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Why Compensation for Some Medical Specialties is in Decline

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    For the most part, physicians and other high-level clinicians in primary and specialty care are seeing robust compensation increases, according to Merritt Hawkins. Medical doctors in the Midwest, in particular, enjoy among the highest annual average wages.

    Nationally, however, physicians in certain specialties are seeing drops in compensation. What's going on?

    HealthLeaders Media spoke with Travis Singleton, senior vice president at the Dallas-based physician recruiting firm about the market forces at play. The following is a lightly edited transcript.

    Q: According to your report, compensation for radiology, dermatology, non-invasive cardiology and anesthesiology has declined in the past two years. What's going on?

    A: The most interesting is the radiology front. You have two worlds there: The traditional man-on-site radiologist working in the hospital basement. And then you have a quickly emerging teleradiology, the fastest growing portion of telehealth.

    This is the first year that we have seen the telehealth compensation average beat the traditional compensation average. That goes against a lot of logic that we used to use. The thought was that with telerad there are better economies of scale, you would work anywhere, literally in your living room, and that the cost to get that employee would be less than recruiting someone to work in the middle of nowhere.

    Over the past two to three years, however, the competitive market in telerad has gone bananas.

    We see fewer stand-alone hospitals that want a person on staff for a hundred different reasons; quality, calls, scheduling, you name it. Then, we had a huge boom with independent stand-alone imaging centers and they all needed a staff radiologist.

    We are starting to see fewer of those imaging centers and those that are still there are affiliated or acquired or somehow partnered with a hospital or health system. So, you have more of these entities of every different delivery system type moving to telerad.

    Q: Does this compensation swing suggest that telerad has "arrived?"

    A: The traditionalists really fought what telerad could be. "Can they verify the quality? Did you have the results you needed? Is there a comfort level, whether it's a small remote hospital or large entities?" A lot of those fears have gone away.

    The requirements to be a teleradiologist have risen dramatically. We staff the largest telerad companies out there and it is difficult to recruit. We are seeing the radiology market move before our eyes, and the compensation mirrors it.


    Q: Why is dermatology compensation falling?

    A: The most overlooked part of dermatology is the grunt work. It's been a demand that's been glossed over by the glamorous cosmetic side of dermatology. When you're a dermatologist, you want to work in the cosmetic environment, doing elective, better-paying procedures.

    For the past few years that was what the market needed. Now, the rashes, the burn calls, the boils, the lesser, non-glamorous part of dermatology is what our clients are clamoring for.

    Most of what we are staffing is a reflection of that market. It doesn't pay as well. It's not as much fun. Typically, the quality of life is worse. It's got a lot of strikes against it. But, if you want to look at the open market, that's what we need in dermatology.

    Unfortunately, you've got three or four of the past training classes in dermatology that don't want to do anything but elective or glamorous dermatology and who have not had to do anything else.

    That wasn't the case 10 or 15 years ago. You had to do the grunt work to earn the elective-type practice you wanted. Or, you had to have a percentage of your practice that was devoted to that grunt work, or you had to do calls for burn unit. Now we are in this position where there is no money in it.

    Q: Are CRNAs playing a role in the compensation decline for anesthesiologists?

    A: Yup. A lot of the recruiting work we are doing are with mega-groups. We saw this in the hospital-based specialties where you have these huge single-specialty groups. Most of them have moved to a more aggressive form of MD oversight, depending upon state regulations.

    Where maybe it was 40% or 50% that were staffed by CRNAs, now it's 70% to 80%, and you don't need the MDs.

    Q: Non-invasive cardiology compensation has taken a big hit. Why?

    A: For all the headlines and rhetoric around value, for all these changes in regulations around stents and heart surgery, there is no purer way to look at how our reimbursements work than cardiology.

    We favor procedures and punish diagnostics. It's no-better illustrated than this year when you see the non-invasive, diagnostic cardiology suppressed while the procedural-based has gone up.

    That trend has been put on steroids with this do-more-with-less environment, especially with heart centers, which became a bloated machine in the past decade. Then, the feds changed the regulations and the centers had to sell out to hospitals, which are trimming the fat.

    Now, they still need an invasive cardiologist, obviously, but they may ask him to do a larger portion of non-invasive, diagnostics than in the past.

    It's a lessening of the role for the non-invasive cardiologist. It's nothing so drastic that they will be out of a job in two or three years, but when you look at the real-life competitive recruiting environment, you see it with the compensation.

    Q: Is there a common thread that explains the drop in compensation for these specialties?

    A: I would be remiss if I didn't talk about telehealth emergence, even though it's felt more in some specialties than in others. That continues to be a disrupter in the market and will only become more pervasive and with other specialties as we go on.

    But more than that, all of these are a reflection on how we pay doctors. We see dermatologists gravitating to elective because the payer mix is better. You see non-invasive cardiologists make less, and even radiologists.

    It's an easier quality of life and I get paid better in telerad and I can work out of my house. All of this is a reflection of our reimbursement system. We can debate healthcare all we want, but until that changes many of these compensation trends aren't likely to change.

    Q: Do you see these compensation trends reversing anytime soon?

    A: It would defy logic to say they will. There is no new money in healthcare. In fact, there is less money in healthcare. We are just moving it around to different parts in the system.

    It would require a major regulatory change, and even when you look at the ACA or the pending revisions in Congress, none of them are changing the reimbursement system to that level.

    The reality is, until we throw our system on its head and say we are going to reward preventative and diagnostic medicine greater or at least equal to how we reward procedures, I don't see how you are going to see a wildly different market than what we are looking at.

    This report is brought to you by HealthLeaders Media.

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