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					     Finances and the Family Physician
             The Reality of Primary Care Compensation

    Emily Adams, BA, and John Wiecha, MD, MPH
        Boston University School of Medicine
Department of Family Medicine – Boston Medical Center
            What is the scope of
             Family Medicine?

    American Board of Family Medicine Official
          Definition of Family Medicine
“Family medicine is the medical specialty which
provides continuing, comprehensive health care for
the individual and family. It is a specialty in breadth
that integrates the biological, clinical and behavioral
sciences. The scope of family medicine encompasses
all ages, both sexes, each organ system and every
disease entity.”
                                        History of
                                     Family Medicine
1946 AMA established a section on General Practice to give
      voice to the mounting problems and decreasing numbers
      of generalists. Section develops into American Academy
      of General Practice.

1966 Three independent reports supporting the value of the
      practice of family medicine were published: the Millis
      Report, the Folsom Report, and the Willard Report

      They called for a “a physician who focuses not upon individual organs and
      systems but upon the whole man, who lives in a complex setting…”, and
      whose “relationship with the patient must be a continuity one”

                                         History of
                                      Family Medicine
1969 The American Board of Family Practice was officially
      recognized in February as the 20th primary medical
      specialty with 15 pilot programs
      The specialty was formed because of the dwindling number of medical school
      graduates entering general practice and the difficulty of general practitioners
      without board certification acquiring hospital privileges

1971 The American Academy of General Practice became the
      American Academy of Family Physicians
1984 Family Practice became the third largest residency with
      380 programs

   Training in Family Medicine
• Residency Training – 3 years
• 497 accredited programs (2005)
• Broadest curriculum of all specialties
   Rotate through internal medicine, obstetrics, gynecology,
   surgery, emergency medicine, critical care, and psychiatry
   as well as other medical and surgical subspecialties
• Includes training in both inpatient and
  outpatient care and a longitudinal patient load
Total level of debt of Family Medicine
         Residency Graduates

                Median Level of Debt = $163,000

    American Academy of Family Physicians, Annual Residency Completion Survey, 2005
Examples of Possible Fellowships after
    Family Medicine Residency
•   Community Health       •   Palliative Care
•   Faculty Development    •   Preventative Medicine
•   FM/Psychiatry          •   Research
•   Geriatrics             •   Rural Medicine
•   Hospitalist            •   Sports medicine
•   Integrative Medicine   •   Substance Abuse
•   Minority Health        •   Urgent Care
•   Obstetrics             •   Women’s Health
    Certificate of Added Qualifications

•   Adolescent Medicine
•   Geriatric Medicine
•   Hospice and Palliative Medicine
•   Sleep Medicine
•   Sports Medicine
    Procedures Done by Family Physicians

Non-Cosmetic Procedures                    Cosmetic Procedures
•   Minor office surgery                   •   Chemical Peel
•   Joint injection and aspiration         •   Laser Hair Removal
•   Surgical assisting
                                           •   Botox
•   Intubation skills
•   Lumbar puncture                        •   Sclerotherapy
•   Chest tube placement                   •   Microdermabrasion
•   Thoracentesis                          •   Cryotherapy
•   Anterior and posterior nasal packing
•   Tendon repair
•   Central line placement
•   Casting
•   EKG interpretation
•   Colposcopy
•   OB ultrasound
•   Cesarean sections
•   Vasectomies
•   Circumcisions
•   IUD insertion
•   Endometrial biopsy
•   Breast biopsy
•   Stress testing
Geographic Distribution of
 ABFM Certified Doctors
                (August 2006)
Practice Type of Family Doctors

  In What Contexts Do Family
      Physicians Practice?
    Most Family Medicine Residency Graduates are Office Based





Note: Based on a January 1, 2006 survey of 32,566 family medicine residency graduates.

