Physician Income in the Rochester Area How Do We Compare?

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1 Physician Income in the Rochester Area How Do We Compare? Report of a Survey of Physician Income Rochester Physician Workforce Task Force Monroe County Medical Society September, 2005 Revised November 2005

2 Disclaimer: the 2004 Physician Income Survey and Report are intended solely for the purpose of providing information to physicians and policy makers regarding physician recruitment and retention in the Rochester region. It may not be used for any purpose that may violate federal and/or state anti-trust laws. No legal, accounting or professional advice is rendered herein, and readers should discuss specific situations with their own professional advisors. The Medical Society provides only aggregated income data to be used only for informational purposes, and disclaims any attempt to directly or indirectly suggest what income or reimbursement should be established for physicians. The Monroe County Medical Society strives not to violate any U.S. antitrust laws in collecting or disseminating income information. Please be aware that, despite the most careful planning, any report contains some inherent errors. This data is provided as is and the Monroe County Medical Society makes no warranty, either express or implied, including but not limited to, warranties of correctness and fitness for a particular purpose.

3 The Monroe County Medical Society wishes to thank the following individuals and groups for making this study possible: The nearly 1,000 area physicians for completing the survey including the always private and personal information on income The Finger Lakes Health Systems Agency for acting as an independent recipient of the survey data and for their analysis and primary authorship of this report and the Rochester Physician Workforce Task Force for oversight of this survey and their ongoing efforts to assure that there is an adequate and appropriate physician workforce to meet the community s health care needs.

4 Rochester Physician Workforce Task Force Aetna Eastman Kodak Company Excellus BlueCross BlueShield, Rochester Region Finger Lakes Health Systems Agency Greater Rochester Independent Practice Association Monroe County Department of Public Health Monroe County Medical Society Monroe Plan for Medical Care Preferred Care Rochester Business Alliance Rochester Community Individual Practice Association Rochester General Physician Organization Rochester Health Commission Rochester Individual Practice Association Unity Health System University of Rochester Medical Center ViaHealth

5 Table of Contents Executive Summary Conclusions...Page i Recommendations... Page iii Report Introduction... Page 1 Response Rate... Page 3 Hours of Work... Page 5 Professional Income... Page 7 Urban / Rural Differences... Page 13 Is Physician Income in the Rochester Area Competitive?... Page 14 Incidental Findings from the Survey... Page 16 Age Issues... Page 16 Trends in Supply of Physicians... Page 16

6 List of Figures, Charts, and Appendices Response Rate to Survey by Specialty...4 Patient Care Hours Per Week by Specialty...6 Professional Income by Specialty...8 Ratio of Local Income to MGMA, Unadjusted and Adjusted for Work-Time, by Specialty...10 Income by Specialty, Employed and Self-Employed...11 Ratio of Local Income to MGMA, Employed and Self-Employed, by Specialty...12 Urban/Rural Differences in Income by Specialty...13 Survey Response, Are Rochester MD Incomes Competitive?...14 Themes of Free-text Response, by Specialty...15 Appendix, Survey Questionnaire...17

7 Executive Summary Conclusions The present study does not answer all questions about physician income more information is always needed. While the study garnered a response rate far higher than most surveys of the physician community, for a number of specialties there were not sufficient numbers of responses to be assured that the sample was representative. The survey, to be less burdensome to the respondents (and thereby achieve a better response rate) eliminated a number of questions from the 2003 survey, including questions of total professional work time. Despite any shortfalls, this survey provided information from which several conclusions can be drawn, and by which many conclusions from the 2003 survey can be verified:! Overall income levels generally appear to be below comparison values (see Table 4). Six specialties are within ±10% of MGMA regional income benchmarks, but 11 specialties report incomes which are 10% to 20% below their regional counterparts, and 7 others are more than 20% below regional medians, including 2 specialties which are more than 30% below comparisons.! If one adjusts for direct care hours worked, the income comparison is somewhat less depressed. Six specialties have median incomes which appear to be more than regional comparisons, 9 specialties are in the ±10% band, and 3 specialties are 10% to 30% below regional comparisons. However, the number of specialties whose incomes are more than 30% below their regional peers increases to 5, when adjusted for patient care time worked.! Reflective of national trends, income is less for cognitive services than for procedural services. Primary care practitioners and practitioners in specialties such as Child Psychiatry, Occupational Medicine, Infectious Diseases, Endocrinology, Physical Medicine & Rehab all receive incomes below the Rochester area median.! While remunerated at levels substantially less than procedural specialties, local primary care Family Practice, Pediatrics, and Internal Medicine and other cognitive specialties are remunerated at levels equal to their regional colleagues.

