Sources of U.S. physician income: the contribution of government payments to the specialist-generalist income gap

Abstract

Background: Physician income varies threefold among specialties. Lower incomes have produced shortages in primary care fields.

Objective: To investigate the impact of government policy on generating income differentials among specialties.

Design and participants: Cross-sectional analysis of the 2004 MEPS.

Measurements: For outpatient care, total payments made to 27 different types of specialists from five types of payers: Medicare, Medicaid, other government (the Veterans Administration and other state and local programs), private insurance, and out-of-pocket payments. For inpatient care, aggregate (i.e., all-specialty) inpatient physician reimbursement from the five payers.

Results: In 2004, physicians derived 78.6% of their practice income ($149,684 million, 95% CI, $140,784 million-$158,584 million) from outpatient sources and 21.4% of their income ($40,782 million, 95% CI, $36,839 million-$44,724 million) from inpatient sources. Government payers accounted for 32.7% of total physician income. Four specialties derived > 50% of their outpatient income from public sources, including both the lowest and highest paid specialties (geriatrics and hematology/oncology, respectively).

Conclusions: Inter-specialty income differences result, in part, from government decisions.

Figure 1

Mean 2004 physician net income, by specialty. Box identifyingthe line bars: Mean Physician Income from Inpatient and Outpatient Sources.

Figure 2

Share of physician’s outpatient revenues from various payers, by physician specialty, 2004. Box identifying the line bars: Medicaid, Medicare, Other Government, Private Insurance, Out-of-Pocket.

Figure 3

Outpatient visits to specialists according to insurance type. Box identifying the line bars: Medicaid only, Medicare only, Medicare + Medicaid, Other Government, Medicare + Private, Private only, Out-of-Pocket only.