Incomes steady while patient loads soar

Part II of the NRM practice management survey
looks at incomes. The amount of work you have
to put in to earn a dollar keeps rising

By Charles Corvallis

Before going into this issue's topic of practice incomes, it's worth looking at some demographic information. The first thing to note is that the survey results given here are for all physicians, both general practitioners and specialists. Of the respondents, 66% were in general practice, 34% were specialists, which is in keeping with national figures for the profession. There are, of course, significant differences in many areas between specialists and those in primary care. Future articles will look at the groups separately.

Of those physicians who returned the survey, 71% were men and 29% were women; 48% were age 50 or younger; 51% were between age 51 and 65. Marriage (or living common law) is the institution of choice for a significant 87%; only 7% of physicians reported they were single. A low 6.5% said they were divorced or separated. About one in three Canadians have been divorced and the figure may be about the same for physicians. The survey didn't ask if respondents had ever been divorced, it simply asked for the present marital status; the reality is likely that doctors who divorce generally soon remarry. Given the clear preference for marriage, it's perhaps not surprising that your colleagues have large families. Virtually all of those doctors who were married have children. Eleven percent of physician families had one child; 39% had two; while a whopping 49% had three or more kids. In keeping with the fact that half the physicians are over 50, fully 41% of the children's ages were 19 and older; 25% of physicians reported having kids between the ages of 13 and 18; with 34% indicating their children were age 12 and under.

INCOME KEEPS PACE
When it comes to gross pre-tax income, almost exactly 80% of physicians reported taking in $300,000 a year or less. Once practice expenses were deducted, 70% of respondents reported their net pre-tax income at $200,000 or less. At the high end, 20% reported grossing $300,000 or more and fully 18% put their net income over the $300,000 mark. Given the caps that affect most physicians in general practice, clearly the highest earners are among specialists. Fully a third of physicians expect incomes to be higher this year than they were in 2004; 21% are looking at lower incomes; 46% expect them to stay about the same. (Again, a future article will compare GP/FP and specialist earnings.)

These numbers paint the income picture with a broad brush. It's worthwhile looking at the breakout. Here, 9.3% reported gross incomes of $100,000 or less; 14.7% indicated gross practice take at between $100,001 and $150,000; 19.7% put their revenue between $150,001 and $200,000; a further 35.7% said they grossed between $200,001 and $300,000; the remainder took in $300,001 or more. Take home pay after paying practice expenses looked like this: 25.0% said their personal pretax income was less than $100,000 in 2004; 26.9% set the figure between $100,001 and $150,000; a further 17.8% said they made between $150,001 and $200,000 before taxes; 11.7% said they earned between $200,001 and $300,000; with the balance above that mark.

The raw figures bear some examination. They suggest, for example, about 70% of physicians (GPs and specialists combined) have gross pre-tax revenue of $300,000 or less and, again, that 70% of net incomes are $200,000 or less. In looking at the figures, it's important, of course, to remember that most physicians pay about half of their net income in taxes — not that many doctors are likely to forget it. Even given that substantial whack from the government, it appears that overall doctors are satisfied with their incomes. Of the top 10 items listed on the survey under the heading, "My most pressing practice problem," income wasn't mentioned once. If income isn't an issue, however, the effort necessary to earn that income clearly is. Fully seven of the top 10 practice challenges have to do with workloads that are too heavy.

The survey results strongly support the obvious: if the profession is to remain a healthy, vibrant one, ways must be found to reduce patient loads, particularly when it comes to primary care practices. The quality of life of the profession depends on it.

How does your income stack up against your US counterparts?
What Canadian physician worth his or her salt hasn't looked south and wondered if the pastures really are greener in the US. Here's a chance to find out. The figures below are taken from a Medical Economics magazine survey among US doctors — GPs, FPs and specialists. The figures are for 2003 and are shown in US dollars.