The Organization of Medical Practice and Primary Care Physician Income

This study investigates the effect of the organization of medical practice, e.g., solo, fee-for-service group, or health maintenance organization (HMO) settings, on primary care physicians' net incomes. Using pooled data on 2,372 primary care physicians, multivariate regression analysis is used to adjust physicians' 1979 net incomes for differences in medical specialty, workload, sex, and experience before estimating the effects of the organization of medical practice. Among HMO physicians, only those in staff model HMOs were found to have significantly lower net incomes than their fee-for-service group practice counterparts. Accordingly, there is little evidence to support the popular belief that physicians practicing in HMOs consistently earn less than their fee-for-service counterparts. (Am J Public Health 1983; 73:379-383.)