Physician Earnings in A Changing Managed Care Environment

Health Affairs

Volumn 15, Issue 3, 1996, Pages 124-133

  Simon, Carol J ^a   Born, Patricia H ^b  

^a UNIVERSITY OF ILLINOIS AT CHICAGO   (United States)

^b AMERICAN MEDICAL ASSOCIATION   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; CLINICAL PRACTICE; ECONOMICS; FINANCIAL MANAGEMENT; GENERAL PRACTICE; HEALTH INSURANCE; HUMAN; INCOME; MEDICINE; PHYSICIAN; UNITED STATES;

CONTRACT SERVICES; FAMILY PRACTICE; HUMANS; INCOME; MANAGED CARE PROGRAMS; PHYSICIAN'S PRACTICE PATTERNS; PHYSICIANS; SPECIALTIES, MEDICAL; UNITED STATES;

EID: 1542639416     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.15.3.124     Document Type: Article

References (34)

1. American Medical Association, Physician Market-place Statistics, 1995, ed. M. Gonzalez (Chicago: AMA, 1996); and J. Moser, "Physician Earnings Trends," in Socioeconomic Characteristics of Medical Practice, 1995, ed. M. Gonzalez (Chicago: AMA, 1995), 23-29.
2. American Medical Association, Physician Market-place Statistics, 1995, ed. M. Gonzalez (Chicago: AMA, 1996); and J. Moser, "Physician Earnings Trends," in Socioeconomic Characteristics of Medical Practice, 1995, ed. M. Gonzalez (Chicago: AMA, 1995), 23-29.
3. D. Emmons and C. Simon, "Managed Care: Participation, Revenues, and Risk," in Socioeconomic Characteristics of Medical Practice, 1995, 3-10; and D. Emmons and C. Simon, "Managed Care: Evolving Contracting Patterns," in Socioeconomic Characteristics of Medical Practice, 1996, ed. M. Gonzalez (Chicago: AMA, 1996), 15-25.
4. D. Emmons and C. Simon, "Managed Care: Participation, Revenues, and Risk," in Socioeconomic Characteristics of Medical Practice, 1995, 3-10; and D. Emmons and C. Simon, "Managed Care: Evolving Contracting Patterns," in Socioeconomic Characteristics of Medical Practice, 1996, ed. M. Gonzalez (Chicago: AMA, 1996), 15-25.
5. T.H. Dial et al., "Clinical Staffing in Staff- and Group-Model HMOs," Health Affairs (Summer 1995): 168-180; W. Morgan, "HMO Trend Squeezes Big-Fee Medical Specialists," The Washington Post, 17 August 1994, Al6; E. Rosenthal, "Young Doctors Find That Jobs in Specialties Are Harder to Get," The New York Times, 16 April 1995, Al; S. Gamliel et al., "Managed Care on the March: Will Physicians Meet the Challenge?" Health Affairs (Summer 1995): 131-142; Congressional Budget Office, The Effects of Managed Care and Managed Competition, CBO Memorandum (Washington: CBO, February 1995); H. Luft, Health Maintenance Organizations: Dimensions of Performance (New York: John Wiley & Sons, 1991); L. Baker, "Do HMOs Lower Fee-for-Service Physician Fees? Evidence Based on County-Level Estimates of HMO Market Share" (Working paper, Princeton University and The Robert Wood Johnson Foundation, 1994); W. Manning et al., "A Controlled Trial of the Effect of a Prepaid Group Practice on Use of Services," The New England Journal of Medicine 310, no. 23 (1984): 1505-1510; J. Weiner, "Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirement: Evidence from HMO Staffing Patterns," Journal of the American Medical Association (20 July 1994): 222-230; and R. Miller and H. Luft, "Managed Care Plan Performance since 1980: A Literature Analysis," Journal of the American Medical Association (18 May 1994): 1512-1519.
6. T.H. Dial et al., "Clinical Staffing in Staff- and Group-Model HMOs," Health Affairs (Summer 1995): 168-180; W. Morgan, "HMO Trend Squeezes Big-Fee Medical Specialists," The Washington Post, 17 August 1994, Al6; E. Rosenthal, "Young Doctors Find That Jobs in Specialties Are Harder to Get," The New York Times, 16 April 1995, Al; S. Gamliel et al., "Managed Care on the March: Will Physicians Meet the Challenge?" Health Affairs (Summer 1995): 131-142; Congressional Budget Office, The Effects of Managed Care and Managed Competition, CBO Memorandum (Washington: CBO, February 1995); H. Luft, Health Maintenance Organizations: Dimensions of Performance (New York: John Wiley & Sons, 1991); L. Baker, "Do HMOs Lower Fee-for-Service Physician Fees? Evidence Based on County-Level Estimates of HMO Market Share" (Working paper, Princeton University and The Robert Wood Johnson Foundation, 1994); W. Manning et al., "A Controlled Trial of the Effect of a Prepaid Group Practice on Use of Services," The New England Journal of Medicine 310, no. 23 (1984): 1505-1510; J. Weiner, "Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirement: Evidence from HMO Staffing Patterns," Journal of the American Medical Association (20 July 1994): 222-230; and R. Miller and H. Luft, "Managed Care Plan Performance since 1980: A Literature Analysis," Journal of the American Medical Association (18 May 1994): 1512-1519.
