According to findings in the American Medical Group Association’s 2006 Medical Group Compensation & Financial Survey, most medical specialties saw only modest increases in compensation during 2005. However, the survey found that during 2005, dermatology saw a 12% increase in compensation, the largest increase reported by any specialty. The survey also showed a small decrease in productivity among dermatologists, which begs the question: Why the dramatic increase in compensation? (Download the tables.)
To get some answers, Skin & Aging talked to two dermatologists from different parts of the country with different types of practices. Neal Bhatia, M.D., recently moved from San Diego to start a new dermatology practice in Milwaukee. Elizabeth Tanzi, M.D., is Co-Director of the Washington Institute of Dermatologic Laser Surgery and Clinical Instructor of Dermatology at the Johns Hopkins Medical Center.
How Accurate Are These Surveys?
The first question that has to be asked about these surveys is: How accurate are they? Since the survey required physicians to return answers by mail, the results may be somewhat skewed by the fact that those with the highest increase in compensation may have been more inclined to respond. However, this would likely be true across the board, so although you might question the actual 12% value, it is highly likely that dermatologists did experience an increase in compensation that was significantly higher than the physician community at large.
But what of the value itself; can the 12% be trusted? “If the survey took into account regional differences, the number of part-time physicians, and what type of procedures the dermatologists are doing, then it is probably accurate,” says Dr. Bhatia.
According to Dr. Bhatia, an important consideration when looking at surveys such as this is to realize that regional differences may be more important than the nationwide numbers. In addition, the type of practices included in the survey results will dramatically impact the results.
“A survey that is broken down by region, as well as by other factors such as the type of services provided, whether the group or practice makes uses of physician extenders and so on, will likely provide more accurate data and be more useful for physicians within each region,” he explains. “Nationwide numbers may be interesting, but if you’re in one region, you cannot use the nationwide data to make business or compensation decisions because that data may not be relevant for your area.”
Are These Surveys Useful?
For the established dermatologist in a solo or small practice, this survey or others like it, while they may make interesting reading, are not very useful other than as a comparative to see how your practice measures up against similar practices. Unless you are contemplating changing your practice, then the information is of little value to you. However, if you practice within a large medical group, the survey information may provide some useful salary guidelines.
“This particular survey may be helpful for dermatologists who are considering or are already practicing in a large multi-specialty group to help negotiate for fair compensation,” says Dr. Tanzi. “Beyond that it’s interesting, but I don’t think that it is relevant or useful to dermatologists in private practice or solo practice.”
Dr. Bhatia agrees that these surveys have some value as a comparative measure to determine how your particular practice is doing, which may lead to a business decision to make changes.
“As a young dermatologist, you can use these surveys as a benchmark. Established physicians can look at it as a way to determine where you fall on the range of compensation. If you fit into one of the demographic categories, and you’re making around the median or less, then you have to ask yourself what you need to do increase your compensation,” says Dr. Bhatia. “For me and for others like me who are just starting a new practice in a new location, I’m still paying of my start up expenses and expanding my patient populations, these types of numbers in a survey have little relevance to what I am doing.”
What’s Behind the Big Increase?
With insurance and Medicare reimbursements shrinking, conventional wisdom would hold that physician compensation would shrink as well. At the very least, compensation should hold steady and for the average physician in family practice the survey shows that to be true. However, the reported 12% increase for dermatologists flies in the face of logic, especially in view of the fact that the survey showed only a slight rise in the amount of work the dermatologists reported doing. Other factors seem to have offset the conditions that would drive physician compensation down.
“The most likely factor for the increase in compensation for dermatologist is the rise in popularity of non-invasive cosmetic procedures,” says Dr. Tanzi. “If there was not an overall rise in the amount of work that dermatologist are doing then it would seem to point to more dermatologists doing cosmetics.”
Dr. Bhatia agrees with that assessment. “The 12% increase reported is probably reasonable for dermatology as a whole. However, for physicians who do primarily general dermatology, their change in compensation would not be as dramatic, in fact it may have actually gone down,” says Dr. Bhatia, “It would appear that what is happening is that the rise in the number of dermatologist who are doing cosmetic procedures accounts for the majority of increase.”
