Survey of ob/gyns reflects tough times, hard choices

Lower earnings, higher malpractice insurance premiums and longer work weeks-last year was a tough year for ob/gyns, according to Medical Economics' 2010 Exclusive Survey.

The survey, which was administered in June to more than 4,000 office-based physicians and osteopaths in more than 17 specialties, of which 600 were ob/gyns, found that median earnings for ob/gyns dropped 10%, from $237,500 in 2008 to $213,000 in 2009. By contrast, earnings for family physicians, general practitioners, and internists stayed roughly the same from 2008 to 2009, ticking up from $162,500 to $163,000. Pediatricians, however, reported a median decline in earnings of 13%, from $187,500 to $163,000.

When asked to compare practice finances in 2009 to those in 2008, 57% of ob/gyns reported that they had worsened; 31% said they were about the same; and only 9% reported an improvement.

Practice size, age, and experience matter

Not all ob/gyns have fared the same during the downturn. A number of factors, including practice size, years of clinical experience, and age, play a large role in earnings. (The following data are not specific to ob/gyns, but cover all primary care specialties.)

Just as in 2008, clinicians in solo practice earned the least. Physicians who shared expenses made more, but still less than those in multidoctor practices. Large practices-those with 26 to 50 physicians and those with more than 50-reported the highest earnings, ahead of those with 2 to 25 physicians. There could be several explanations for that, says Judy Bee, a consultant with the Practice Performance Group in La Jolla, California, and a Medical Economics adviser. A large practice is more likely to be able to offer profitable ancillary services, such as lab work and x-rays. A bigger group is also more likely to employ midlevel staff who can see patients but who don't cost as much as physicians.

Physician-owned practices typically have small financial reserves, adds David Gans, vice president for innovation and research at Medical Group Management Association, a professional organization for practice managers headquartered in Washington, DC. Larger practices and those affiliated with hospitals enjoy other advantages as well, he says, including market clout, more leverage in negotiations with third-party payers, and economies of scale.

Michael Potruch, MD, is an ob/gyn in Mission Hills, California, and a member of HealthCare Partners Medical Group, one of the largest physician-owned medical groups in California. After spending several years in a smaller practice, he welcomes the security that comes with working for a large group.

"We're pretty good sized, so we're in a pretty good place as things go along," he says, adding that more colleagues are seeking safety in numbers. "We're getting calls every week from people who want to get on board."

Another advantage of larger practices, MGMA's Gans points out, is that they have been quicker to adopt electronic health records (EHR), which require a large initial expenditure but if they meet government requirements, they are eligible for federal subsidies proportional to the number of Medicare and Medicaid patients in the practice. "They're better situated to take advantage of the financial benefits of an EHR," he says.

HealthCare Partners installed an EHR system several years ago. Despite a learning curve and some initial problems, the system saves time, Potruch says. Home access to records is convenient, he notes, but adds, "The biggest thing for me is not having to write the prescriptions."

David Janowitz, MD, an ob/gyn in Houston, Texas, says his 3-doctor practice probably will install an EHR system in 2011, but he doesn't relish the change. "We have immediate access to information [now]. We're going to wind up spending a lot of money for something that's not going to be a big benefit for us," he complains.

Of the ob/gyns polled, 57% said they did not currently use an EHR system; of that group, 16% said they had no plans to implement one.

Experience pays, according to the survey. Physicians with 21 to 30 years in practice reported the highest median earnings. The next highest in earnings were reported by those with 6 to 20 years' experience and those with more than 30 years under their belts. Not surprisingly, physicians with 2 or fewer years on the job reported the lowest earnings.

Experience comes with age, so it's to be expected that physicians ages 35 to 64 years reported the highest earnings. Doctors 65 and older, many of whom are nearing retirement, earned less but still more than their counterparts between the ages of 30 to 34, who, at a median of $135,000, trailed all others.

With earnings of $213,000, male physicians outearned their female colleagues, whose median income was $163,000.