7. T.H. Dial et al., "Clinical Staffing in Staff- and Group-Model HMOs," Health Affairs (Summer 1995): 168-180; W. Morgan, "HMO Trend Squeezes Big-Fee Medical Specialists," The Washington Post, 17 August 1994, Al6; E. Rosenthal, "Young Doctors Find That Jobs in Specialties Are Harder to Get," The New York Times, 16 April 1995, Al; S. Gamliel et al., "Managed Care on the March: Will Physicians Meet the Challenge?" Health Affairs (Summer 1995): 131-142; Congressional Budget Office, The Effects of Managed Care and Managed Competition, CBO Memorandum (Washington: CBO, February 1995); H. Luft, Health Maintenance Organizations: Dimensions of Performance (New York: John Wiley & Sons, 1991); L. Baker, "Do HMOs Lower Fee-for-Service Physician Fees? Evidence Based on County-Level Estimates of HMO Market Share" (Working paper, Princeton University and The Robert Wood Johnson Foundation, 1994); W. Manning et al., "A Controlled Trial of the Effect of a Prepaid Group Practice on Use of Services," The New England Journal of Medicine 310, no. 23 (1984): 1505-1510; J. Weiner, "Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirement: Evidence from HMO Staffing Patterns," Journal of the American Medical Association (20 July 1994): 222-230; and R. Miller and H. Luft, "Managed Care Plan Performance since 1980: A Literature Analysis," Journal of the American Medical Association (18 May 1994): 1512-1519.
8. T.H. Dial et al., "Clinical Staffing in Staff- and Group-Model HMOs," Health Affairs (Summer 1995): 168-180; W. Morgan, "HMO Trend Squeezes Big-Fee Medical Specialists," The Washington Post, 17 August 1994, Al6; E. Rosenthal, "Young Doctors Find That Jobs in Specialties Are Harder to Get," The New York Times, 16 April 1995, Al; S. Gamliel et al., "Managed Care on the March: Will Physicians Meet the Challenge?" Health Affairs (Summer 1995): 131-142; Congressional Budget Office, The Effects of Managed Care and Managed Competition, CBO Memorandum (Washington: CBO, February 1995); H. Luft, Health Maintenance Organizations: Dimensions of Performance (New York: John Wiley & Sons, 1991); L. Baker, "Do HMOs Lower Fee-for-Service Physician Fees? Evidence Based on County-Level Estimates of HMO Market Share" (Working paper, Princeton University and The Robert Wood Johnson Foundation, 1994); W. Manning et al., "A Controlled Trial of the Effect of a Prepaid Group Practice on Use of Services," The New England Journal of Medicine 310, no. 23 (1984): 1505-1510; J. Weiner, "Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirement: Evidence from HMO Staffing Patterns," Journal of the American Medical Association (20 July 1994): 222-230; and R. Miller and H. Luft, "Managed Care Plan Performance since 1980: A Literature Analysis," Journal of the American Medical Association (18 May 1994): 1512-1519.
9. T.H. Dial et al., "Clinical Staffing in Staff- and Group-Model HMOs," Health Affairs (Summer 1995): 168-180; W. Morgan, "HMO Trend Squeezes Big-Fee Medical Specialists," The Washington Post, 17 August 1994, Al6; E. Rosenthal, "Young Doctors Find That Jobs in Specialties Are Harder to Get," The New York Times, 16 April 1995, Al; S. Gamliel et al., "Managed Care on the March: Will Physicians Meet the Challenge?" Health Affairs (Summer 1995): 131-142; Congressional Budget Office, The Effects of Managed Care and Managed Competition, CBO Memorandum (Washington: CBO, February 1995); H. Luft, Health Maintenance Organizations: Dimensions of Performance (New York: John Wiley & Sons, 1991); L. Baker, "Do HMOs Lower Fee-for-Service Physician Fees? Evidence Based on County-Level Estimates of HMO Market Share" (Working paper, Princeton University and The Robert Wood Johnson Foundation, 1994); W. Manning et al., "A Controlled Trial of the Effect of a Prepaid Group Practice on Use of Services," The New England Journal of Medicine 310, no. 23 (1984): 1505-1510; J. Weiner, "Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirement: Evidence from HMO Staffing Patterns," Journal of the American Medical Association (20 July 1994): 222-230; and R. Miller and H. Luft, "Managed Care Plan Performance since 1980: A Literature Analysis," Journal of the American Medical Association (18 May 1994): 1512-1519.
