ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, September 4, 1996 TAG: 9609040119
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
NOTE: Below
Physician salaries dropped in 1994 for the first time in more than a decade, with specialists taking the hardest hit as managed care became more widespread.
``This is the first time we've seen a reduction in take-home pay'' since statistics were first compiled in 1982, said Carol Simon, an economics professor at the University of Illinois at Chicago and co-author of a new study published in the health policy journal Health Affairs.
On average, doctors' income has risen nearly 6 percent annually since 1982 - 2.2 percent when inflation is taken into account.
With an average income of $187,000 in 1994, doctors were still among the highest-paid workers in America. But that was 4percent less than in 1993, the report said.
Specialists' salaries have dropped the most, as managed care has pressured primary care physicians to minimize expensive, specialist care. Some plans charge primary care doctors for referrals to specialists, creating an outright financial disincentive, Simon said.
``Clearly, if you're a physician it's not good news,'' she said.
``There's certain pressure out there,'' said Dr. Amy Dubois, who has just begun practicing as a general surgeon in Boston. ``It gets harder and harder to cover expenses, and the reimbursements just get lower and lower.''
Dubois, 32, said she is making $85,000 this year after five years in a low-paid residency, four years of medical school and about $50,000 in debt.
``It's not like it's starvation wages,'' she said. ``But the perception that being a physician is a way to be wealthy is ridiculous.''
It's unclear whether the decline in 1994 is good or bad news for the health-care system as a whole, Simon said. Are inefficiencies being squeezed out, or is managed care cutting corners?
``What we can't address - and it's probably the million or billion-dollar question - [is] what impact does this have on quality of care being delivered?'' Simon said.
Specialist salaries are dropping because there are too many specialists in the market - not because of managed care, said Donald White, spokesman for the American Association of Health Plans, which represents about 1,000 managed care plans.
Other doctor salaries are dropping as employers demand more for their health-care money, White said. ``This is a structural change that we're seeing.''
But there's no question that the structural change has included managed care, which has become increasingly popular. In 1995, more than 83 percent of all physicians had at least one managed care contract, up from 61 percent in 1990 and 43 percent in 1986.
And physicians in states with the highest penetration of managed care, such as California and Massachusetts, reported larger declines in earnings, the study found.
The study notes other factors at work, including diminishing Medicare reimbursements, sharply reduced Medicaid payments in many states and a trend toward more doctors working in group practices, where they work fewer hours but make less money.
Based on annual surveys by the American Medical Association, the report found that in 1994:
* Earnings for doctors in specialities such as general surgery, psychiatry and gynecology dropped the most, 5.3 percent, from an average of $189,121 to $179,072.
* Physicians in subspecialities within internal medicine, surgery and pediatrics (such as pediatric cardiology) earned an average of $243,828, down 5.1 percent from $256,868.
* Hospital-based physicians, including anesthesiologists, radiologists, pathologists and emergency medicine specialists, made an average of $214,828, down 4.6 percent from $224,902.
* Primary-care physicians, who make the least - an average of $129,353 - saw their incomes drop the least, just 1.7 percent.
1994 was the last year for which figures were available.
LENGTH: Medium: 79 linesby CNB