8 ! Specialties which rely largely on procedures, on the other hand, are less well paid than their colleagues in other areas. Examples are orthopedics (68% of time-adjusted MGMA regional median), ophthalmology (69%), plastic surgery (74%), otolaryngology (70%), and general surgery (83%).! The current survey indicates that many local physicians spend less time in direct patient care than national averages. Because of the question design, the survey is unable to differentiate how much of this variation is related to administrative tasks versus differences in practice patterns (i.e., teaching, research, part-time status).! There is a perception expressed by many respondents that they are having to work harder, compared even to a few years ago, to maintain their income.! In some specialties such as colorectal surgery, general surgery, neonatology, oncology, and vascular surgery the region is in danger of losing a significant portion of its practitioners to retirement within the next 5 years. The focus of this survey was to gather data on the income levels for physicians to discern their effects on physician recruitment and retention. The marketplace for physicians has changed dramatically in the last decade with national shortages present and developing in many specialties. Our area now has to compete on a national level for physicians to ensure access to quality professional services. While reimbursement level is certainly not the only factor in recruitment and retention, it plays an increasing role as competition for these professionals has heated up. Unfortunately, this survey confirms the impression from the 2003 survey that in aggregate physician compensation lags regional benchmarks, and in some critical specialties we are 30% or more below specialty-specific benchmarks. The results of this survey need to be viewed in the context that income level is only part of the equation in workforce attraction and maintenance. There is a lower cost of living here than other areas, especially other areas in the urban northeast. There are cultural and environmental amenities here not found in many places. But with that said, we as a community need to address the deficit in reimbursement that is identified with this survey, to have a reasonable chance at maintaining the excellent level of health care we currently enjoy and that area businesses tout as an advantage as they recruit essential employees for their work force. Page ii

9 Recommendations 1. Recognizing that the physician workforce committee is not empowered to actually affect the rates paid for physician services, yet given that 60% of respondents did not feel their income was competitive, this committee should continue to monitor and report to the community the status of the community s competitive position in physician reimbursement. It can act as a resource to those groups that have more direct control over factors determining reimbursement (insurers, physician organizations, employers). 2. This survey provides important information regarding physician income. However, in order to ensure that the local physician supply is adequate to meet the needs of our community other factors must be considered. Additional study should be given to quantifying the other direct factors that affect our ability to recruit and retain physicians. Professional lifestyle, matching opportunities to the goals of residents, the relatively low cost of living in the Rochester area, relatively small number of insurers, by many accounts low pressure health care management compared to areas such as California all contribute to being competitive. 3. In discussing solutions to the reimbursement issue, information on work effort, such as RVUs, should be considered along with the results of this study. 4. Before there is a crisis in access to care, efforts should be made to recruit physicians in specialties identified as currently being in shortage or projected to develop shortages due to retirement. Efforts should also be made to improve ways to retain current physicians, including older physicians. 5. There are national shortages predicted in some specialties. These trends should be considered as we address issues of competitive salaries. Primary care specialties are highlighted by some as an area where future focus will be needed. 6. The next study by the Task Force should include quantification of a) the amount of work done by area physicians to earn their income perhaps measured in RVUs rather than hours compared to other areas, and b) the amount of non-clinical time required per unit of clinical time. These items would seek to specifically measure the perception that local physicians work harder than their peers in other areas of the country to earn the same (or lower) income. Page iii

