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Join us in this insightful episode as we delve into the 2024 MGMA DataDive, the gold standard for physician compensation data. Our guest, Jon Appino, the driving force behind Contract Diagnostics, will explore the latest trends in physician and APP compensation, the impact of inflation, specialty disparities, geographical variations, and the productivity paradox. We’ll also discuss the growing importance of quality measures in compensation, challenges faced by hospitals, and strategies for effective employment contract negotiations.
Jon Appino has been the driving force behind Contract Diagnostics since 2011, where he leads a dedicated team on a mission to empower physicians with the knowledge, tools, and confidence to negotiate robust employment contracts and secure the best compensation packages.
He discusses the KevinMD article, “2024 MGMA DataDive: Unveiling key trends in physician compensation.”
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Transcript
Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast. Today, we welcome back John Appino. He’s the CEO of Contract Diagnostics. Today’s KevinMD article is titled “The 2024 MGMA Data Dive: Unveiling Key Trends in Physician Compensation.” John, welcome back to the show.
John Appino: Thanks, man. It’s always good to be here.
Kevin Pho: So glad to have you back on the show.
John Appino: I feel like I should keep a note of which shirt I have on and what podcast I’ve been on so that I’m not repeating too many of the same shirts. Hopefully, I haven’t worn this one in a couple of shows. I appreciate you having me back.
Kevin Pho: So today, we’re going to talk about some of the key trends in physician compensation. Before we dive into that topic, just tell us—for those who aren’t familiar—what exactly is the MGMA Data Dive?
John Appino: Yeah, so as employers look at setting compensation, they typically look at benchmarks, and there are a couple of major surveys out there. On the surface, they might seem large. The MGMA—Medical Group Management Association—survey is the largest. This year’s survey, the 2024 one, included about 225,000 to 230,000 people.
Now, that’s a combination of advanced practice providers (APPs) and physicians. Out of 1.35 million providers in the country, it represents about a 15 percent participation rate. So while it may seem like the gold standard, it’s still capturing only 15 percent of the available providers out there. The participation rate obviously varies by specialty, region, and other factors.
The MGMA database allows physicians to log in and input data. Employers can also input data for their positions. They collect that data, scrub it, clean it up, and ensure it’s statistically significant. Then, they publish it once a year. It’s made available in many different formats, and the data is analyzed extensively by all kinds of organizations. It’s a fantastic resource, but it’s far from perfect, and it comes with a lot of asterisks, which we can discuss.
One thing I want everyone to understand is that we’re talking about 2024 data today. However, this data reflects what happened in 2023. MGMA collects data all throughout 2023, then spends months analyzing, cleaning, and clarifying it. They finally publish the report in April or May of the following year.
For example, the article we’re discussing today was written in June or July of 2024. The data it references pertains to compensation, RVU production, and quality contributions from 2023. This lag can create challenges in understanding current trends, but it’s critical for every physician and APP to know: the 2024 data reflects last year’s trends, not what’s happening right now.
Kevin Pho: How important is the MGMA data when it comes to addressing and negotiating physician compensation?
John Appino: I think it depends on who you ask. For employers, it’s a critical resource. If we talk to 100 employers at Contract Diagnostics, probably about 80 or 85 use MGMA data in some form or another. Some use it as-is, others blend it with other surveys, and some hire consultants to help determine fair market value for physicians based on various factors.
For physicians, having access to the data can be crucial during negotiations. For example, a hospital may offer a salary that’s at the median or 25th percentile but expect production at a higher percentile. Employers often present these benchmarks as transparent: “We start at MGMA median, and that number is X.”
If the physician doesn’t have access to the data, they have to take the employer’s word for it. But if they do have the data, they can challenge those figures and have a more informed discussion about what’s fair for their particular role.
Kevin Pho: How does MGMA data compare to other physician compensation surveys? Are their numbers aligned, or is there variation?
John Appino: They’re generally pretty similar. Some surveys focus more on hospital-based positions, others on larger group practices. For example, the AAMC survey focuses on academic positions, whereas MGMA includes an academic data set alongside private practice and hospital-employed data. Often, these surveys are blended together for benchmarking.
Kevin Pho: What are some of the key trends you’ve observed from the MGMA data this year?
John Appino: This year’s data reveals some misalignments. For example, dermatologists reported a 4 percent increase in work volume but a 14 to 16 percent increase in total compensation. On the flip side, specialties like interventional cardiology and emergency medicine reported significant increases in production—12 to 16 percent—but only saw 3 to 4 percent increases in compensation.
Overall, most physicians became more efficient, generating more collections and RVUs. However, how these increases translated into compensation varied significantly by specialty.