                     Source: American Academy of Family Physicians
In What Contexts Do Family Physicians
   Practice Versus Other Specialties?
                    Family Medicine

                                                               2 Physicians
                                                               3 or More

Pediatrics                                        Internal Medicine
                                Solo                                                    Solo
                                2 Physicians                                            2 Physicians
                        6.9%                           54.8%
                                3 or More                                               3 or More


                 Source: 2006 Practice Survey - Merritt, Hawkins & Associates
Average number of patient contact
hours per week by family physicians
                              (October 2006)

 60                                                52.6
 50                          41.8                         44.1
 40      34.6                       35.3
                29.3                                                  Male (N=958)
 30                                                                   Female (N=464)
       Av e rage numbe r Av e rage numbe r       Av e rage numbe r
           of patie nt    of hours spe nt in          of hours
       conta ct hour s in   dire ct patie nt     practice d during
      the office se tting care or patie nt-        most re ce nt
       pe r wee k by FPs re late d se rv ice    comple te we e k of
                           during the most       practice by FPs
                          re ce nt comple te
                          we e k of pr actice
                                by FPs

  Source: American Academy of Family Physicians, Practice Profile I Survey, October 2006

Average number of family physician visits per week and
average number of patients in various settings (October
           Patients with Free or
               Discounted Care

    Hospice Patients Supervised         2.3

          Nursing Home Patient

     Patients Supervised Under
              Home Health Care

                    House Calls        0.4

            Nursing Home Visits          2.8

                 Hospital Visits                 8.3

                   Office Visits                                                                             84.4

                                   0             10        20     30      40         50       60   70   80      90
                                                                    Average Visits Per Week

       Source: American Academy of Family Physicians, Practice Profile I Survey, October 2006
     How Are Family Physicians Paid?
         Six Models of Physician Compensation

Compensation                Pros                                     Cons
Equal sharing   ● simple to arrange             ● no incentive for productivity
                   administratively             ● penalizes high producers; allows low
                ● discourages overutilization      producers to “coast”

Productivity    ● encourages extra              ● feed intragroup competition
                   professional effort          ● requires substantial accounting
                ● complements capitalist           management
                   economic system              ● encourages overutilization
                                                ● discourages activities (such as teaching) not
                                                   directly related to patient visits
Salary          ● easy to administer            ● can disincentivize entrepreneurship
                                                ● can indebt corporation depending on

    How Are Family Physicians Paid?
       Six Models of Physician Compensation

Compensation                        Pros                                   Cons
Salary plus bonus   ● offers security                    ● may cause minimum work
                    ● allows physicians to increase         standards to become norms
                       income through performance        ● places large component of income
                                                            at risk and depending on subjective
Productivity plus   ● encourages efficiency              ● complicated to administer
                    ● recognizes different revenue       ● can create differential treatment
capitation mix
                       streams of a practice and rewards    levels based on patients’ payment
                       doctors as such                      stream

Capitation          ● encourages physicians to have an      ● may encourage underutilization
                       interest in appropriate, efficient   ● requires complex data tracking
                       provision of care

What Do Family Physicians
    Actually Make?

  And Which Family Physicians
        Make More?
                    Salary in Residency






          Community Based      Community Based         Community Based        Medical School Based
            Unaffiliated        Medical School          Medical School
                                  Affiliated             Administered

                   Average salaries offered (in dollars), 2002-2003

          Median and Mean 2005
        Income of Family Physicians
                              (Before Taxes)

• Data collected October 2006
• Presented by Demographic Categories
• Data includes Full-time and Part-time Physicians

Salary by Census Division (2005)

           Salary by Practice Type (2005)
              Solo   Two-Person   FP Group   Multispecialty
  Salary by Gender

$150,000                     Median

$140,000                     Mean

            Male    Female
    Salary by Practice Location (2005)
$150,000                                                           Median

$140,000                                                           Mean

              Urban                          Rural

Salary by Age of Physician (2005)
               Less than      36-45        46-55       56-65        66 or
                36 Years                                            more
       Yearly Salary by Different Practice
         Traits (2005 Physician Salary Survey Report)
$200,000                                                                Low, median and high represent the
                                                                        25th, 50th, and 75th percentiles.