Another factor at work is the shortage of dermatologists, both perceived and real, especially in more rural areas. “If there is a perceived shortage in a regional area, then a dermatologist might be offered a higher compensation as an incentive to stay or an inducement to move,” says Dr. Bhatia. “If a group is recruiting and they are offering higher compensation to prospects to induce them to move, then they have to offer their current staff higher salaries as well. That is going to drive compensation up in that area.”
Dr. Bhatia also points to the increasing use of physician assistants and nurse practitioners as a factor in increasing compensation. “If you’re in a larger medical group, your compensation is likely tied to that of the extenders that work with you, and the more they do, the more your pay will go up,” he explains. “Even in a solo or small practice, an extender is going to allow you to make more money because you can see more and more patients.
Will the Trend Continue?
Although it is impossible to predict what will happen with compensation in the coming years, it is possible to project current trends to make an educated guess about the direction that compensation change might take. With insurance companies reducing payments and the looming Medicare cuts poised to take a bite out of medical practice revenues, it may seem that the financial future for dermatologists is bleak. However, it may turn out not to be as gloomy.
“When judging these things, you have to separate the influence on general dermatology versus the influence on cosmetic work,” says Dr. Bhatia. “Those in general dermatology will likely see their revenues and compensation eroded by the cuts in Medicare reimbursements, not all at once, but slowly over time as recently demonstrated by the change in reimbursement for destructions. However, it won’t have much impact at all on those practices that offer cash-based, elective cosmetic procedures, and I think that we can continue to see significant gains for cosmetic dermatologists.”
Dr. Tanzi is even more optimistic for those in cosmetic dermatology. “I would expect this trend to continue because dermatologists have established themselves as the experts to deliver these minimal down-time procedures,” she explains. “Therefore, as public interest in these procedures continues to rise, so to will the demand for such services by dermatologists.”
What Impact Does This and Similar Surveys Have on the Profession?
Even if compensation surveys have little relevance to those not in large, multi-specialty medical groups and who are therefore not negotiating compensation packages, they are still likely to have an influence on a lot of dermatologists. If the large jump in compensation can be attributed to the rise in elective, cosmetic procedures, this may influence more dermatologists to pursue cosmetics, which may reduce the number of physicians available for general dermatology patients.
“I think that the potential for more revenue is driving dermatologists into cosmetics,” says Dr. Bhatia. “Medical dermatology has been on the decline for a long time because the formularies are getting more restrictive and insurance carriers are getting more averse to paying for procedures and office visits. Quite frankly, when you can make more on one Botox treatment then you can on seeing 10 general dermatology patients that is where the physicians will go.”
The real question is: What impact will this have on patient care? Undoubtedly, if an increasing number of dermatologist move into cosmetics, it will be come harder for those needing general dermatology care.
“I think that there is a real need for balance between medical and cosmetic dermatology services. It would be very troubling if the pending Medicare cuts would drive more dermatologists to offer only non-insurance-based elective procedures,” says Dr. Tanzi. “As it stands now, a new patient may have to wait many months to see a dermatologist. If that particular trend continues, then patient care may suffer.”
The Impact on New Dermatologists
Despite her concerns about the possible impact on patient care, she remains hopeful that enough dermatologists will continue to offer general dermatologic services.
“There will always be a large percentage of dermatologists who eschew cosmetic procedures because that is not what they like to do. Compensation aside, there are disadvantages to offering cosmetic procedures in the office,” she explains. “It is an entirely different patient population and depending on the personality of the dermatologist, he or she may prefer to treat general dermatology patients rather than patients who are seeking cosmetic procedures. I don’t think that as of tomorrow we will no longer have general dermatologists.”
Dr. Tanzi is concerned, however, that dermatologists just finishing their training and looking at surveys and compensation issues may be influenced to move directly into cosmetics.
“To dermatology residents coming out of training, these are very powerful numbers,” she says. “They are seeing what is happening, and they are watching reimbursements fall. So if they haven’t established their particular likes and dislikes within dermatology, they may be swayed to move into cosmetics.”