10. T.H. Dial et al., "Clinical Staffing in Staff- and Group-Model HMOs," Health Affairs (Summer 1995): 168-180; W. Morgan, "HMO Trend Squeezes Big-Fee Medical Specialists," The Washington Post, 17 August 1994, Al6; E. Rosenthal, "Young Doctors Find That Jobs in Specialties Are Harder to Get," The New York Times, 16 April 1995, Al; S. Gamliel et al., "Managed Care on the March: Will Physicians Meet the Challenge?" Health Affairs (Summer 1995): 131-142; Congressional Budget Office, The Effects of Managed Care and Managed Competition, CBO Memorandum (Washington: CBO, February 1995); H. Luft, Health Maintenance Organizations: Dimensions of Performance (New York: John Wiley & Sons, 1991); L. Baker, "Do HMOs Lower Fee-for-Service Physician Fees? Evidence Based on County-Level Estimates of HMO Market Share" (Working paper, Princeton University and The Robert Wood Johnson Foundation, 1994); W. Manning et al., "A Controlled Trial of the Effect of a Prepaid Group Practice on Use of Services," The New England Journal of Medicine 310, no. 23 (1984): 1505-1510; J. Weiner, "Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirement: Evidence from HMO Staffing Patterns," Journal of the American Medical Association (20 July 1994): 222-230; and R. Miller and H. Luft, "Managed Care Plan Performance since 1980: A Literature Analysis," Journal of the American Medical Association (18 May 1994): 1512-1519.
11. T.H. Dial et al., "Clinical Staffing in Staff- and Group-Model HMOs," Health Affairs (Summer 1995): 168-180; W. Morgan, "HMO Trend Squeezes Big-Fee Medical Specialists," The Washington Post, 17 August 1994, Al6; E. Rosenthal, "Young Doctors Find That Jobs in Specialties Are Harder to Get," The New York Times, 16 April 1995, Al; S. Gamliel et al., "Managed Care on the March: Will Physicians Meet the Challenge?" Health Affairs (Summer 1995): 131-142; Congressional Budget Office, The Effects of Managed Care and Managed Competition, CBO Memorandum (Washington: CBO, February 1995); H. Luft, Health Maintenance Organizations: Dimensions of Performance (New York: John Wiley & Sons, 1991); L. Baker, "Do HMOs Lower Fee-for-Service Physician Fees? Evidence Based on County-Level Estimates of HMO Market Share" (Working paper, Princeton University and The Robert Wood Johnson Foundation, 1994); W. Manning et al., "A Controlled Trial of the Effect of a Prepaid Group Practice on Use of Services," The New England Journal of Medicine 310, no. 23 (1984): 1505-1510; J. Weiner, "Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirement: Evidence from HMO Staffing Patterns," Journal of the American Medical Association (20 July 1994): 222-230; and R. Miller and H. Luft, "Managed Care Plan Performance since 1980: A Literature Analysis," Journal of the American Medical Association (18 May 1994): 1512-1519.
12. T.H. Dial et al., "Clinical Staffing in Staff- and Group-Model HMOs," Health Affairs (Summer 1995): 168-180; W. Morgan, "HMO Trend Squeezes Big-Fee Medical Specialists," The Washington Post, 17 August 1994, Al6; E. Rosenthal, "Young Doctors Find That Jobs in Specialties Are Harder to Get," The New York Times, 16 April 1995, Al; S. Gamliel et al., "Managed Care on the March: Will Physicians Meet the Challenge?" Health Affairs (Summer 1995): 131-142; Congressional Budget Office, The Effects of Managed Care and Managed Competition, CBO Memorandum (Washington: CBO, February 1995); H. Luft, Health Maintenance Organizations: Dimensions of Performance (New York: John Wiley & Sons, 1991); L. Baker, "Do HMOs Lower Fee-for-Service Physician Fees? Evidence Based on County-Level Estimates of HMO Market Share" (Working paper, Princeton University and The Robert Wood Johnson Foundation, 1994); W. Manning et al., "A Controlled Trial of the Effect of a Prepaid Group Practice on Use of Services," The New England Journal of Medicine 310, no. 23 (1984): 1505-1510; J. Weiner, "Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirement: Evidence from HMO Staffing Patterns," Journal of the American Medical Association (20 July 1994): 222-230; and R. Miller and H. Luft, "Managed Care Plan Performance since 1980: A Literature Analysis," Journal of the American Medical Association (18 May 1994): 1512-1519.