10 Introduction In a report 1 issued in July 2003, the Monroe County Medical Society-organized Rochester Physician Workforce Task Force reported on a survey of physicians conducted for the Task Force by the Center for Governmental Research. The survey was focused on determining factors affecting recruitment and retention of physicians in the Rochester area. The 2003 Report found that, to have a positive effect on physician recruitment/retention, the Task Force and other Rochester-area parties needed to:! Restore a collaborative health care environment;! Actively promote the Rochester Community to prospective and current physicians;! Address financial issues. A key finding from the study was that six out of ten responding physicians indicated that financial compensation was lower here than elsewhere, making them want to leave the area and/or standing as a barrier to recruitment. Unfortunately, the CGR study was able to garner only a 26% response rate, which substantially limited the Task Force s ability to draw conclusions, including which specialties were most affected by reimbursement shortfalls. As a result, the Task Force recommended that there was a need to further address the financial issues raised by the responding physicians. The issue of financial compensation for physicians is one that has been studied nationally by academic researchers, policy experts and physician groups. The Center for Health Systems Change found that physicians experienced a decline in real income between 1995 and 1999 (6.4% for primary care and 4% for specialists). The researchers attributed the decline to managed care plans 1 Rochester Physician Workforce Task Force, Monroe County Medical Society, The Rochester Community Physician Workforce: Factors Affecting Recruitment and Retention, July 2003.

11 negotiating lower prices and controlling utilization. Similar events had occurred in the Rochester area, and there was an often-heard perception from physicians that they were working harder and earning less. Thus, the identified dissatisfaction with physician compensation was seen as having both national and local components. In order to better document both the reality and the perception of physician frustration over compensation, the Rochester Physician Workforce Task Force committed to re-survey the physician community. In an attempt to improve the survey participation rate, the survey was sharply focused on compensation and made as short as possible. The survey data were collected from September 2004 to May 2005 and requested data for calendar year 2003; results are presented in this report. Using a combination of mailing lists of the Medical Society and Preferred Care, surveys were distributed to all active physicians in the Rochester service area 2. To avoid any business or privacy issues, none of the survey responses were received by the Medical Society or any insurer. Rather, the survey responses were received and compiled by Finger Lakes Health Systems Agency; aggregate results were provided to and discussed by the Task Force. The survey was initially distributed by fax, with responses to be faxed to FLHSA. This proved to be difficult for physicians, with many expressing concerns about data privacy in the physician office and in-ability to transmit the sensitive income data anonymously to FLHSA. The survey was subsequently distributed through physician mailboxes in hospitals and staff and committee meetings. Two waves of mailings of the survey, with return envelopes, followed. Responses were received from 987 individuals. Some responses announced retirements, were from non-physician providers or were otherwise unusable, resulting in a final total of 976 usable responses, a 41% response rate. 2 In addition to Monroe County, also includes Orleans and Genesee Counties to the west and Livingston, Steuben, Ontario, Wayne, Seneca and Yates Counties to the south and east. Page 2

12 Response Rate As mentioned, the overall response rate was 976 usable surveys, a 41% response rate. This compares very favorably with national experience with surveys of physicians, which typically average about a 20% response rate. Responses by specialty varied substantially, from 50%-75% response for some specialties but 10%-15% response from others. Table 1 displays the results overall and for all specialties; 5 responses which did not indicate specialty are included in the totals only. The number of physicians in the area used as the denominator in calculation of response rate is based on active physicians participating with one of the local insurers. Some mis-classifications of specialty lead to response rates in excess of 100%. For instance, it is believed that a number of physicians who describe their specialty as hospitalist are listed in the insurer s data as, for instance, internal medicine specialists; child psychiatrists and occupational medicine specialists exhibit similar problems. While a 41% response rate is exemplary, it still leaves some specialties with small numbers of respondents. Care must be taken to avoid release of information where small numbers would make it possible to discern sensitive data. Further, some specialties had relatively low response rates, raising questions about the representativeness of the data. After consultation with statisticians, the decision was made by the Task Force that generally it would not analyze information for specialties where there was less than a 20% response rate. Following that rule, the survey is able to report information on 29 separate specialties. While the decision rules were different, the 2003 survey also had to suppress some specialities responses and was able to report out on 15 specialties. Page 3

