Many medical groups lost money in 2004.

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Author: Romano, Michael

Even as some medical specialties enjoyed modest increases in compensation last year, many U.S. medical groups lost money in 2004, according to a new survey by the American Medical Group Association looking at data from about 34,500 physicians in medical groups.

The Alexandria, Va.-based trade group said that even as compensation increased in 2004 for three specialties--general surgery (9%), pediatrics and adolescent (8.7%), and hematology and oncology (8.5%)--groups in the northern U.S. lost an average of $1,365 per physician. Groups in the eastern region were operating at a loss for the first time in four years, absorbing deficits of $784 per doctor. Groups in the southern region made a slight profit of $40 per doctor, and those in the western region earned about $479 per physician, but that figure marked a sharp decline from $1,530 the previous year.

Don Fisher, the association's president and chief executive officer, blamed a leveling off of compensation after years of sharp increases in high-demand specialties. "As compensation increases slow, the cost of practicing medicine continues to rise," Fisher said.

He also noted that many of the big multispecialty groups represented by the AMGA make costly and "substantial investments in technology."

PHOTO (COLOR): Fisher: Costs are up but compensation has slowed.

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By Michael Romano

from Modern Physician