Kevin Pho: Do you have any hypotheses for these discrepancies?
John Appino: It depends on how the data is reported. For example, emergency medicine doesn’t account for hours worked. A young physician working twice as many shifts as a mid-career physician may skew the averages. Dermatology compensation may include clinical collections, cosmetic procedures, or product sales, which can complicate comparisons.
Coding changes, like CMS updates, also impact RVU values differently across specialties. While we have theories, no definitive conclusions explain these trends.
Kevin Pho: What about differences between surgical and non-surgical specialists?
John Appino: Primary care and surgical specialists had the largest year-over-year compensation increases, around 4.5 percent. Advanced practice practitioners (APPs)—nurse practitioners and physician assistants—saw the largest overall increase, at 6.47 percent.
Kevin Pho: Are hospital-employed physicians compensated differently than those in private practice?
John Appino: It depends on the specialty. For example, cardiologists have shifted overwhelmingly to hospital employment, and their compensation reflects that. Conversely, private practice tends to offer higher earnings in specialties like orthopedics, ophthalmology, and dermatology.
Kevin Pho: Are there any emerging trends in 2024 contracts that you’ve noticed, which might either continue these trends or signal the start of new ones?
John Appino: Yes, absolutely. There are a couple of things we’re seeing in 2024 contracts. First, student loan reimbursement is making a comeback, and it’s happening at a higher rate than we expected. Of course, that plays into total cash compensation, depending on the specialty.
We’re also seeing some changes in bonuses. Quality bonuses, which were reported in 2023 data, showed that 50 percent of physicians had access to them. I haven’t pulled the 2023 statistics for Contract Diagnostics yet, but I’ve looked at our 2024 data. Right now, only about 28 percent of physicians have access to some type of quality bonus.
I’m not sure if the 2023 MGMA data overstated the prevalence of these bonuses, or if this year’s decline reflects a larger trend, but it’s worth noting. On the other hand, we’re seeing more generous signing bonuses and relocation packages. Some of these relocation packages are even grossed-up, which is interesting.
We’re also seeing the same general trends with guaranteed salaries. Most contracts still offer one- or two-year guaranteed salaries. However, salaries themselves have remained pretty typical compared to last year. We’re not seeing major salary bumps in 2024 compared to 2023.
When the 2025 MGMA data comes out next April or May, I don’t think it will show as robust of an increase in compensation as we saw last year. That said, physicians are producing a tremendous number of RVUs and collections.
Kevin Pho: When it comes to contract negotiations, a physician’s focus often starts with compensation numbers. Beyond salary, what other factors should physicians consider during negotiations?
John Appino: That’s a great question. I think physicians should consider their long-term goals and the stability of the program they’re joining. For example, let’s say you’re a general surgeon. If your partners leave or retire, what happens to your call schedule?
Physicians need to ask, “If I’m obligated to do seven days of call per month as part of my base salary, and my colleagues leave, am I suddenly doing 15 days of call? If so, am I compensated for that additional work?”
This kind of long-term planning is essential. MGMA data can show you total cash compensation, but it doesn’t tell you whether a physician did 10 days of call and only got paid for three, or if they were fully compensated for all 12 days of call they worked.
Physicians should also look closely at time commitments, like clinic hours, administrative responsibilities, and expectations around teaching or research. Those factors can significantly impact job satisfaction and work-life balance.
Kevin Pho: We’re talking to John Appino. He’s the CEO of Contract Diagnostics. Today’s KevinMD article is titled “The 2024 MGMA Data Dive: Unveiling Key Trends in Physician Compensation.” John, as always, let’s wrap up with your take-home messages for the KevinMD audience.
John Appino: Of course. Here are a couple of take-home messages. First, geography matters. MGMA data varies significantly by state, region, and even local market. Physicians who are flexible about their location have an opportunity to drastically improve their financial outlook.
Second, understand the data your employer is using. Many employers say they use MGMA data, but it’s important to clarify which subset they’re referencing. MGMA has state-level data, regional data, and national data, as well as data specific to hospital-employed and private practice physicians.
For example, if I’m an interventional cardiologist practicing in St. Louis, and my employer says, “We use MGMA data,” it’s critical to ask: “Are you using the state-level data, the regional data, or the national data? Are you using the hospital-based data, or the all-practices data?”
These distinctions matter because the numbers can vary widely. Employers might leverage the data to their advantage, so it’s important for physicians to clarify and ensure they’re negotiating from a fully informed position.
Kevin Pho: John, thank you so much for sharing your insights and perspective on physician compensation. As always, it’s a pleasure having you on the show.
John Appino: Anytime, man. I appreciate it.
