Practice Management

Management salaries show little progress

Some exceptions: MSOs, PPMCs

If you think the strong economy and burgeoning salaries you’ve read about have passed by your medical practice, you’re right. According to the latest figures from the annual Medical Group Management Association Management Compensation Survey, salaries for key management positions moved little from 1996 to 1997 — the latest year for which figures are available (see Table 1, p. 25).

Table 1
Median Direct Compensation
	1996	1997	Percent Change
Physician CEO	$241,820	$253,940	5.0
CEO	$123,000	$125,000	1.6
Practice Administrator	$77,000	$77.373	0.5
Small Practice Administrator	$55,918	$57,000	1.9
MSO Administrator/Director	$77,500	$81,136	4.7
PPMC Administrator	$61,839	$75,000	21.3
COO/Associate Administrator	$78,876	$81,000	2.7
Assistant Administrator	$48,000	$51,000	6.3
Director of Marketing	$42,500	$43,864	3.2
*Source:* MGMA Management Compensation Survey, Englewood, CO. ________________________________________________________________

With few exceptions, base salary increases among management in practices grew minimally, ranging from a half of a percent for practice administrators to 6.3% for an assistant administrator. The only exception among a selection of positions charted by Practice Marketing and Management is the administrator working for a physician practice management company. Administra tors for management service organizations (MSOs) also fared better than most, earning 4.7% more in direct compensation in 1997 than they did in 1996. "MSOs and PPMCs appear willing to pay top salaries for proven talent," says the report.

But while increases for management were low, there were some startling decreases in the amount of bonuses, incentives and retirement benefits combined paid to management at group practices (see Table 2 below ). The biggest drop came for directors of marketing, whose 3.2% pay raise was offset by a 23.5% decrease in benefits.

Table 2
Median Bonuses, Incentives, and Retirement Benefits _
	1996	1997	Percent Change
Physician CEO	$49,353	$50,566	2.5
CEO	$29,854	$25,565	-14.4
Practice Administrator	$14,304	$13,858	-3.1
Small Practice Administrator	$10,838	$9,000	-17.0
MSO Administrator/Director	$9,800	$10,792	10.1
PPMC Administrator	*	$9,500	N/A
COO/Associate Administrator	$13,306	$12,100	-9.1
Assistant Administrator	$6,467	$6,787	5.0
Director of Marketing	$5,050	$3,862	-23.5
* = Insufficient data for inclusion *Source:* MGMA Management Compensation Survey, Englewood, CO. ________________________________________________________________

Another big loser in benefits was the small practice administrator, who ended up with a worse average package in 1997 after seeing a 17% drop in bonuses and retirement benefits.

Only physician CEOs, assistant administrators, and MSO administrators saw increases — of 2.5%, 5.0%, and 10.1% respectively.

Bonus and incentive benefits amounts alone appeared to be responsible for the drop in total benefits packages (see Table 3 below). Marketing directors saw incentives fall by more than half, while a small practice administrator (fewer than seven physicians) saw bonus and incentive payments fall by a fifth. Only physician CEOs and assistant administrators had any gain in this area.

Table 3
Median Bonuses and Incentives Payments__ _
	1996	1997	Percent Change
Physician CEO	$31,667	$35,630	12.5
CEO	$17,854	$15,000	-16.0
Practice Administrator	$6,825	$6,331	-7.2
Small Practice Administrator	$5,000	$4,000	-20.0
MSO Administrator/Director	$7,000	$7,000	-
PPMC Administrator	*	$5,000	N/A
COO/Associate Administrator	$7,000	$6,250	-10.7
Assistant Administrator	$2,400	$2,717	13.2
Director of Marketing	$2,250	$1,000	-55.6
* = Insufficient data for inclusion *Source:* MGMA Management Compensation Survey, Englewood, CO. ________________________________________________________________

The Cost Survey: 1998 Report Based on 1997 Data is $200 for MGMA members, $250 for MGMA affiliates and $300 for others, plus shipping and handling. For more information, call the MGMA Service Center at (888) 608-5602.