Is there a Compensation Gap between Employed Physicians and Practice Owners?

According to a recent survey by Physicians that looked at differences in compensation between physician practice owners, employed physicians at a hospital or health system and employed Physicians at in independent practice it was concluded that not a big disparity exists between them.

Of the physicians polled across multiple specialties and employment models, sixty-nine percent (69%) that own their practice were paid more than $200,000 in annual compensation. Comparatively, seventy-five percent (75%) of physicians employed by a hospital or health system and sixty-one percent (61%) employed physicians employed at an independent practice were paid in excess of $200,000 in annual compensation. A significant difference was, nearly eight percent (8%) of practice owners earned less than $100,000 income per year compared to only four percent (4%) hospital and employed physicians were under the $100,000 threshold.

Many practice owners simply don’t benefit from guaranteed sources of income such as profit sharing, bonuses, pension and retirement plans offered by hospitals and large health systems. While nearly twenty percent (20%) of practice owner’s incomes came from 100% non-guaranteed sources, only seven percent (7%) of hospital employed physicians and five percent (5%) of independent practice-employed physicians share the same risk.

Productivity, such as patient visits, encounters and RVU’s where closely aligned between practice owners and hospital employed physicians at twenty seven percent (27%) in compensation tied to some form of productivity. Furthermore, only fifteen percent (15%) of independent practice employed physicians income is tied to productivity.

The most compelling statistic is most physicians, whether independent or employed, are only receiving a fraction of income due to patient satisfaction surveys or value-based care.

If you are considering joining a health system or perhaps exiting one we encourage you to click here to contact us to learn more about the options in compensation that can be afforded to you.