For immediate release on January 23, 2020

Hospitals and Health Systems Incentivizing Primary Care and Advanced Practice Providers to Enable Better Care at Lower Costs

Dallas, Texas — January 22, 2019 —According to ECG’s 2019 Physician Compensation Survey, compensation for primary care providers (PCPs) collectively increased by 3.4%. This increase is a sign of the value hospitals and health systems are placing on the role of PCPs as fundamental enablers of population health—an important mechanism in the relentless quest to provide care to more patients, with fewer resources and lower costs. To that end, healthcare organizations are also employing more advanced practice providers (APPs), thereby increasing care capacity and mitigating a shortage of physicians.

“APPs have become a very important cohort of providers at health systems across the country, but organizations are struggling to determine the most efficient and effective way to utilize them within current care models and compensation structures. As regulations change and APP compensation plans introduce more variability, access to reliable and quality APP compensation and production market data has become critical to medical group performance,” remarked Josh Halverson, ECG Principal and Provider Financial Services practice leader. “The APP data in ECG’s survey is the best, most refined market compensation data in the industry which supports healthcare leaders as they as they look to optimize their medical group performance.”

ECG’s 2019 survey also found that, in 2019, 6.7% of all physician compensation was dependent on performance as measured by quality metrics, which was up from 5.5% in 2018. Interestingly, of all the physician types, PCPs have the highest percentage of their compensation tied to quality and patient satisfaction scores, reinforcing the idea that organizations are treating PCPs as the central figures in population health management and are implementing compensation models that incentivize this perspective.

Other key findings from this year’s survey include the following:

  • Compensation for physician specialists increased by an average of 3.5% compared to 2018, with hospital-based specialists making the biggest gains.
  • The average benefit expense per FTE as a percentage of physician compensation increased modestly, from 16.0% in 2018 to 16.9% in 2019.
  • Of the 2019 survey participants, 78% of physicians are paid under production-based compensation incentive plans—the lowest rate in the last five years.
  • On average, physicians who supervise APPs earned between $6,000 and $15,000 per FTE for their efforts.
  • According to the survey, 62% of organizations pay established APPs using a straight salary plan. This is a decrease from 2018 and suggests that APP compensation models are increasingly incorporating some variable metrics.
  • Compensation for nurse practitioners and nonsurgical physician assistants (PAs) increased by 3.3% and 3.4%, respectively, while surgical PA compensation decreased by 1.2%.
  • For APPs, the average benefit expense per FTE rose to $27,590, or 21.3% of compensation—an increase in absolute numbers but a decrease in the percentage of total compensation.
  • recruiting for neonatology physicians with 80% of open positions taking more than six months to fill.

About the Survey

ECG’s Physician Compensation Survey is now in its 20th year and is the most comprehensive provider performance study in the healthcare industry. The 2019 results are based on responses from 26,642 physicians and 9,296 APPs, with benchmarks for 110 physician specialties and 15 APP types. The survey reports on critical provider performance trends such as physician compensation methodologies, compensation and production benchmarks, primary care panel size, CPT procedure code distributions, physician and APP benefit trends, and additional key performance metrics (e.g., work standards, recruiting and signing bonuses by specialty, patient access).

To learn more about ECG’s 2020Physician Compensation Survey and other reports, contact Maria Hayduk, Associate Principal, at mhayduk@ecgmc.com.

About ECG

ECG is a strategic consulting firm that is leading healthcare forward, using knowledge and expertise built over the course of more than four decades to help clients see clearly where healthcare is going and navigate toward success. With deep expertise in strategy, finance, operations, and technology, ECG builds multidisciplinary teams to meet each client’s unique needs, from discrete operational issues to bigger-picture strategic and financial challenges. Working as trusted partners with hospitals, health systems, medical groups, academic medical centers, children’s hospitals, ambulatory surgery centers, and healthcare payers across the country, ECG delivers smart counsel and pragmatic solutions to the critical challenges facing healthcare providers. ECG’s national presence includes offices in Atlanta, Boston, Chicago, Dallas, Minneapolis, San Diego, San Francisco, Seattle, St. Louis, and Washington, DC. .