13 TABLE 1 Response Rate to Physician Surveys 2005 Survey* 2003 Survey* # in Response Specialty Responses # in Area Response % Responses ALL RESPONSES** 976 2,363 41% 604 2,311 26% ALLERGY % % ANESTHESIOLOGY % % CARDIOLOGY % CHILD PSYCHIATRY % COLORECTAL SURGERY % % CRITICAL CARE MEDICINE % DERMATOLOGY % % EMERGENCY MED % % ENDOCRINOLOGY % % FAMILY MED % % GASTROENTEROLOGY % GENERAL SURGERY % % GYN 3 HOSPITALIST % 5 0 NA IM/PED % INF DIS % INTERNAL MED % % NEONATOLOGY % NEPHROLOGY % NEURO SURGERY % % NEUROLOGY % % OB/GYN % % OCCUPATIONAL MED % ONCOLOGY % OPHTHALMOLOGY % % ORAL SURGERY % ORTHOPEDIC SURGERY % % OTOLARYNGOLOGY % % PATHOLOGY % % PEDIATRICS % % PHYSICAL MED AND REHAB % % PLASTIC SURGERY % % PSYCHIATRY % % PUBLIC HEALTH 1 PULMONARY MED % RADIATION ONCOLOGY % RADIOLOGY % % RHEUMATOLOGY % % UROLOGY % % VASCULAR SURGERY % % OTHER % MISSING 5 23 Insufficient response for further analysis due to small response percent (less than 20%). Privacy caution will be used in reporting due to small numbers (fewer than 6 responses). * 2003 survey included aggregation of some smaller specialties into primary specialties such as internal medicine. ** Total includes 5 responses which did not indicate specialty. Area % Page 4

14 Hours of Work The 2003 survey (which reported on 2001 data) found that local physicians, on average, spend less time in patient care and less time in total hours of work than national averages. However, this measure is highly dependent on the subjective interpretation of what direct patient care is. The current survey chose the direct patient care wording to best represent the supply of physicians available to patients. The option of simply asking hours worked was rejected, as it would have been inclusive of time spent in teaching, research, and administration. The 2003 report compared its survey findings with data from the AMA. However, the AMA data on patient care time included not only direct, face-to-face patient care hours, but also having telephone conversations with patients or their families, consulting with other physicians, and providing other services to patients such as interpreting lab tests and x-rays. While these activities are legitimate patient care activities, there was a real sense among the Task Force that local physicians provided face-to-face time in their survey responses, leading to some apparent disparity in reported patient care effort. The present survey could have attempted to rectify the confusion about definitions. Unfortunately, however, the AMA no longer produces the data on physician work hours or income. Further, there are differences in the make-up of physicians surveyed by AMA compared to the local physician population: the former tend to include largely independent practice physicians, while locally about 50% of physicians are employed. In this report, responses are compared to survey data of the Medical Group Management Association (MGMA); MGMA tends to be representative of physicians in larger group practices. The MGMA data does not include an All Respondents figure. In the current survey (labeled 2005 Survey in all following tables, and reporting on 2003 income data), physicians were asked to indicate their number of hours of direct patient care per week. Overall, respondents say they provide an average of 38.9 hours and a median of 40.0 hours of patient care time per week. These figures were slightly higher than that of the 2003 survey, when respondents indicated they provide 38.0 hours per week for patient care activities. That survey also found that respondents spent 6 hours per week on administrative tasks and lesser amounts on teaching, research and other activities. The 2005 survey, which was primarily focused on income issues but also supply or availability of physicians to provide patient care, did not measure all professional time, but text comments provided suggest that area physicians believe the non-patient care time requirements have increased in recent years. Page 5

