Listen and followApple PodcastsSpotifyYouTubeMore apps · Browse all episodes
Join us in this insightful episode as we delve into the 2024 MGMA DataDive, the gold standard for physician compensation data. Our guest, Jon Appino, the driving force behind Contract Diagnostics, will explore the latest trends in physician and APP compensation, the impact of inflation, specialty disparities, geographical variations, and the productivity paradox. We’ll also discuss the growing importance of quality measures in compensation, challenges faced by hospitals, and strategies for effective employment contract negotiations.
Jon Appino has been the driving force behind Contract Diagnostics since 2011, where he leads a dedicated team on a mission to empower physicians with the knowledge, tools, and confidence to negotiate robust employment contracts and secure the best compensation packages.
He discusses the KevinMD article, “2024 MGMA DataDive: Unveiling key trends in physician compensation.”
Our presenting sponsor is DAX Copilot by Microsoft.
DAX Copilot, by Microsoft, is your AI assistant for automated clinical documentation and workflows. DAX Copilot allows physicians to do more with less and turn their words into a powerful productivity tool. DAX Copilot automates clinical documentation—making it available in the EHR within minutes—and clinical workflows, including referral letters, after-visit summaries, style and formatting customizations, and more.
70 percent of physicians who use DAX Copilot say it improves their work-life balance while reducing feelings of burnout and fatigue. Patients love it too! 93 percent of patients say their physician is more personable and conversational, and 75 percent of physicians say it improves patient experiences.
Discover AI-powered solutions for clinical documentation and workflows. Click here to see a 12-minute DAX Copilot demo.
VISIT SPONSOR → https://aka.ms/kevinmd
SUBSCRIBE TO THE PODCAST → https://www.kevinmd.com/podcast
RECOMMENDED BY KEVINMD → https://www.kevinmd.com/recommended
GET CME FOR THIS EPISODE → https://www.kevinmd.com/cme
I’m partnering with Learner+ to offer clinicians access to an AI-powered reflective portfolio that rewards CME/CE credits from meaningful reflections. Find out more: https://www.kevinmd.com/learnerplus
Transcript
Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast. Today we welcome back Jon Appino. He’s the CEO of Contract Diagnostics. Today’s KevinMD article is “2024 MGMA DataDive: Unveiling key trends in physician compensation.” Jon, welcome back to the show.
Jon Appino: Thanks, man. Always good to be here. I feel like I should keep a note of which shirt I have on and what podcast, so I’m not repeating too many of the same shirts, but hopefully I haven’t worn this one in a couple of shows. So I appreciate being back.
Kevin Pho: So today we’re going to talk about key trends in physician compensation. So before going into it, just tell us, for those who aren’t familiar, what exactly is the MGMA DataDive?
Jon Appino: Yeah. So as employers look at setting compensation, they look at benchmarks, and there are a couple of surveys out there. On the surface, they seem large. The MGMA, the Medical Group Management Association, is the largest survey. I think this last year, the 2024 survey had 225,000, 230,000 people that were in the survey. Now, that’s a combination of APPs and physicians, and out of 1.35 million different folks in the country, it’s about a 15 percent participation rate. So it seems like the gold standard is still only capturing 15 percent, maybe, of the available providers out there. It obviously varies by specialty and region and everything else.
But the MGMA is a database that people, that physicians, can log on to; they can take the survey. Employers can input physicians into the survey, and they take all the data, scrub it, clean it, make sure it looks the way that it should, make sure the p-values are significant, if you will, and they publish it once a year. And it’s published in many different forms. It’s analyzed forwards and backwards by many different organizations. It’s a fantastic data set. It is far from perfect; it’s got a lot of asterisks, which we can go into, of course.
But one of the main things that I think it’s important for everybody to understand is we’re talking today about the 2024 data. Well, it’s 2024 now, and so this is the current year for the data. However, this is data from 2023. So they capture data all through 2023, then they analyze it, months and months and months of analyzing, throwing data points out, capturing new ones, clarifying, cleaning it up. They publish it in April or May or so of each year. And so I think the article that we’re talking about today was written back in June or July of ’24, and the data was a month or two old at that point.
