Physician Compensation Climbs Due to Increased Productivity and AI Utilization: MGMA Report
Physician Compensation on the Rise Due to Increased Productivity and AI Utilization
Physician compensation has seen a significant increase year-over-year, driven by higher productivity levels and the adoption of artificial intelligence (AI) in healthcare practices, according to a recent report by the Medical Group Management Association (MGMA).
The report highlights that physicians are being pushed towards higher productivity levels compared to the rebound years following the COVID-19 pandemic in 2021 and 2022. This trend is attributed to the ongoing economic and staffing challenges faced by healthcare providers.
Primary care, surgical specialty, and nonsurgical specialty physicians in independent practices all reported higher median work relative value units (work RVUs) in 2023 compared to 2022. Similarly, in hospital-owned practices, median work RVUs increased for primary care and surgical specialty physicians, as well as for advanced practice providers.
Provider compensation has increased for the fourth consecutive year among primary care and nonsurgical specialty physicians. Primary care physicians saw the largest gains in total median compensation at 4.44%, followed closely by surgical specialists at 4.42%, with nonsurgical specialist physicians experiencing a 1.81% increase in 2023.
Despite the gains in physician compensation, the report notes that the five-year changes in physician compensation across all specialty types since 2019 lag behind the nearly 21% surge in the Consumer Price Index (CPI) during the same period.
Advanced practice providers saw a significant increase in total median compensation, outpacing physicians with a 6.47% rise in 2023, contributing to a 16.23% gain since pre-pandemic 2019 levels.
The report emphasizes the importance of increasing productivity in healthcare practices, especially in the face of limited ability to increase payment rates. The use of new technologies, including AI, is seen as essential in improving overall financial performance and maintaining access to care amidst rising patient demand.
Dr. Halee Fischer-Wright, president and CEO at MGMA, highlighted the importance of embracing digital technologies to optimize operations and address staffing shortages in medical groups. As the healthcare industry continues to evolve, technological innovations are expected to play a crucial role in shifting administrative burdens off clinicians and improving overall efficiency.
The 2024 MGMA DataDive Provider Compensation survey report, based on 2023 data from over 211,000 physicians and advanced practice providers, underscores the ongoing trends in physician compensation and productivity levels in the healthcare industry.
In conclusion, the rise in physician compensation driven by increased productivity and AI utilization reflects the evolving landscape of healthcare delivery and the importance of leveraging technology to meet the growing demands for care in communities.