15 TABLE 2 PATIENT CARE HOURS PER WEEK 2005 Survey 2003 Survey MGMA Rochester Rochester Regional Specialty Mean Median Median ALL RESPONSES NA ALLERGY CHILD PSYCHIATRY COLORECTAL SURGERY CRITICAL CARE MEDICINE DERMATOLOGY EMERGENCY MED FAMILY MED GENERAL SURGERY HOSPITALIST IM/PED INFECTIOUS DISEASE INTERNAL MEDICINE NEONATOLOGY NEUROLOGY OB/GYN OCCUPATIONAL MEDICINE ONCOLOGY OPHTHALMOLOGY ORTHOPEDIC SURGERY OTOLARYNGOLOGY PATHOLOGY PEDIATRICS PHYSICAL MED AND REHAB PLASTIC SURGERY PSYCHIATRY RADIATION ONCOLOGY RHEUMATOLOGY VASCULAR SURGERY Page 6

16 Professional Income The 2005 survey asked respondents to indicate their total 2003 professional income after expenses but before taxes. The wording of the question was the same as the previous survey, and the same as the question found on the AMA and MGMA surveys. 3 The survey asked for patient care time, only a portion of professional activity, but total net practice income, a potential mis-match. What portion of income is derived from patient care? Surprisingly, most specialties indicated that 95% or more of income was derived from patient care activities. A major exception was infectious diseases, where practitioners indicated they spend only 12 hours per week in direct patient care and derive only 16% of income from patient care. A few other specialties derived only 65% to 75% of income from direct patient care, but no pattern could be discerned. The survey found that responding physicians had an average 2003 income of $174,000, with a median of $150,000 (see Table 3). The median value is a drop from the 2001 value of $155,000 found in the previous survey, but it is uncertain if the change is significant or merely differences in sampling. There have been changes in local physician reimbursement rates in the intervening two years, but they include both increases and reductions. It is important to note that these salary figures do not separate out situations where subsidies are provided to employed physicians. This survey cannot comment on the prevalence of subsidies, but there are anecdotal reports of substantial subsidies for some practitioners. If subsidies are prevalent, the survey may overstate the amount earned by provision of medical care services, and may be reflected in the differences between employed and self-employed physicians observed in Tables 5 and 6. The primary care specialties, particularly Family Medicine and Pediatrics, are among the lowestcompensated specialties in the current survey; as will be seen, however, their income is similar to incomes of colleagues in other parts of the nation. Other specialties which are more cognitive and evaluative (rather than being procedure-oriented), such as child psychiatry, infectious disease, occupational medicine, and physical medicine and rehabilitation, also report relatively lower income. Procedure-based specialties, such as orthopedic surgery, earn a larger income than cognitive specialties, but lag farther behind their regional peers. 3 During 2003, what was your own net income from medical practice to the nearest $10,000 after expenses but before taxes? Please include both your direct compensation (e.g. salary, bonus, research stipends, honoraria, etc.) AND all voluntary salary reductions (e.g. 401(k), 403(b), etc.). Do not include investment income from medical-related enterprises independent of your medical practice. Page 7

17 TABLE 3 Specialty PROFESSIONAL INCOME 2005 Survey 2003 Survey (2003) (2001) Mean Median Roch % of Median AMA Natl AAMC MGMA (2003) National Median MGMA (2003) Regional Median ALL RESPONSES % NA NA ALLERGY CHILD PSYCHIATRY COLORECTAL SURGERY CRITICAL CARE MEDICINE DERMATOLOGY EMERGENCY MED % ENDOCRINOLOGY % FAMILY MEDICINE % GENERAL SURGERY % HOSPITALIST IM/PED INFECTIOUS DISEASE INTERNAL MEDICINE % NEONATOLOGY NEUROLOGY % OB/GYN % OCCUPATIONAL MEDICINE ONCOLOGY OPHTHALMOLOGY ORTHOPEDIC SURGERY % OTOLARYNGOLOGY % PATHOLOGY % PEDIATRICS % PHYSICAL MED & REHAB PLASTIC SURGERY * PSYCHIATRY % RADIATION ONCOLOGY RHEUMATOLOGY VASCULAR SURGERY *Used Eastern instead of North Atlantic median Page 8