But the 2024 data, which is used all through 2024, is based on 2023 contracts, or 2023 earnings, 2023 RVU production, 2023 quality contributions. So there’s always that slight delay in compensation, which makes it challenging from a lot of angles. But one thing I want every physician, every APP out there, to know is that the 2024 data isn’t what’s happening this year; it’s what happened last year. So at any rate, every year the new data comes out; it will continue to be analyzed for the year in the past.
Real physician voices, twice a week
Free, and one click to unsubscribe.
Kevin Pho: And how important is the MGMA data when it comes to addressing physician compensation and negotiating physician compensation?
Jon Appino: I think it depends on who you’re asking. So from an employer’s perspective, if we talk to a hundred employers at Contract Diagnostics, probably eighty of them, or eighty-five maybe, reference that they use MGMA in some form or fashion. Some of them, and again, we can get into how they use it, but some of them use it just straight up. Some of them use a blend with other surveys. Some of them have consultants (MGMA may be one of them) that put together what fair market value would be for a physician based on specific things.
A physician, though, if they have the data, as far as negotiating their compensation and how important is it, it can be vital, because, for example, a hospital may be offering a physician a salary that’s at the median, or at the 25th percentile, or at the 75th percentile. They could be asking that same physician to produce at a higher percentile. And oftentimes employers will sound like they’re being transparent, saying, “We start everybody at MGMA 25th, or MGMA median, or MGMA 75th.” And if they say, “And therefore that number is this,” if the physician doesn’t have the data, then they just kind of have to take their word for it. But if they have the data, they can say, “Wait a minute, my data says this,” and then you can get into a discussion around what maybe fair means for that particular role.
Kevin Pho: And I know that there are, of course, different companies with different physician compensation surveys. In general, are their numbers coalescing around similar values, or is there some variation between the companies?
Jon Appino: They are about the same. It depends on which one you look at. Some are more focused on hospital-based positions. Some are more focused on, like, maybe larger groups. C is, of course, focused around more academic positions, even though MGMA has an academic data set. But they’re all about the same as far as some of the major surveys that are used and often blended together.
Kevin Pho: All right. So let’s get into the meat of the article, which, of course, are the trends. So after looking at the data yourself, what are some observations that you have?
Jon Appino: Well, it’s interesting, because we have seen some specialties where, as they report RVUs or production or collections, and they report the total cash compensation earned by the provider, we see some trends that are maybe misaligned. For example, we might see dermatology producing 4 percent more in terms of work volume but earning 14 or 16 percent more per year. So they’re earning a lot more than they’re producing on a basis.
And then we’ll see the reverse on others. So interventional cardiology is one example; emergency medicine is another, where their increase in production is significant, 12, 14, 16 percent, but it only meant a 3, 3.5 percent increase in their total compensation. So we’re seeing overall trends that are differing based on specialties. Sometimes we’ll see every physician getting more efficient, every physician earning more money, but this year what we saw was a little bit different. Most everyone became more efficient; they generated more collections, more RVUs, but how that turned around into their bank account on a percentage basis was off based on the specialty that you’re practicing.
Kevin Pho: And do you have any hypotheses or explanations as to why that is?
Jon Appino: I’ve got a few, but I’m not 100 percent sure if they’re accurate. So with dermatology, of course, it depends on how they’re rolling in the numbers. So again, some of the aspects we talked about earlier with data: So emergency medicine physicians, for example, it doesn’t report how many hours they work. It just reports what the average emergency medicine physician earns. So if you have a young physician who’s out of training, working twice as much as somebody in their midcareer, trying to pay off those student loans, that’s not reflected in the data. Their 400 or $500,000-a-year income goes in along with everyone else who just worked a regular emergency medicine schedule. So some of those data are a little bit difficult to manage. And then, of course, comparing production and everything else in a specialty like emergency medicine is challenging.
