Physician earnings in a changing managed care environment

• Published in: Health affairs (Millwood, Va.) Vol. 15; no. 3; pp. 124 - 133
• Main Authors: Simon, C J, Born, P H
• Format: Journal Article
• Language: English
• Published: United States The People to People Health Foundation, Inc., Project HOPE 1996
• Subjects: Annual reports; Compensation; Competition; Contract Services - economics; Earnings; Earnings trends; Economics, Medical; Effects; Expectations; Family Practice - economics; Fees & charges; Forecasting; Health; Health care policy; Health insurance; Health maintenance organizations; HMOs; Hospitals; Humans; Income; Inflation; Managed care; Managed Care Programs; Managed competition; Market shares; Medical economics; Medical personnel; Medical profession; Medical sector; Medicare; Medicine; Pediatricians; Physicians; Practice Patterns, Physicians; Primary care; Profits; Reforms; Salaries, fees, etc; Services; Specialists; Specialization; Statistical analysis; Statistics; Studies; Surgeons; Trends; United States; Wages & salaries; United States; United States > US; Chicago Illinois
• ISSN: 0278-2715; 1544-5208
• DOI: 10.1377/hlthaff.15.3.124

From 1982 - 1994, median physician income rose at an average of 5.9% in nominal terms, and 2.1% in inflation-adjusted dollars. The year 1994 marks the first time nominal earnings went down. This decline comes at a time when the market for physician services is in flux because of the growth of managed care. By 1995 more than 83% of all patient care physicians had at least one managed care contract, up from 61% in 1990 and 43% in 1986. A key driver of managed care is cost containment; evidence suggests that managed care has cut reimbursements and restricted access to physician services. The 1994 physician income numbers, however, may be the first evidence that managed care has had a widespread effect on physicians' earnings in particular and on health spending in general.