18 As can be seen above, there are substantial differences in national estimates of income by specialty. In general, the MGMA data 4 indicates higher incomes than does the AMA data, with the academicoriented AAMC data usually between. Some of the difference could be due to varying years for which the data was collected. The regional data tends to be lower than the national data. The Task Force believes the most appropriate comparison is to the regional estimate from MGMA 5. While there is a national market for physicians, the regional figure best reflects reimbursement patterns. The AMA data is now out of date and not being updated. Table 4, below, indicates that many local specialists are paid well below the regional benchmark. Some adjustments may be appropriate, however. As seen earlier (Table 2), local physicians work different numbers of hours than observed in the MGMA data; some work fewer hours, but some (e.g., plastic surgeons) work more hours. Using those figures, the MGMA income data has been adjusted for time worked. For example, local Family Practitioners indicate they work 35 clinical hours per week, while FPs in the MGMA sample work a median of 40 hours. If the MGMA respondents only worked 35 hours instead of 40, their income might be reduced proportionally, from the base figure of $135,000 to an adjusted figure of $118,000. The ratio of the local FP income figure of $110,000 to the adjusted MGMA figure of $118,000 is 93.1%, instead of the basic ratio of 81.5%. Table 4 displays both the unadjusted and the adjusted income ratios. On a time-adjusted basis, incomes of most local specialties contrast more favorably to the benchmark; some like plastic surgery, however, point out that for the amount of time they spend in care, they are less well paid than their colleagues. 4 Medical Group Management Association, 2004 Physician Compensation and Production Survey, based on 2003 data. 5 The MGMA survey includes data from 10 regions; New York is part of the North Atlantic region, which also includes New Jersey and Pennsylvania. The Eastern Region, used as a substitute for some specialties, includes states from Maine to Virginia. Page 9

19 TABLE 4 Income Comparisons I Ratio of local income 2005 survey to MGMA regional median Ratio of local income to time-adjusted MGMA regional median Specialty Mean Median (<100% indicates MGMA is larger) (<100% indicates MGMA is larger) ALLERGY % 107.2% CHILD PSYCHIATRY % 97.5% COLORECTAL SURGERY % 91.3% CRITICAL CARE % 62.3% DERMATOLOGY % 107.6% EMERGENCY MED % 139.0% ENDOCRINOLOGY % 119.5% FAMILY MEDICINE % 93.1% GENERAL SURGERY % 83.5% HOSPITALIST % 88.1% IM/PED INFECTIOUS DISEASE % 378.4%* INTERNAL MEDICINE % 100.4% NEONATOLOGY % 201.4% NEUROLOGY % 145.9% OB/GYN % 93.7% OCCUPATIONAL MED ONCOLOGY % 112.1% OPHTHALMOLOGY % 69.4% ORTHOPEDIC SURGERY % 67.9% OTOLARYNGOLOGY % 69.8% PATHOLOGY PEDIATRICS % 107.9% PHYSICAL MED AND REHAB % 66.0% PLASTIC SURGERY % 74.3% PSYCHIATRY % 107.4% RADIATION ONCOLOGY RHEUMATOLOGY % 105.7% *Probably erroneous in that a large portion of time is spent in non-clinical activities. Page 10

20 Also affecting comparisons of income is the status of the physician as employed or self employed. Employed status is less common in other parts of the nation than in the Rochester area. There is no consistent pattern of whether self employed physicians make more or less than their employed counterparts. Physicians may become employed because they wish to work fewer hours and be relieved of the tasks of running a practice, thus being willing to accept a lower income for lifestyle gains. Alternately, they may be highly prized clinicians and command a premium in the marketplace, leading to higher salaries than their self-employed colleagues. Some specialties, such as dermatology, may provide non-clinical opportunities to earn income, leading to higher incomes for self-employed physicians. TABLE 5 Income Comparisons II 2005 Survey 2005 Survey Mean Median Median % of Respond. Specialty Self Employed Employed Employed ALL RESPONSES ALLERGY CHILD PSYCHIATRY COLORECTAL SURGERY CRITICAL CARE MEDICINE DERMATOLOGY EMERGENCY MEDICINE ENDOCRINOLOGY FAMILY MEDICINE GENERAL SURGERY HOSPITALIST IM/PED INFECTIOUS DISEASE INTERNAL MEDICINE NEONATOLOGY NEUROLOGY OB/GYN OCCUPATIONAL MED ONCOLOGY OPHTHALMOLOGY ORTHOPEDIC SURGERY OTOLARYNGOLOGY PATHOLOGY PEDIATRICS PHYSICAL MED AND REHAB PLASTIC SURGERY PSYCHIATRY RADIATION ONCOLOGY RHEUMATOLOGY Cells with fewer than 6 responses have been suppressed for privacy. Page 11