13. T.H. Dial et al., "Clinical Staffing in Staff- and Group-Model HMOs," Health Affairs (Summer 1995): 168-180; W. Morgan, "HMO Trend Squeezes Big-Fee Medical Specialists," The Washington Post, 17 August 1994, Al6; E. Rosenthal, "Young Doctors Find That Jobs in Specialties Are Harder to Get," The New York Times, 16 April 1995, Al; S. Gamliel et al., "Managed Care on the March: Will Physicians Meet the Challenge?" Health Affairs (Summer 1995): 131-142; Congressional Budget Office, The Effects of Managed Care and Managed Competition, CBO Memorandum (Washington: CBO, February 1995); H. Luft, Health Maintenance Organizations: Dimensions of Performance (New York: John Wiley & Sons, 1991); L. Baker, "Do HMOs Lower Fee-for-Service Physician Fees? Evidence Based on County-Level Estimates of HMO Market Share" (Working paper, Princeton University and The Robert Wood Johnson Foundation, 1994); W. Manning et al., "A Controlled Trial of the Effect of a Prepaid Group Practice on Use of Services," The New England Journal of Medicine 310, no. 23 (1984): 1505-1510; J. Weiner, "Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirement: Evidence from HMO Staffing Patterns," Journal of the American Medical Association (20 July 1994): 222-230; and R. Miller and H. Luft, "Managed Care Plan Performance since 1980: A Literature Analysis," Journal of the American Medical Association (18 May 1994): 1512-1519.
14. T.H. Dial et al., "Clinical Staffing in Staff- and Group-Model HMOs," Health Affairs (Summer 1995): 168-180; W. Morgan, "HMO Trend Squeezes Big-Fee Medical Specialists," The Washington Post, 17 August 1994, Al6; E. Rosenthal, "Young Doctors Find That Jobs in Specialties Are Harder to Get," The New York Times, 16 April 1995, Al; S. Gamliel et al., "Managed Care on the March: Will Physicians Meet the Challenge?" Health Affairs (Summer 1995): 131-142; Congressional Budget Office, The Effects of Managed Care and Managed Competition, CBO Memorandum (Washington: CBO, February 1995); H. Luft, Health Maintenance Organizations: Dimensions of Performance (New York: John Wiley & Sons, 1991); L. Baker, "Do HMOs Lower Fee-for-Service Physician Fees? Evidence Based on County-Level Estimates of HMO Market Share" (Working paper, Princeton University and The Robert Wood Johnson Foundation, 1994); W. Manning et al., "A Controlled Trial of the Effect of a Prepaid Group Practice on Use of Services," The New England Journal of Medicine 310, no. 23 (1984): 1505-1510; J. Weiner, "Forecasting the Effects of Health Reform on U.S. Physician Workforce Requirement: Evidence from HMO Staffing Patterns," Journal of the American Medical Association (20 July 1994): 222-230; and R. Miller and H. Luft, "Managed Care Plan Performance since 1980: A Literature Analysis," Journal of the American Medical Association (18 May 1994): 1512-1519.
15. Although we present descriptive, univariate analyses of factors that affect the distribution of physician income, our conclusions are generally robust in a multivariate framework; that is, managed care penetration, physician specialty, practice size, and ownership status are statistically significant in regression analyses.
