Physician-generated revenue fluctuates as reimbursement levels change, physician shortages impact provider market share and case volume shifts based on economic factors and procedural trends. Here are several trends in physician-generated revenue from 2002-2010, based on data and conclusions from Merritt Hawkins' 2010 Physician Inpatient/Outpatient Revenue Survey.
Editor's note: In this survey, hospital CFOS were asked to indicate the combined net inpatient and outpatient revenue generated annually for their facilities by a single, full-time equivalent physician in a variety of specialties through procedures performed through the hospital, tests and treatments ordered, etc. In the case of primary care physicians, survey respondents were asked to determine revenue from direct admissions, procedures performed and lab tests — not indirect revenue primary care physicians may have generated from patient referrals to specialists utilizing the hospital.
Trends in physician-generated revenue
Net annual income generated by physicians has fluctuated over the past eight years, with average 2010 annual net revenue generated by all 17 reported specialties sitting at $1,543,788 in 2010. This represents a small increase of 3 percent over average annual net revenue generated by all specialties in 2007 ($1,496,432), a decline of 19 percent from the average annual net revenue generated by all specialties in 2004 ($1,855,773) and a relatively similar number to the average annual net revenue generated by all specialties in 2002 ($1,540,181). Approximately $1.5 million has proven to be a benchmark number for revenue generated by all physician specialties over the last eight years, according to Merritt Hawkins, as three of the four surveyed years produced an average total revenue close to $1.5 million.
Despite the recession, the Merritt Hawkins survey found that average net revenue increased in 2010 over 2007 — an interesting finding considering that CFOs participating in the 2010 survey were asked to provide revenue numbers generated by physicians during a period of severe economic recession. While the recession did not appear to take a toll on generated revenue overall, the survey concluded that for some specialties — for example, internal medicine — the recession had an effect. It is possible that general internists, who generally treat a patient population with a high percentage of indigent, geriatric and other poor-paying patients, saw less revenue during the recession as internists were unable to make up for poor payor mix by providing extra services.
While revenue generated by some specialists decreased in 2010, other specialists saw an increase. For example, pediatricians experienced a revenue increase, a trend that Merritt Hawkins attributed to the expansion of health insurance for children. General surgeons also saw an increase in 2010, perhaps due to the growing shortage of general surgeons. As fewer medical students choose to pursue general surgery, per-physician caseloads could be increasing and driving up per-physician generated revenue, according to the report.
The survey also concluded that the increase in generated revenue could reflect the strengthening bond between physicians and their affiliated hospitals. As more physicians seek hospital employment, physicians may be driving more patients and more work to the hospital rather than to other facilities, such as physician-owned ambulatory surgery centers.
Statistics on physician-generated revenue and compensation
The following data demonstrates trends in physician-generated revenue over the last eight years, as well as the level of compensation physicians receive in comparison to the revenue they generate. Compensation data comes from Merritt Hawkins' 2009 Review of Physician Recruiting Incentives.
Neurosurgery
Average 2010 revenue: $2,815,650
Average 2007 revenue: $2,100,000
Average 2004 revenue: $2,406,275
Average 2002 revenue: $2,364,864
Average salary: $571,000
Invasive cardiology
Average 2010 revenue: $2,240,366
Average 2007 revenue: $2,662,600
Average 2004 revenue: $2,490,748
Average 2002 revenue: n/a
Average salary: $475,000
Orthopedic surgery
Average 2010 revenue: $2,117,764
Average 2007 revenue: $2,312,168
Average 2004 revenue: $2,992,022
Average 2002 revenue: $1,855,944
Average salary: $481,000
General surgery
Average 2010 revenue: $2,112,492
Average 2007 revenue: $1,947,934
Average 2004 revenue: $2,446,987
Average 2002 revenue: $1,835,470
Average salary: $321,000
Internal medicine
Average 2010 revenue: $1,678,341
Average 2007 revenue: $1,987,253
Average 2004 revenue: $2,100,124
Average 2002 revenue: $1,569,000
Average salary: $186,000
Family practice
Average 2010 revenue: $1,622,832
Average 2007 revenue: $1,615,828
Average 2004 revenue: $2,000,329
Average 2002 revenue: $1,559,482
Average salary: $173,000
Gastroenterology
Average 2010 revenue: $1,450,540
Average 2007 revenue: $1,335,133
Average 2004 revenue: $1,735,338
Average 2002 revenue: $1,246,428
Average salary: $393,000
Non-invasive cardiology
Average 2010 revenue: $1,319,658
Average 2007 revenue: $2,240,786
Average 2004 revenue: $2,646,039
Average 2002 revenue: n/a
Average salary: $419,000
Learn more about Merritt Hawkins.