According to findings in the American Medical Group Association’s 2006 Medical Group Compensation & Financial Survey, most medical specialties saw only modest increases in compensation during 2005. However, the survey found that during 2005, dermatology saw a 12% increase in compensation, the largest increase reported by any specialty. The survey also showed a small decrease in productivity among dermatologists, which begs the question: Why the dramatic increase in compensation? (Download the tables.)
To get some answers, Skin & Aging talked to two dermatologists from different parts of the country with different types of practices. Neal Bhatia, M.D., recently moved from San Diego to start a new dermatology practice in Milwaukee. Elizabeth Tanzi, M.D., is Co-Director of the Washington Institute of Dermatologic Laser Surgery and Clinical Instructor of Dermatology at the Johns Hopkins Medical Center.
How Accurate Are These Surveys?
The first question that has to be asked about these surveys is: How accurate are they? Since the survey required physicians to return answers by mail, the results may be somewhat skewed by the fact that those with the highest increase in compensation may have been more inclined to respond. However, this would likely be true across the board, so although you might question the actual 12% value, it is highly likely that dermatologists did experience an increase in compensation that was significantly higher than the physician community at large.
But what of the value itself; can the 12% be trusted? “If the survey took into account regional differences, the number of part-time physicians, and what type of procedures the dermatologists are doing, then it is probably accurate,” says Dr. Bhatia.
According to Dr. Bhatia, an important consideration when looking at surveys such as this is to realize that regional differences may be more important than the nationwide numbers. In addition, the type of practices included in the survey results will dramatically impact the results.
“A survey that is broken down by region, as well as by other factors such as the type of services provided, whether the group or practice makes uses of physician extenders and so on, will likely provide more accurate data and be more useful for physicians within each region,” he explains. “Nationwide numbers may be interesting, but if you’re in one region, you cannot use the nationwide data to make business or compensation decisions because that data may not be relevant for your area.”
Are These Surveys Useful?
For the established dermatologist in a solo or small practice, this survey or others like it, while they may make interesting reading, are not very useful other than as a comparative to see how your practice measures up against similar practices. Unless you are contemplating changing your practice, then the information is of little value to you. However, if you practice within a large medical group, the survey information may provide some useful salary guidelines.
“This particular survey may be helpful for dermatologists who are considering or are already practicing in a large multi-specialty group to help negotiate for fair compensation,” says Dr. Tanzi. “Beyond that it’s interesting, but I don’t think that it is relevant or useful to dermatologists in private practice or solo practice.”
Dr. Bhatia agrees that these surveys have some value as a comparative measure to determine how your particular practice is doing, which may lead to a business decision to make changes.
“As a young dermatologist, you can use these surveys as a benchmark. Established physicians can look at it as a way to determine where you fall on the range of compensation. If you fit into one of the demographic categories, and you’re making around the median or less, then you have to ask yourself what you need to do increase your compensation,” says Dr. Bhatia. “For me and for others like me who are just starting a new practice in a new location, I’m still paying of my start up expenses and expanding my patient populations, these types of numbers in a survey have little relevance to what I am doing.”
What’s Behind the Big Increase?
With insurance and Medicare reimbursements shrinking, conventional wisdom would hold that physician compensation would shrink as well. At the very least, compensation should hold steady and for the average physician in family practice the survey shows that to be true. However, the reported 12% increase for dermatologists flies in the face of logic, especially in view of the fact that the survey showed only a slight rise in the amount of work the dermatologists reported doing. Other factors seem to have offset the conditions that would drive physician compensation down.
“The most likely factor for the increase in compensation for dermatologist is the rise in popularity of non-invasive cosmetic procedures,” says Dr. Tanzi. “If there was not an overall rise in the amount of work that dermatologist are doing then it would seem to point to more dermatologists doing cosmetics.”
Dr. Bhatia agrees with that assessment. “The 12% increase reported is probably reasonable for dermatology as a whole. However, for physicians who do primarily general dermatology, their change in compensation would not be as dramatic, in fact it may have actually gone down,” says Dr. Bhatia, “It would appear that what is happening is that the rise in the number of dermatologist who are doing cosmetic procedures accounts for the majority of increase.”
