition to society or to policy makers," said family physician Dr. Spann, who led a project for the American Academy of Family Physicians (AAFP) to map the specialty's future. The group's report, published last fall, unveiled a new model for primary care that would enable same-day scheduling, online appointments, group visits for patients with similar health problems, better chronic disease management, and greater reliance on new information technologies.

In short, it called for an overhaul of primary care to provide exactly what patients and insurers are clamoring for, and to capture greater revenues for popular services.

Primary care leaders are confident they are on the same page as payers, who are moving rapidly toward payment strategies that reward doctors financially for better clinical care and more efficient delivery of that care. Such "pay for performance" programs, dubbed P4P, are catching on across the country, and Medicare is planning to expand its programs that have been testing the formula.

"Many performance measures are geared toward primary care," said Ron Bangasser, MD, a family doctor and immediate past president of the California Medical Association. Thus, P4P programs offer a ray of hope for primary care doctors eager to boost their incomes. His own practice, Beaver Medical Group, already has captured some financial bonuses as performance rewards, he said. He believes the new AAFP model fits well with the goals of such programs, by improving quality and holding down costs.

Performance programs can also help doctors achieve efficiencies within their own practices, said MGMA official Stech. Most of them reward doctors for adopting new information technologies, which ultimately benefit the doctors themselves, he said. He already knows of practices that have been able to lay off support staff or just go home early because of the efficiencies they have achieved.

In fact, incentive programs may be just what is needed to get more doctors to adopt "best practices," said Dr. Thomas Long, a pediatrician with San Ramon Valley Primary Care in California.

"Medicine is in many ways behind where corporate America is," he said. "Medical practices have to be run like businesses and not like 'mom and pop shops.'" He, for one, has no problem with current physician pay levels. He is part of a successful group practice, with 6 pediatricians and 5 internists, and they already have reaped the financial rewards of performance programs in their area.

"As a physician I feel well rewarded for what I've done," Dr. Long said. He recognizes the disparity in income levels for different specialties, and agrees that payment strategies should be revised to put less emphasis on procedures and more on cognitive services. But he also believes that all careers have different professional and personal trade-offs.

"I go home and sleep at night," he said confidently.