21 Some specialties do better or worse when compared to the MGMA Regional benchmark depending on employed/self employed status. Table 6 Specialty Income Comparison III 2005 Survey Median (2003) Self Employed Employed Ratio of EMPLOYED income to MGMA (2003) (<100% indicates MGMA is larger) Ratio of SELF-EMPLOYED income to MGMA (2003) (<100% indicates MGMA is larger) ALL RESPONSES NA NA ALLERGY % CHILD PSYCHIATRY % 68.1% COLORECTAL SURGERY CRITICAL CARE MEDICINE % DERMATOLOGY % EMERGENCY MEDICINE % ENDOCRINOLOGY FAMILY MEDICINE % 70.4% GENERAL SURGERY % 85.2% HOSPITALIST % IM/PED INFECTIOUS DISEASE % INTERNAL MEDICINE % 99.3% NEONATOLOGY % NEUROLOGY % OB/GYN % 100.0% OCCUPATIONAL MED ONCOLOGY % OPHTHALMOLOGY % 57.8% ORAL SURGERY ORTHOPEDIC SURGERY % 70.4% OTOLARYNGOLOGY % 53.4% PATHOLOGY PEDIATRICS % 104.3% PSYCHIATRY % 107.4% RADIATION ONCOLOGY RHEUMATOLOGY Cells with fewer than 6 responses have been suppressed privacy. Page 12

22 Urban / Rural Differences The present survey was distributed to physicians practicing in the 9-county area surrounding Rochester. Are there differences in income among physicians outside Monroe County? The following table, in which a number of specialties are grouped in order to ensure that the rural groupings have an adequate number of respondents, shows that rural physicians enjoy largely equal incomes to their urban colleagues. The exception appears to be among surgical specialists. This result is consistent with a recent report 6, which found that rural physicians often have higher incomes than urban physicians, especially if cost of living is taken into account. TABLE 7 Income Comparison IV Urban/Rural Differences in Income 2005 SURVEY URBAN RURAL N MEDIAN (000) N MEDIAN (000) ALL RESPONDENTS 806 $ $150 FAMILY MEDICINE 56 $ $120 PEDIATRICS 132 $ $119 INTERNAL MEDICINE 192 $ $140 OB/GYN 52 $200 5 $210 MEDICAL SPECIALTIES 100 $ $270 GENERAL SURGERY 32 $ $200 ORTHOPEDICS 21 $292 8 $215 OTHER SURGERY 58 $250 9 $232 HOSPITAL-BASED / OTHER 163 $ $202 6 Reschovsky JD and Staiti A, Physician Incomes in Rural and Urban America, Issue Brief 92, Center for Studying Health System Change, January Page 13