Another factor at work is the shortage of dermatologists, both perceived and real, especially in more rural areas. “If there is a perceived shortage in a regional area, then a dermatologist might be offered a higher compensation as an incentive to stay or an inducement to move,” says Dr. Bhatia. “If a group is recruiting and they are offering higher compensation to prospects to induce them to move, then they have to offer their current staff higher salaries as well. That is going to drive compensation up in that area.”
Dr. Bhatia also points to the increasing use of physician assistants and nurse practitioners as a factor in increasing compensation. “If you’re in a larger medical group, your compensation is likely tied to that of the extenders that work with you, and the more they do, the more your pay will go up,” he explains. “Even in a solo or small practice, an extender is going to allow you to make more money because you can see more and more patients.
Will the Trend Continue?
Although it is impossible to predict what will happen with compensation in the coming years, it is possible to project current trends to make an educated guess about the direction that compensation change might take. With insurance companies reducing payments and the looming Medicare cuts poised to take a bite out of medical practice revenues, it may seem that the financial future for dermatologists is bleak. However, it may turn out not to be as gloomy.
“When judging these things, you have to separate the influence on general dermatology versus the influence on cosmetic work,” says Dr. Bhatia. “Those in general dermatology will likely see their revenues and compensation eroded by the cuts in Medicare reimbursements, not all at once, but slowly over time as recently demonstrated by the change in reimbursement for destructions. However, it won’t have much impact at all on those practices that offer cash-based, elective cosmetic procedures, and I think that we can continue to see significant gains for cosmetic dermatologists.”
Dr. Tanzi is even more optimistic for those in cosmetic dermatology. “I would expect this trend to continue because dermatologists have established themselves as the experts to deliver these minimal down-time procedures,” she explains. “Therefore, as public interest in these procedures continues to rise, so to will the demand for such services by dermatologists.”
What Impact Does This and Similar Surveys Have on the Profession?
Even if compensation surveys have little relevance to those not in large, multi-specialty medical groups and who are therefore not negotiating compensation packages, they are still likely to have an influence on a lot of dermatologists. If the large jump in compensation can be attributed to the rise in elective, cosmetic procedures, this may influence more dermatologists to pursue cosmetics, which may reduce the number of physicians available for general dermatology patients.
“I think that the potential for more revenue is driving dermatologists into cosmetics,” says Dr. Bhatia. “Medical dermatology has been on the decline for a long time because the formularies are getting more restrictive and insurance carriers are getting more averse to paying for procedures and office visits. Quite frankly, when you can make more on one Botox treatment then you can on seeing 10 general dermatology patients that is where the physicians will go.”
The real question is: What impact will this have on patient care? Undoubtedly, if an increasing number of dermatologist move into cosmetics, it will be come harder for those needing general dermatology care.
“I think that there is a real need for balance between medical and cosmetic dermatology services. It would be very troubling if the pending Medicare cuts would drive more dermatologists to offer only non-insurance-based elective procedures,” says Dr. Tanzi. “As it stands now, a new patient may have to wait many months to see a dermatologist. If that particular trend continues, then patient care may suffer.”
The Impact on New Dermatologists
Despite her concerns about the possible impact on patient care, she remains hopeful that enough dermatologists will continue to offer general dermatologic services.
“There will always be a large percentage of dermatologists who eschew cosmetic procedures because that is not what they like to do. Compensation aside, there are disadvantages to offering cosmetic procedures in the office,” she explains. “It is an entirely different patient population and depending on the personality of the dermatologist, he or she may prefer to treat general dermatology patients rather than patients who are seeking cosmetic procedures. I don’t think that as of tomorrow we will no longer have general dermatologists.”
Dr. Tanzi is concerned, however, that dermatologists just finishing their training and looking at surveys and compensation issues may be influenced to move directly into cosmetics.
“To dermatology residents coming out of training, these are very powerful numbers,” she says. “They are seeing what is happening, and they are watching reimbursements fall. So if they haven’t established their particular likes and dislikes within dermatology, they may be swayed to move into cosmetics.”
