Medicare payment changes and physicians' incomes

An effort to control the physician portion of Medicare expenditures and to narrow the income gap between primary care and procedure-based physicians was effected through t he enactment of the Medicare Fee Schedule (MFS). To determine whether academic and private sector physicians' incomes had demonstrated changes consistent with payment changes, we collected income information from surveys of private sector physicians and academic physicians in six specialties: (1) family practice; (2) general internal medicine; (3) psychiatry; (4) general surgery; (5) radiology; and (6) anesthesiology. With the exception of general internal medicine, the anticipated changes in Medicare revenue were not closely associated with income changes in either the academic or private sector group. Academic physicians were underpaid, relative to their private sector counterparts, but modestly less so at the end of the period examined. Our findings suggest that using changes in payment schedules to change incomes in order to influence the attractiveness of different specialties, even with a very large payer, may be ineffective. Should academic incomes remain uncompetitive with private sector incomes, it may be increasingly difficult to persuade physicians to enter academic careers.