Survey: Administrators, marketers doing well
Most managers gain from hot economy
If you think you’ve been doing well financially during the economic upswing of the 1990s, you now have some data to back up your gut feeling. According to the Management Compensation Survey: 1999 Report Based on 1998 Data released by the Medical Group Management Association (MGMA) in Englewood, CO, most administrators in group practices have seen their incomes rise during the past year.
The latest survey, released in October, shows that administrators of small practices (six or fewer full-time physicians) had a 5.26% increase in median compensation to $60,000. Those who manage larger practices earned $80,000, an increase of 3.4%. (For more information on the salary changes, see table, below.)
| Median Compensation for Selected Management Positions | |||
| Title | '97 Compensation ($) | '98 Compensation ($) | % Change |
| Physician CEO/President | 253,940 | 259,231 | 2.08 |
| Medical Director | 186,720 | 160,000 | 14.31 |
| CEO | 125,000 | 126,524 | 1.22 |
| Practice Administrator (<6 physicians) | 57,000 | 60,000 | 5.26 |
| Practice Administrator (>7 physicians) | 77,373 | 80,000 | 3.40 |
| PPMC Administrator | 75,000 | 92,765 | 23.69 |
| Director, Marketing/Sales | 43,864 | 48,000 | 9.43 |
| Director, Planning/Development | 55,403 | 60,502 | 9.20 |
| Source: Medical Group Management Association, Englewood, CO. | |||
Physician chief executives saw their salaries rise more slowly between 1997 and 1998 than other positions — up just 2.08% to $259,231. Nonphysician CEOs also saw a slower increase — just 1.22%. However in both cases, the survey’s trend data shows large gains over the last five years — 20.41% for physician CEOs and 26.52% for their nonphysician counterparts between 1994 and 1998.
The survey also shows the greater emphasis being put on sales and marketing in practices. The median salary for a director of marketing and sales increased by more than 9% to $48,000 over the year. Part of the increase stems from more highly educated consumers, explains Jerome Henry, MBA, MSHA, project manager for the survey. He says another reason is the increasing ability of marketing directors to act for physicians and their practices during managed care contract negotiations.
Directors of planning and development saw a similar gain in their salaries. But by far, the largest one-year gain goes to administrations at physician practice management companies (PPMCs), who saw compensation increase by nearly a quarter, from $75,000 to $92,765 between 1997 and 1998. More interesting will be next year’s data, which might reflect the relative decline in the status of PPMCs over the last year to 18 months.
The companion Cost Survey: 1999 Report Based on 1998 Data shows that hospital-owned practices aren’t faring as well as other medical groups. The survey shows that multispecialty groups owned by physicians, foundations, or businesses broke even in 1998, compared to a loss of nearly $80,000 per physician for hospital-owned multispecialty groups. The MGMA project manager for the survey, Daniel Jaynes, MBA, MSHA, says part of the reason may be that production for hospital-owned practices tends to be lower, while salaries remain competitive. The hospitals also aren’t as good at managing their receivables as other practices, he says.
[Editor’s note: The management compensation survey features data from 1,725 medical practices, while the cost survey represents some 1,300 practices. The former can be purchased for $75 for members, $95 for affiliates, and $115 for others. The cost survey is $200 for members, $250 for affiliates, and $300 for others. Shipping and handling are additional. For details or to purchase either report, contact the MGMA at (888) 608-5602 or visit the Web at www.mgma.com.]
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