How dermatology is reported can also be challenging, based on their clinical collections, based on their cosmetics, based on sales, that they’ve got products that they’re compensated on. So I think that’s a potential. And of course, then you look at the pandemic, how far we are out, what’s the wait for procedurals, and those kind of things. But I think overall that kind of explains some of those things.
But I also think it depends on which coding the employer is using, if they’re using 2020 CMS codes or 2021 CMS codes, because that could matter as far as the increase in their potential RVU numbers, depending on, of course, what specialty you’re in. I think there are a lot of theories, but I don’t think anything’s been actually formalized and said, “This is the reason.”
Kevin Pho: How about the contrast between surgical specialists and nonsurgical specialists? Are you seeing any trends there either way?
Jon Appino: We saw primary care and surgical specialists do the best. I think it was a 4.4, 4.5 percent increase. This is outside of nurse practitioners; APPs, the nurse practitioners and PAs, did the best out of everybody last year, at a 6.4, 6.47 percent increase, I believe it was. But if you break out each individual specialty, yeah, we saw primary care physicians do better, about 4.5 percent better year over year. We saw surgical specialists do better, about 4.5 percent year over year. Then everyone else was a little bit less than that 4, 4.5 percent.
Kevin Pho: So advanced practice practitioners, the nurse practitioners and physician assistants, you’re saying that they had the biggest gain, according to this past data set?
Jon Appino: They did. And I think, as you look at future trends, a lot of employers are looking at, depending on the state, where they can, I don’t want to say get by, but where they can hire more nurse practitioners, as they seem to find them an easier hire than a physician. Obviously they cost less, but they could not do the same amount of work. But we’re seeing a lot of organizations really increase the number of nurse practitioners and APPs or PAs that they have in their roles, just versus their physician employees. And I think that that’s one of the reasons that we saw a large increase in APP overall total compensation last year.
Kevin Pho: How about the difference between physician-owned practices and hospital-owned practices? Were there any compensation differences there?
Jon Appino: I don’t recall off the top of my head. I know it almost depends on the specialty, because some specialties are almost completely hospital-based, like cardiology. It’s kind of gone from a model where 98 percent of them were private to now 94 percent, I think, are employed. So we’ve seen a big shift there. Now we’re starting to see a swing back in private equity, depending on how things work out this year in cardiology specifically.
But we do see employed physicians tend to do better in most specialties. There are select specialties where, in private practice, physicians earn more. Orthopedics is one. Family practice, depending on the state, is another. Let’s see, ophthalmology would be another, and dermatology, of course, but we don’t see that many employed dermatologists and that many employed ophthalmologists either. So I think the data is a little bit skewed. But we do see employed physicians, especially fresh out of training, earn significantly less; that first-year data set is significantly better for hospital-based than private practice.
Kevin Pho: So you mentioned this data set has data from 2023. So are you seeing any trends in the contracts that you’re seeing in 2024 that may continue some of these trends, or potentially are the start of new trends?
Jon Appino: Yeah, a couple things. We’re seeing student loan reimbursement come back at a higher rate than we thought, and, of course, that plays into total cash compensation, depending on where, the specialty. In 2024, we’re seeing the quality bonuses that were reported in 2024’s data, the 2023 numbers: The report said 50 percent of people had quality bonuses. And I haven’t pulled our 2023 stats at Contract Diagnostics, but I pulled our 2024, and we’re running about 28 percent quality bonus. So we see about 28 percent of physicians have access to some type of quality bonus. I don’t know if that means that their data was a little bit skewed last year, or what, but we do seem to see, according to their data last year, we’re seeing fewer quality bonuses that are being offered to physicians this year.
But we’re seeing higher increases in signing bonuses. We’re seeing more generous relocation amounts. We’re seeing grossed-up relocation amounts, which is kind of interesting. We’re seeing the same one- or two-year guaranteed salaries. We’re seeing, for the most part, salaries remain somewhat typical from what they were last year. We’re not seeing big bumps this year compared to last year. So I’m not quite sure what the data will show when it comes out in May or April of 2025, but I don’t think we’ll see as robust an increase this coming year as we did this previous year. But we see physicians producing an awful lot of RVUs and an awful lot of collections.
