Physician Compensation Trends 2014Being a physician has never been easy. And the business of health care delivery has become one of the most highly-regulated and complex business sectors in the economy. Changing demographics, the Affordable Care Act (ACA), and other market forces have changed the way physicians work, how they are reimbursed, and how much they are ultimately compensated. The following are some of the most important factors affecting physician compensation trends:


• Affordable Care Act provides for enhanced reimbursements for preventive care.
• Cost containment by government and insurers will cause physician pay to decrease.
• Fee-for-service will eventually be replaced by other physician compensation arrangements.


One major challenge for physicians is the pressure to move away from fee-for-service to different payment models, such as bundled payments. Insurers and the ACA are leading a move toward the concept of bundled care, which seeks to coordinate care and promote successful outcomes as opposed to paying for services regardless of outcome.


This trend is part of the move toward managed care. Managed care can decrease costs by removing incentives to increase the number of visits and procedures for each patient. Under managed care, physicians are not paid based on the number of procedures, tests, or other possibly unnecessary services they order. By encouraging physicians to focus on outcomes, this care model can lead to reduced costs by eliminating unnecessary and wasteful patient services.


For physicians who understand how to work within this model, it can actually lead to better physician compensation than the traditional fee-for-service model. Since the pressure to move away from fee-for-service is coming from both government and private insurers, it is inevitable that it will be replaced by new payment models. It makes sense for physicians to prepare now for this change.


Some of the ACA provisions are designed to increase physician compensation based on better outcomes. For example, Medicaid provides for enhanced reimbursements for many services that would not have been covered before the ACA, such as evaluations and vaccinations. It is important for primary care physicians to adjust their practices to take advantage of these enhanced reimbursements. Also, the health insurance industry is experimenting with new care delivery methods that do not require a doctor visit, such as telemedicine. Keeping up with these programs will be vital for any physician seeking to maintain and grow a medical practice.


For physicians seeking to succeed in a constantly changing health care environment, the most important thing is to stay current. Understanding which programs and initiatives affect physician compensation trends, when they take effect or expire, and how to take advantage of each program is the most important factor. To stay ahead of these physician compensation trends, physicians need to adjust their practices to fit the changed environment. In the long run, this should lead to better outcomes for both patients and physicians.


Free Download: Physician Compensation Trends & Effects on Recruitment