           Copyright 2005 - Hospital & Healthcare Compensation Service and John R. Zabka Associates
     Distribution of
Family Physician Incomes
       (After Expenses)
   2002 AAFP demographic survey
  Comparison of National Annual Incomes of
             Family Practice vs.
              General Practice
                         2005 Physician Salary Survey Report
                                                                      Low, median and high represent the
$190,000                                                              25th, 50th, and 75th percentiles.
$150,000                                                                                       Family Practice

$140,000                                                                                       General Practice

                  Low               Median              Average               High

           Copyright 2005 - Hospital & Healthcare Compensation Service and John R. Zabka Associates
  Factors that Increase Earning in Family
  From a survey of 730 active AAFP members
  who had been out of residency five years or
  longer and worked at least 40 hours per week.
• High-earners: Those with 2003 pre-tax
  individual incomes of more than
  $160,000 after expenses
• Low-earners: Those with 2003 pre-tax
  individual incomes of less than $160,000
  after expenses                   
    Factors that have a Large
  Association with High Earning
             In order of significance
1) Providing more patient visits (high-earners saw a mean
   number of 122 patients per week; low-earners saw 84)
2) Practicing the full scope of family medicine in the hospital
3) Being in larger practices (which may be related to the next
   four factors)
4) Providing clinical lab, physical therapy, occupational therapy
   and imaging services in-house
5) Viewing negotiations with payers and evaluating contracts as
   very important
    Factors that have a Large
  Association with High Earning
      In order of significance (continued)
6) Participating in quality improvement, marketing, strategic
   planning and benchmarking

7) Having in-house billing and collections

8) Seeing more Medicare patients (nationally, may vary by state)

9) Working more hours

10) Being paid based on productivity

11) Planning to purchase an EHR
            Factors that Do Not Have a
           Significant Impact on Earning
                      In no particular order

• Current use of an EHR
• Number of staff meetings
• Practice management courses for physicians or staff
• Educational level of in-house billing staff
• Fee-for-service versus capitated revenue
• Percentage of co-payments collected at the time of service
• Aging of accounts receivable
  How does Compensation in
 Family Medicine compare to
other Primary Care Specialties?

    What is the current demand for
       Primary Care Doctors?
                           Comparison between
                            Different Specialties
                           All Physicians vs. Starting Physicians
                                    2006 AMGA Compensation Survey




$160,000.00                                                                   Family Medicine
$150,000.00                                                                   Family Medicine with OB
                                                                              Primary Medicine
                                                                              Internal Care Internal Medicine
                                                                              Pediatrics and Adolescent



                  All Physicians in Speciality          Starting

                  Comparison between
              Different Specialties (By Region)
                       2006 AMGA Compensation Survey



$170,000.00                                                                        Family Medicine

                                                                                   Family Medicine
$150,000.00                                                                        with OB
                                                                                   Primary Care
                                                                                   Internal Medicine
$140,000.00                                                                        Internal Medicine

$130,000.00                                                                        Pediatrics and


                 Eastern          Western         Southern         Northern

        Income Trends by Specialty - 2005
            Presented by Percentage of Physicians in
                       Income Brackets



14.0%                                                  Family
                                                       Internal Care
10.0%                                                   Internal



Current Demand for
 Family Physicians
               “MOST WANTED
               For the first time in six years,
               general internists and family
               physicians are at the top of
               the ‘in demand’ list for
               hospitals and medicals groups,
               according to a review of 2,840
               Merritt, Hawkins & Associates’
               listings. Here by year are the
               number of physician searches
               by specialty starting in 2002-
               03 and continuing through

                              AMA News
                                 June, 2006
                   Current Demand for
                    Family Physicians
“According to Merritt, Hawkins & Associates’ 2005 Survey of
Hospital Physician Recruiting Trends, more hospitals are actively
engaged in recruiting family physicians than any other type of

- Leslie Champlin – AAFP News Now (7/25/06)
         Future Earning
“It isn't unusual for students to hear that physicians working in
family medicine don’t make enough to pay off their loans.
However, the truth is that family physicians make enough money
to pay off student loans and have the lifestyle they want.”

“In the future, incomes for family physicians are projected to
increase as much as 25% in practices that use new technologies
and new care models, such as chronic disease management.”

     Debt Management – Publication of American Academy of Family Physicians, 2007

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