23 Is Physician Income in the Rochester Area Competitive? Survey respondents were asked, Do you consider your income competitive for recruitment and retention? Nearly 60% of respondents did not consider their income competitive. Even if one considers that there may be a negative response bias, the nearly 600 physicians who believe their income is not competitive with other areas of the country represent a substantial pool of dissatisfaction. The perception may not be accurate, however, as examined below. Approximately 350 respondents, over onethird of all responses, provided free-text comments concerning the competitiveness of their income. Concentrating on the comments of physicians less than 50 years of age (those who might be in the best position to move if they are unhappy), the free-text was read to determine if there was a discernible pattern to the comments. Table 8 presents some of those patterns or themes. Some examples will give a flavor of the comments:! Income Inadequate Income level is substantially below other areas. Have lost more than 40% of our group to higher reimbursement positions.! Income inadequate for workload there are actually three ideas subsumed by this category. The first is that a person has to work harder to earn the same income as a few years ago. The second is that a person has to work a lot of hours (e.g., more than 60 hours/week) to earn a desired income. The third is that paperwork and other non-clinical requirements create an overburden which results in excessive workload, even if clinical time is reasonable. Present compensation is 30% less than compensation in despite seeing an increase in number of patients. My income is at that level because of volume of work. I work many long hours including weekends and nights to care for my patients. The paperwork and hassles are endless. My income has progressively gone down over the last 10 years yet I am working harder.! Income greater in other areas Took a [12%] loss of income moving from PA to NY. Fees in Rochester are way too low, 10% higher in Syracuse and Buffalo, 30% higher in Cleveland and Pittsburgh, 40%-50% higher in Florida. Page 14

24 Table 8 Specialty N<50 # of Comments Themes Anesthesia 9 4 Income inadequate Cardiology 6 2 Income inadequate Dermatology 6 2 Income inadequate Emergency Med 12 4 Income greater in other areas Family Medicine Income inadequate for workload Primary care underpaid compared to specialists Gastroenterology 3 2 Income inadequate Internal Medicine Income inadequate for workload Primary care underpaid compared to specialists Neurology 8 4 W orkload/lifestyle Obstetrics 22 6 Income inadequate Ophthalmology 16 4 Income inadequate Orthopedics 16 7 Income inadequate for workload General Surgery Income inadequate for workload Pediatrics No pattern Psychiatry Income inadequate for workload Radiology Income inadequate Others 11 3 Income inadequate In all, 80 (22%) of the 350 commentors indicated they did not feel their income was adequate, and another 57 (16%) said the income was inadequate for the workload. Thirteen individuals indicated they were moving away from the region due to inadequate compensation or poor working environment. Nine blamed NYS issues, e.g., high taxes, for inability to recruit new physicians. Eleven individuals indicated that the only physicians who can be recruited to Rochester are those who have family ties or other personal reasons to come here. Interestingly, 7 commentors indicated this was a good environment in which to practice, while 7 said it was a bad environment. General surgeons expressed the most dissatisfaction as a specialty group. There was also a great deal of dissatisfaction expressed by the disparity of income of the primary care practitioners compared to other specialties. The comments made were strongly held, but does the evidence match the perception? Commentors who believed their income was not competitive had a median $10,000 less ($150,000 vs $160,000) than commentors who believed their income was competitive. Page 15

25 Data indicate that primary care practitioners Family Practice, Internal Medicine, Pediatrics and Obstetrics are near par with income of their colleagues in other areas, but 60% (n=517) indicated their income was not competitive. As discussed on page x, the disparity in income of primary care practitioners and specialists is a national problem but a source of major frustrations for local primary practitioners. On the other hand, the data also suggest that income of procedure-oriented practitioners, such as General Surgery, Orthopedics, Ophthalmology, Otolaryngology, Plastic Surgery, are well below their peers, and 85% (n=130) indicated they felt their income was not competitive. Incidental Findings from the Survey Age Issues The 2002 survey noted that some specialties in this area had a large portion of practitioners who were approaching retirement age, suggesting possible future problems with access to those specialties. The 2005 survey also asked respondents about age and retirement plans, incidental to the question of recruitment and retention. In some specialties, including colorectal surgery, general surgery, neonatology, oncology, and vascular surgery, over 25% of respondents indicated they would retire in the next 5 years. Trends in Supply of Physicians Based on the number of physicians who bill local insurers, there were 2,363 clinically active physicians in the area at the end of This is remarkably similar to the 2,311 physicians active at the time of the 2003 survey. A report being prepared for the Rump Group for release in a few months will incorporate the age data from this survey, as well as data from the University of Rochester on plans of residents completing their specialty training, interviews of physicians exiting the Rochester area and interviews of physician and health care leaders. It seeks to identify local barriers to physician recruiting and retention and to forecast specialties in which the area will need to recruit, retain or develop additional supply in order to meet the needs of the community. Page 16

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