According to findings in the American Medical Group Association’s 2006 Medical Group Compensation & Financial Survey, most medical specialties saw only modest increases in compensation during 2005. However, the survey found that during 2005, dermatology saw a 12% increase in compensation, the largest increase reported by any specialty. The survey also showed a small decrease in productivity among dermatologists, which begs the question: Why the dramatic increase in compensation? (Download the tables.)
To get some answers, Skin & Aging talked to two dermatologists from different parts of the country with different types of practices. Neal Bhatia, M.D., recently moved from San Diego to start a new dermatology practice in Milwaukee. Elizabeth Tanzi, M.D., is Co-Director of the Washington Institute of Dermatologic Laser Surgery and Clinical Instructor of Dermatology at the Johns Hopkins Medical Center.
How Accurate Are These Surveys?
The first question that has to be asked about these surveys is: How accurate are they? Since the survey required physicians to return answers by mail, the results may be somewhat skewed by the fact that those with the highest increase in compensation may have been more inclined to respond. However, this would likely be true across the board, so although you might question the actual 12% value, it is highly likely that dermatologists did experience an increase in compensation that was significantly higher than the physician community at large.
But what of the value itself; can the 12% be trusted? “If the survey took into account regional differences, the number of part-time physicians, and what type of procedures the dermatologists are doing, then it is probably accurate,” says Dr. Bhatia.
According to Dr. Bhatia, an important consideration when looking at surveys such as this is to realize that regional differences may be more important than the nationwide numbers. In addition, the type of practices included in the survey results will dramatically impact the results.
“A survey that is broken down by region, as well as by other factors such as the type of services provided, whether the group or practice makes uses of physician extenders and so on, will likely provide more accurate data and be more useful for physicians within each region,” he explains. “Nationwide numbers may be interesting, but if you’re in one region, you cannot use the nationwide data to make business or compensation decisions because that data may not be relevant for your area.”
Are These Surveys Useful?
For the established dermatologist in a solo or small practice, this survey or others like it, while they may make interesting reading, are not very useful other than as a comparative to see how your practice measures up against similar practices. Unless you are contemplating changing your practice, then the information is of little value to you. However, if you practice within a large medical group, the survey information may provide some useful salary guidelines.
“This particular survey may be helpful for dermatologists who are considering or are already practicing in a large multi-specialty group to help negotiate for fair compensation,” says Dr. Tanzi. “Beyond that it’s interesting, but I don’t think that it is relevant or useful to dermatologists in private practice or solo practice.”
Dr. Bhatia agrees that these surveys have some value as a comparative measure to determine how your particular practice is doing, which may lead to a business decision to make changes.
“As a young dermatologist, you can use these surveys as a benchmark. Established physicians can look at it as a way to determine where you fall on the range of compensation. If you fit into one of the demographic categories, and you’re making around the median or less, then you have to ask yourself what you need to do increase your compensation,” says Dr. Bhatia. “For me and for others like me who are just starting a new practice in a new location, I’m still paying of my start up expenses and expanding my patient populations, these types of numbers in a survey have little relevance to what I am doing.”
What’s Behind the Big Increase?
With insurance and Medicare reimbursements shrinking, conventional wisdom would hold that physician compensation would shrink as well. At the very least, compensation should hold steady and for the average physician in family practice the survey shows that to be true. However, the reported 12% increase for dermatologists flies in the face of logic, especially in view of the fact that the survey showed only a slight rise in the amount of work the dermatologists reported doing. Other factors seem to have offset the conditions that would drive physician compensation down.
“The most likely factor for the increase in compensation for dermatologist is the rise in popularity of non-invasive cosmetic procedures,” says Dr. Tanzi. “If there was not an overall rise in the amount of work that dermatologist are doing then it would seem to point to more dermatologists doing cosmetics.”
Dr. Bhatia agrees with that assessment. “The 12% increase reported is probably reasonable for dermatology as a whole. However, for physicians who do primarily general dermatology, their change in compensation would not be as dramatic, in fact it may have actually gone down,” says Dr. Bhatia, “It would appear that what is happening is that the rise in the number of dermatologist who are doing cosmetic procedures accounts for the majority of increase.”
