The Primary Care–Specialty Income Gap: Why It Matters
Thomas Bodenheimer, MD; Robert A. Berenson, MD; and Paul Rudolf, MD, JD
A large, widening gap exists between the incomes of primary care
physicians and those of many specialists. This disparity is important
because noncompetitive primary care incomes discourage medical
school graduates from choosing primary care careers.
The Resource-Based Relative Value Scale, designed to reduce the
inequality between fees for office visits and payment for proce-
dures, failed to prevent the widening primary care–specialty income
gap for 4 reasons: 1) The volume of diagnostic and imaging pro-
cedures has increased far more rapidly than the volume of office
visits, which benefits specialists who perform those procedures; 2)
the process of updating fees every 5 years is heavily influenced by
the Relative Value Scale Update Committee, which is composed
mainly of specialists; 3) Medicare’s formula for controlling physician
payments penalizes primary care physicians; and 4) private insurers
tend to pay for procedures, but not for office visits, at higher levels
than those paid by Medicare. Payment reform is essential to guar-
antee a healthy primary care base to the U.S. health care system.
Ann Intern Med. 2007;146:301-306.
For author affiliations, see end of text.
come gap is widening.
According to surveys done by the Medical Group
Management Association, median physician income for all
primary care increased by 9.9% from 2000 to 2004, com-
pared with a 15.8% increase for all non–primary care spe-
cialties. During those years, median income for family
practice physicians increased 7.5% to $156 000, median
income for invasive cardiologists increased 16.9% to
$428 000, median income for hematologists and oncolo-
gists increased 35.6% to $350 000, and median income for
diagnostic radiologists increased 36.2% to $407 000. Table 1
shows trends in physician compensation.
Two other sources, Medical Economics and the Center
for Studying Health System Change, confirm these trends
(1–4). The income disparity is not explained by a differ-
ence in hours worked per week (5). Fifteen percent of
full-time family practice physicians earned less than
$100 000 in 2004, whereas 20% of invasive cardiologists,
25% of neurosurgeons, and 14% of orthopedists had in-
comes of $600 000 or more (1).
Does this income gap matter? Yes. Although incomes
of primary care physicians are far higher than the earnings
of most persons in the United States, and the public has
little sympathy for physicians who cry poor, the lower in-
come of primary care physicians is a major factor leading
U.S. medical students to reject primary care careers (6, 7).
The percentage of U.S. medical graduates choosing family
medicine decreased from 14% in 2000 to 8% in 2005 (8).
Seventy-five percent of internal medicine residents eventu-
ally become subspecialists or hospitalists rather than gen-
eral internists (9). Because office visit fees are relatively low,
primary care physicians schedule many short, rushed visits
to keep afloat financially, which potentially compromises
patient outcomes (10) and fosters the unsustainable physi-
cian work life that contributes to students’ avoidance of
primary care careers (11). With a median debt of $120 000
for public and $160 000 for private medical schools, med-
ical students are further discouraged from choosing careers
ncomes of primary care physicians are well below those
of many specialists, and the primary care–specialty in-
in primary care because of the noncompetitive income
WHY IS THE PRIMARY CARE–SPECIALTY INCOME GAP
The Resource-Based Relative Value Scale (RBRVS)
system (13), adopted by Medicare in 1992 and copied in
part by private insurers, was designed to lessen the fee
disparity between office visits—the bread and butter of
primary care—and procedures provided by specialists.
What happened? Why has the primary care–specialty in-
come gap widened rather than narrowed? (Appendix, avail-
able at www.annals.org).
Under the RBRVS system, the 2005 Medicare fee for
a typical 25- to 30-minute office visit to a primary care
physician in Chicago was $89.64 for a patient with a com-
plex medical condition (Current Procedural Terminology
[CPT] code 99214). The fee is calculated by multiplying
the relative value unit (RVU) for the 99214 CPT code
(2.18) by the 2005 Medicare conversion factor (37.8975)
and adding a geographic adjustment. The 2005 Medicare
fee was $226.63 for a gastroenterologist in the outpatient
department of a Chicago hospital performing a colonos-
copy (CPT code 45378), which is of similar duration to
the office visit. Colonoscopy performed in a private office
in Chicago, which differs from the hospital setting because
the gastroenterologist pays for equipment and nursing
time, would cost $422.90. Office visits are considered eval-
uation and management services (history, physical exami-
nation, and medical decision making), whereas colonosco-
pies are an example of a procedural service.
Conversion of tables into slides
Annals of Internal Medicine
© 2007 American College of Physicians 301
Current Author Addresses: Dr. Bodenheimer: Building 80-83, San
Francisco General Hospital, 1001 Potrero Avenue, San Francisco, CA
Dr. Berenson: Urban Institute, 2100 M Street NW, Washington, DC
Dr. Rudolf: Arent Fox, PLLC, 1050 Connecticut Avenue NW, Wash-
ington, DC 20036.
APPENDIX: TAKE-HOME POINTS
An income gap exists between primary care and specialty
providers because, under the Resource-Based Relative Value Scale
reimbursement system, medical procedures are reimbursed at
substantially higher levels than office visits taking the same
amount of time. Specialists perform far more procedures than do
primary care providers.
The existing gap is widening due to the following reasons.
1. The volume of procedures, particularly imaging, is in-
creasing more rapidly than the volume of office visits. Specialists
can perform more procedures more quickly, whereas primary
care providers cannot see more patients more quickly without
reducing quality of care or their own and their patients’ satisfac-
2. Specialties are overrepresented on the Relative Value Scale
Update Committee (RUC), which advises the Centers for Medi-
care & Medicaid Services on revisions to reimbursement. The
RUC recommendations therefore tend to favor specialist over
primary care reimbursement.
3. When growth in Medicare physician expenditures exceeds
growth in the economy, the difference is subtracted from fees to
all physicians under Medicare’s substainable growth rate (SGR)
formula. A major factor causing excess growth in physician ex-
penditures is the rapidly increasing volume of some procedures.
Primary care physicians are unfairly hurt by the SGR system
because they experience fee reductions that were chiefly caused by
specialty volume growth.
4. Private insurers exacerbate the gap, on average, reimburs-
ing specialists at large percentages and primary care providers at
small percentages over Medicare rates. Specialists have historically
negotiated higher reimbursements from private plans and are in
an even stronger position because of the emergence of market-
dominant, single-specialty groups with the power to command
Payment reform to narrow the income gap is essential if the
United States is to maintain a healthy primary care base to its
health care system.
Annals of Internal Medicine
W-76 20 February 2007 Annals of Internal Medicine Volume 146 • Number 4