Kevin Pho: Of course, when physicians look at the numbers, a contract negotiation is so much more than whatever the compensation numbers are. So for those physicians who may be listening to you and thinking about the MGMA numbers that they’re being offered, tell us some other questions they should be thinking about that go beyond the salary numbers that they’re offered.
Jon Appino: Yeah, great question. I think it’s looking long term, based on what their goals are. If their goals are long term, I think maybe the salary today is not as important as the ability to produce and earn a good living into the future. I think looking at the stability of the program can be really important, especially as we look at retirement patterns of physicians and hospitals having a hard time recruiting and retaining physicians. So yeah, maybe we can hire some nurse practitioners or some PAs to cover clinic in some situations, but they’re not going to take trauma call, and they’re not going to take STEMI call.
And depending on where you are and your situation and how many partners you may have, it’s important to look into the future and think: If your partners leave, what happens to call? If you are obligated to do seven days or ten days of call per month as a general surgeon, as part of your base salary, what happens if your colleagues take off? Do you need to do fifteen? Do you need to do more? If so, are you paid for it? I think looking at those types of things is really important, because again, if you look at MGMA, it just reports your total cash compensation. It doesn’t say, “And this physician did ten days of call and got paid for three, and this physician did twelve days of call and got paid for twelve.”
So I think, since those things aren’t reported, we have call rates, but it doesn’t say what that physician did as far as how many calls, and I know that all of that matters. So I would say, as a physician looks at negotiating his or her contract, looking at what their obligations are from a time perspective, in addition to what MGMA shows from a compensation perspective.
Kevin Pho: We’re talking to Jon Appino. He’s the CEO of Contract Diagnostics. Today’s KevinMD article is “2024 MGMA DataDive: Unveiling key trends in physician compensation.” Jon, as always, we’ll end with some take-home messages to the KevinMD audience.
Jon Appino: Yeah, take-home messages. So one, obviously, geography matters. With the MGMA data that we’re talking about, geography is really important, and the state differences were significant in some. So if a physician is flexible with their location, that’s a fantastic way of changing their financial future.
The other takeaway I’ll throw out there is around the data itself. So oftentimes when we talk to physicians, they will tell us that their employer uses MGMA. If we’re negotiating with an employer on behalf of a physician, the employer will tell us, “We use MGMA.” And I think it’s important, when they say that, to clarify, because if I’m an interventional cardiologist practicing in St. Louis, and my employer says, “Well, we use MGMA,” I think it’s important to clarify what part of MGMA, because in MGMA, there’s a state-level data set. There’s also a minor geographical data set. There’s also a regional data set. There’s also a national data set. So which of those are they using? And then, inside of that data set, what number are they using?
So there’s data for all practices. There’s data for hospital-based. If I’m a hospital-based physician in St. Louis, there’s hospital-based data. They could use either of those. There’s also a population over a million; they could also use that. There’s also a federally qualified health center or not a federally qualified health center, so they could use the not federally qualified health center if mine’s not one of those. There are all types of different numbers that they could use. If they’re saying, “I use the median of MGMA,” it literally could be one of eight or twelve different numbers.
So if your employer says, “Well, we just use MGMA,” it’s important to see which one, because those numbers could have a big spread, and they could be playing the data to their benefit and to your detriment. So it’s important to understand: A, get all the data, number one. And then, number two, make sure you clarify with them, “What data set are you using? Let’s be more specific and more granular.” Because I do think that that matters when the physician is negotiating his or her contract.
Kevin Pho: Jon, as always, thank you so much for sharing your perspective and insight. Thanks again for coming back on the show.
Jon Appino: Anytime, man. Appreciate it.
Listen and followApple PodcastsSpotifyYouTubeMore apps · Browse all episodes