Another factor at work is the shortage of dermatologists, both perceived and real, especially in more rural areas. “If there is a perceived shortage in a regional area, then a dermatologist might be offered a higher compensation as an incentive to stay or an inducement to move,” says Dr. Bhatia. “If a group is recruiting and they are offering higher compensation to prospects to induce them to move, then they have to offer their current staff higher salaries as well. That is going to drive compensation up in that area.”
Dr. Bhatia also points to the increasing use of physician assistants and nurse practitioners as a factor in increasing compensation. “If you’re in a larger medical group, your compensation is likely tied to that of the extenders that work with you, and the more they do, the more your pay will go up,” he explains. “Even in a solo or small practice, an extender is going to allow you to make more money because you can see more and more patients.
Will the Trend Continue?
Although it is impossible to predict what will happen with compensation in the coming years, it is possible to project current trends to make an educated guess about the direction that compensation change might take. With insurance companies reducing payments and the looming Medicare cuts poised to take a bite out of medical practice revenues, it may seem that the financial future for dermatologists is bleak. However, it may turn out not to be as gloomy.
“When judging these things, you have to separate the influence on general dermatology versus the influence on cosmetic work,” says Dr. Bhatia. “Those in general dermatology will likely see their revenues and compensation eroded by the cuts in Medicare reimbursements, not all at once, but slowly over time as recently demonstrated by the change in reimbursement for destructions. However, it won’t have much impact at all on those practices that offer cash-based, elective cosmetic procedures, and I think that we can continue to see significant gains for cosmetic dermatologists.”
Dr. Tanzi is even more optimistic for those in cosmetic dermatology. “I would expect this trend to continue because dermatologists have established themselves as the experts to deliver these minimal down-time procedures,” she explains. “Therefore, as public interest in these procedures continues to rise, so to will the demand for such services by dermatologists.”
What Impact Does This and Similar Surveys Have on the Profession?
Even if compensation surveys have little relevance to those not in large, multi-specialty medical groups and who are therefore not negotiating compensation packages, they are still likely to have an influence on a lot of dermatologists. If the large jump in compensation can be attributed to the rise in elective, cosmetic procedures, this may influence more dermatologists to pursue cosmetics, which may reduce the number of physicians available for general dermatology patients.
“I think that the potential for more revenue is driving dermatologists into cosmetics,” says Dr. Bhatia. “Medical dermatology has been on the decline for a long time because the formularies are getting more restrictive and insurance carriers are getting more averse to paying for procedures and office visits. Quite frankly, when you can make more on one Botox treatment then you can on seeing 10 general dermatology patients that is where the physicians will go.”
The real question is: What impact will this have on patient care? Undoubtedly, if an increasing number of dermatologist move into cosmetics, it will be come harder for those needing general dermatology care.
“I think that there is a real need for balance between medical and cosmetic dermatology services. It would be very troubling if the pending Medicare cuts would drive more dermatologists to offer only non-insurance-based elective procedures,” says Dr. Tanzi. “As it stands now, a new patient may have to wait many months to see a dermatologist. If that particular trend continues, then patient care may suffer.”
The Impact on New Dermatologists
Despite her concerns about the possible impact on patient care, she remains hopeful that enough dermatologists will continue to offer general dermatologic services.
“There will always be a large percentage of dermatologists who eschew cosmetic procedures because that is not what they like to do. Compensation aside, there are disadvantages to offering cosmetic procedures in the office,” she explains. “It is an entirely different patient population and depending on the personality of the dermatologist, he or she may prefer to treat general dermatology patients rather than patients who are seeking cosmetic procedures. I don’t think that as of tomorrow we will no longer have general dermatologists.”
Dr. Tanzi is concerned, however, that dermatologists just finishing their training and looking at surveys and compensation issues may be influenced to move directly into cosmetics.
“To dermatology residents coming out of training, these are very powerful numbers,” she says. “They are seeing what is happening, and they are watching reimbursements fall. So if they haven’t established their particular likes and dislikes within dermatology, they may be swayed to move into cosmetics.”