Related Articles on Hospital Revenue:
Wyoming's Ivinson Memorial Posts $7.1M Gross Revenue, Surprising Financial Officers
UCLA Health System CEO David Feinberg: Prioritizing Patients Drives System's Success
Lancaster General Hospital's Surplus Wanes
Editor's note: In this survey, hospital CFOS were asked to indicate the combined net inpatient and outpatient revenue generated annually for their facilities by a single, full-time equivalent physician in a variety of specialties through procedures performed through the hospital, tests and treatments ordered, etc. In the case of primary care physicians, survey respondents were asked to determine revenue from direct admissions, procedures performed and lab tests — not indirect revenue primary care physicians may have generated from patient referrals to specialists utilizing the hospital.
Trends in physician-generated revenue
Net annual income generated by physicians has fluctuated over the past eight years, with average 2010 annual net revenue generated by all 17 reported specialties sitting at $1,543,788 in 2010. This represents a small increase of 3 percent over average annual net revenue generated by all specialties in 2007 ($1,496,432), a decline of 19 percent from the average annual net revenue generated by all specialties in 2004 ($1,855,773) and a relatively similar number to the average annual net revenue generated by all specialties in 2002 ($1,540,181). Approximately $1.5 million has proven to be a benchmark number for revenue generated by all physician specialties over the last eight years, according to Merritt Hawkins, as three of the four surveyed years produced an average total revenue close to $1.5 million.
Despite the recession, the Merritt Hawkins survey found that average net revenue increased in 2010 over 2007 — an interesting finding considering that CFOs participating in the 2010 survey were asked to provide revenue numbers generated by physicians during a period of severe economic recession. While the recession did not appear to take a toll on generated revenue overall, the survey concluded that for some specialties — for example, internal medicine — the recession had an effect. It is possible that general internists, who generally treat a patient population with a high percentage of indigent, geriatric and other poor-paying patients, saw less revenue during the recession as internists were unable to make up for poor payor mix by providing extra services.
While revenue generated by some specialists decreased in 2010, other specialists saw an increase. For example, pediatricians experienced a revenue increase, a trend that Merritt Hawkins attributed to the expansion of health insurance for children. General surgeons also saw an increase in 2010, perhaps due to the growing shortage of general surgeons. As fewer medical students choose to pursue general surgery, per-physician caseloads could be increasing and driving up per-physician generated revenue, according to the report.
The survey also concluded that the increase in generated revenue could reflect the strengthening bond between physicians and their affiliated hospitals. As more physicians seek hospital employment, physicians may be driving more patients and more work to the hospital rather than to other facilities, such as physician-owned ambulatory surgery centers.
Statistics on physician-generated revenue and compensation
The following data demonstrates trends in physician-generated revenue over the last eight years, as well as the level of compensation physicians receive in comparison to the revenue they generate. Compensation data comes from Merritt Hawkins' 2009 Review of Physician Recruiting Incentives.
Neurosurgery
Average 2010 revenue: $2,815,650
Average 2007 revenue: $2,100,000
Average 2004 revenue: $2,406,275
Average 2002 revenue: $2,364,864
Average salary: $571,000
Invasive cardiology
Average 2010 revenue: $2,240,366
Average 2007 revenue: $2,662,600
Average 2004 revenue: $2,490,748
Average 2002 revenue: n/a
Average salary: $475,000
Orthopedic surgery
Average 2010 revenue: $2,117,764
Average 2007 revenue: $2,312,168
Average 2004 revenue: $2,992,022
Average 2002 revenue: $1,855,944
Average salary: $481,000
General surgery
Average 2010 revenue: $2,112,492
Average 2007 revenue: $1,947,934
Average 2004 revenue: $2,446,987
Average 2002 revenue: $1,835,470
Average salary: $321,000
Internal medicine
Average 2010 revenue: $1,678,341
Average 2007 revenue: $1,987,253
Average 2004 revenue: $2,100,124
Average 2002 revenue: $1,569,000
Average salary: $186,000
Family practice
Average 2010 revenue: $1,622,832
Average 2007 revenue: $1,615,828
Average 2004 revenue: $2,000,329
Average 2002 revenue: $1,559,482
Average salary: $173,000
Gastroenterology
Average 2010 revenue: $1,450,540
Average 2007 revenue: $1,335,133
Average 2004 revenue: $1,735,338
Average 2002 revenue: $1,246,428
Average salary: $393,000
Non-invasive cardiology
Average 2010 revenue: $1,319,658
Average 2007 revenue: $2,240,786
Average 2004 revenue: $2,646,039
Average 2002 revenue: n/a
Average salary: $419,000
Learn more about Merritt Hawkins.
Related Articles on Hospital Revenue:
Wyoming's Ivinson Memorial Posts $7.1M Gross Revenue, Surprising Financial Officers
UCLA Health System CEO David Feinberg: Prioritizing Patients Drives System's Success
Lancaster General Hospital's Surplus Wanes