16. Primary care physicians include general/family practitioners, general internists, and pediatricians. Subspecialists include internal medicine subspecialists, surgical subspecialists, and pediatric Subspecialists. Hospital-based specialists include radiologists, anesthesiologists, pathologists, and emergency medicine physicians. Other physicians include obstetricians/gynecologists (OB/GYNs), general surgeons, psychiatrists, and "other," not elsewhere classified. OB/GYNs perform a mix of primary care and specialty services, as do many general surgeons. The AMA recognizes OB/GYNs as primary care physicians. We do not include OB/GYNs in the primary care group for empirical reasons. OB/GYNs' incomes are higher than those of other primary care specialists and do not tend to follow similar trends.
17. P. Franks, C. Clancy, and P. Nutting, "Gatekeeping Revisited - Protecting Patients from Over-treatment," The New England Journal of Medicine 327, no. 6 (1992): 369-372; and S. Flint, "The Outlook for Pediatrician Incomes under Managed Care," Pediatrics 96, no. 4 (Supplement, October 1995): 829-831.
18. P. Franks, C. Clancy, and P. Nutting, "Gatekeeping Revisited - Protecting Patients from Over-treatment," The New England Journal of Medicine 327, no. 6 (1992): 369-372; and S. Flint, "The Outlook for Pediatrician Incomes under Managed Care," Pediatrics 96, no. 4 (Supplement, October 1995): 829-831.
19. D. Goldman, "Managed Care as a Public Cost-Containment Mechanism," RAND Journal of Economics 26, no. 2 (1995): 277-295; and Miller and Luft, "Managed Care Plan Performance."
20. D. Goldman, "Managed Care as a Public Cost-Containment Mechanism," RAND Journal of Economics 26, no. 2 (1995): 277-295; and Miller and Luft, "Managed Care Plan Performance."
21. Emmons and Simon, "Managed Care: Participation, Revenues, and Risk;" and Emmons and Simon, "Managed Care: Evolving Contracting Patterns."
22. R. Kronick et al., "The Marketplace in Health Care Reform: The Demographic Limitations of Managed Competition," The New England Journal of Medicine 328, no. 2 (1993): 148-152.
23. There are a number of ways to measure managed care penetration. Patient enrollment numbers are available only for HMOs, which constitute only part of the managed care marketplace. Our measure is derived from the SMS survey and captures the value of physician services delivered under all organizational forms that involve selective contracting. Our measure does not include services rendered for plans that manage care only through utilization review.
24. R. Hirth and M. Chernew, "Physician Workforce Policy in a Managed Care-Dominated Environment: How Much Can We Rely on the Market?" (Working paper, University of Michigan, Ann Arbor, Michigan, 1995).
25. Physician Payment Review Commission, "Physician Payment under the Medicare Fee Schedule," in Annual Report to Congress, 1995 (Washington: PPRC, 1995), 29-55.
26. P. Kletke, D. Emmons, and K. Gillis, "From Owners to Employees: Current Trends in Physicians' Practice Arrangements" (Working paper, AMA, Chicago, Illinois, March 1996).
27. Ibid.
28. D.C. Colby, "Impact of the Medicare Physician Fee Schedule," Health Affairs (Fall 1992): 216-226; and PPRC, "Medicare Fee-for-Service Physician Payment," in Annual Report to Congress, 1996 (Washington: PPRC, 1996), 151-177.
29. D.C. Colby, "Impact of the Medicare Physician Fee Schedule," Health Affairs (Fall 1992): 216-226; and PPRC, "Medicare Fee-for-Service Physician Payment," in Annual Report to Congress, 1996 (Washington: PPRC, 1996), 151-177.
30. PPRC, "Ensuring Fair and Accurate Payment under the Medicare Fee Schedule," in Annual Report to Congress, 1994 (Washington: PPRC, 1994), 385-408.
31. PPRC, "Medicare Fee-for-Service Physician Payment."
32. N. McKay, "The Economic Determinants of Specialty Choice by Medical Residents," Journal of Health Economics 9 (1990): 335-357; and C. Simon, D. Dranove, and W White, "Evidence on the Impact of Managed Care on the Physician Market Place: Incomes, Location, and Specialty Choice" (Working paper, Institute of Government and Public Affairs, University of Illinois, Chicago, February 1996).
33. N. McKay, "The Economic Determinants of Specialty Choice by Medical Residents," Journal of Health Economics 9 (1990): 335-357; and C. Simon, D. Dranove, and W White, "Evidence on the Impact of Managed Care on the Physician Market Place: Incomes, Location, and Specialty Choice" (Working paper, Institute of Government and Public Affairs, University of Illinois, Chicago, February 1996).
34. National Resident Matching Program, 1996.