For neurosurgeons seeking a first post-training practice opportunity or eyeing a move to a new position, the picture is bright. The persisting demand-and-supply imbalance means that positions, from private practice to academia, remain plentiful throughout the country, and compensation competitive. At the same time, the fast-growing trend toward consolidation in medicine generally— with groups merging, and hospitals and health systems pushing for closer alignment with specialists through either employment or financial affiliation—is having a palpable effect on marketplace dynamics.
Neurosurgeon incomes are either rising or holding steady in most areas of the country and most for practice types because demand for services is increasing. Still, industry observers predict that the continuing downward pressures on reimbursement from Medicare and commercial payors may have an offsetting on practices’ revenues, and in turn, physician incomes, in the post-health reform era. “Some of the highly compensated specialties are already experiencing these pressures—and that will likely intensify in the next few years,” said William Jessee, MD, president and CEO of the Medical Group Management Association (MGMA) in Englewood, Colo.
What’s uncertain, he added, is how the mandated coverage provisions of health reform will enter into the equation. For specialties such as neurosurgery, whose physicians treat many uninsured patients who come in through emergency departments, the mandated coverage might balance out reimbursement declines. “I think we’re all in a wait-and-see mode right now,” Dr. Jessee said.
Survey Findings Mostly Positive
Two long-standing physician compensation and medical group productivity surveys, those produced annually by the MGMA and the American Medical Group Association (AMGA), both reported rising neurosurgeon compensation this year. The 2011 MGMA survey, which included 98 groups representing 261 neurosurgeons, found a median income of $701,928. AMGA’s survey of 78 groups (312 total neurosurgeons) showed median compensation of $625,300, up from $592,811 in 2010.
The newest entrant in the survey realm, the Neurosurgery Executives’ Resource, Value & Education Society (NERVES) in Charlotte, N.C., provides a more detailed picture of what’s going on in neurosurgeon compensation. The 2010 NERVES survey encompassing 72 groups representing 390 neurosurgeons, reported a media income of $730,530, with a negligible differential—less than $1,000--between physician-owned practices and those owned by and academic institutions. However, notable compensation differences appear when practice types are factored in. Neurosurgeons in single-specialty groups had a median income of $664,000, compared to $819,708 in multi-specialty practices. In academic practices, the median was $747,998.
The latter shift, with incomes rising in multi-specialty and academic groups compared to single-specialty ones, may be a reflection of what’s occurring in the market at large, suggests Derek Cantrell, executive director of the 29-neurosurgeon group Goodman Campbell Brain & Spine in Indianapolis and chair of the NERVES survey committee. “Neurosurgery practices are increasingly becoming employed by hospitals or health systems, and that [trend] is clear in our own survey findings,” Mr. Cantrell said.
When responding groups were asked about possible changes ahead in their ownership status, 20 of the 72 responding groups reported that they had been approached by a health system regarding a possible employment arrangement. Of those, eight (as of fall 2010) were engaged in such negotiations. “This is what everyone in the field is talking about at the national meetings,” Mr. Cantrell observed.
John Dunn, RN, MHA, administrator of the nine-physician group Midwest Neurosurgery & Spine Specialists in Omaha, Neb., concurs with Mr. Cantrell about the trend’s effect. The move toward health-system employment and use of a “leasing” model is boosting incomes and expanding opportunities and across the board, he maintained. “That’s the biggest thing we’re seeing right now—and I think that the market is wide open for neurosurgeons who are flexible and willing to consider [opportunities] around the country,” he said.
Practice Type, Regional Variations Persist
National trends aside, the key determining factors in neurosurgeons’ income levels—years in practice and practice size—remain mostly unchanged in recent years. The NERVES survey found that neurosurgeons who have been in practice between six and 15 years have the highest median incomes, at $914,796, while for those in practice five years or fewer the median is $594,997. Interestingly, the highest median incomes, $959,843, are found in “medium large” groups—those with 11 to 20 neurosurgeons. In groups with one to five, and 20 or more neurosurgeons, respectively, the median compensation differential between the two, at $749,248 and $734,119, is fairly small.
On a regional level, the compensation differences that have existed historically—not just for neurosurgeons but for many specialists—also persist. The MGMA survey found that median incomes were lowest in the East, at $599,581; and highest in the Midwest, at $747,947. Median earnings for the South and West were neck and neck, at $717,749 and $716,491, respectively.
The NERVES survey’s results did not concord with MGMA’s, interestingly, possibly because of the respondent mix. That organization reported median incomes of $1,027,166 in the East and, at the lower end, $683,450 in the Midwest. The South and West came in at $727,436 and $828,263, respectively.
Neurosurgeons, having endured a long and very expensive training chapter, are understandably interested in ensuring a commensurate income. But for most, that’s not the most important factor anymore, most sources agreed. Like other physicians in virtually any specialty, neurosurgeons are increasingly looking for a combination of both professional challenge and a reasonable lifestyle that allows time for family and non-clinical pursuits— ideally, of course, in the region of their choice.
“Neurosurgeons are not as interested in maximizing their incomes as they once were, and for most who select to work in an academic center income is not at the top of the list,” observed J. Matthew Scott, MHA, director of physician operations at Medical College of Virginia Physicians in Richmond, Va., whose group includes eight neurosurgeons. “But if they are saddled with education debt, income is obviously an important consideration.”
As such, Mr. Scott and other sources agreed, most practices are just as intent on ensuring fair, market- and practice-supportable compensation for neurosurgeons and other specialists. “We would never keep our doctors if we were paying in the 25th percentile,” Mr. Scott acknowledged. “We have to be within the 40th and 70th.”