Pay and Benefits: Comparative Analyses of Federal Physicians'
Compensation (Letter Report, 09/15/97, GAO/GGD-97-170).

Pursuant to a congressional request, GAO provided information on pay and
benefits of physicians employed by the federal government and in the
private sector, to be used in considering reauthorization of the Federal
Physicians Comparability Allowance Act (5 U.S.C. 5948). GAO did not
attempt to make conclusions or recommendations on the sufficiency, size,
or continued need for physician comparability allowances (PCA).

GAO noted that: (1) the average annual pay for Department of Health and
Human Services (HHS) physicians paid under title 5 was: (a) 17 percent
less than the average for HHS physicians who received special pay under
title 38; (b) 21 percent less than the average for the Department of
Veterans Affairs (VA) physicians paid under title 38; (c) 4 percent
greater than the average for Commissioned Corps physicians; and (d) 23
percent greater than the average for physicians in the military; (2) the
average pay for title 5 HHS physicians was $101,660; (3) for HHS
physicians who received PCAs, average pay was $104,730 compared with
$79,485 for those who did not receive a PCA or special pay under title
38; (4) the average pay for Department of Defense (DOD) physicians paid
under title 5 was $86,760; (5) for DOD physicians receiving a PCA,
average pay was 89,710; (6) for VA and HHS physicians who received
special pay under title 38, average pay was $128,540 and $122,555,
respectively; (7) average pay for physicians in the military (Army and
Air Force) and the Commissioned Corps, both of whom were paid under
title 37, was $78,250 and $97,770, respectively; (8) in general,
physicians paid under titles 37 and 38 were eligible for and received
more types and higher amounts of special pay than HHS and DOD physicians
receiving PCAs under title 5; (9) the average PCA for HHS physicians was
$15,760 and the average PCA for DOD physicians paid under title 5 was
$12,505; (10) average special pay amounts for VA and HHS physicians
receiving title 38 special pay were $39,585 and $38,950, respectively;
(11) average special pay amounts for physicians in the military and the
Commissioned Corps were $35,190 and $43,260, respectively; (12) for
selected medical specialties, GAO comparisons of pay information from
studies of private sector physicians' pay with the pay of federal
physicians who were paid under titles 37 and 38 showed that private
sector physicians were generally paid more; (13) in addition to basic
pay and physicians' special pay, federal and private sector physicians
were eligible for employer-provided nonwage compensation; (14) regarding
ongoing efforts that affect or have the potential to affect physicians'
pay, GAO identified two recent initiatives; (15) since November 1993,
the Office of Personnel Management (OPM) has delegated authority to HHS,
DOD, and the Department of Justice allowing them to provide title 38
special pay to their physicians; (16) as of May 1997, HHS was the only
agency to have used this authority; and (17) VA is currently exploring
the feasibility and appropriateness of linking physicians' pay with
performance.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-97-170
     TITLE:  Pay and Benefits: Comparative Analyses of Federal 
             Physicians' Compensation
      DATE:  09/15/97
   SUBJECT:  Comparative analysis
             Federal employees
             Employee benefit plans
             Wage surveys
             Compensation
             Income statistics
             Physicians
             Salary increases

             
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Cover
================================================================ COVER


Report to the Honorable
Constance A.  Morella
House of Representatives

September 1997

PAY AND BENEFITS - COMPARATIVE
ANALYSES OF FEDERAL PHYSICIANS'
COMPENSATION

GAO/GGD-97-170

Analyses of Federal Physicians' Pay and Benefits

(410101)


Abbreviations
=============================================================== ABBREV

  AMGA - American Medical Group Association
  CDC - Centers for Disease Control
  C.F.R - Code of Federal Regulations
  COLA - Cost-of-living allowance
  CSRS - Civil Service Retirement System
  DOD - Department of Defense
  FDA - Food and Drug Administration
  FERS - Federal Employees Retirement System
  HHCS - Hospital & Healthcare Compensation Service
  HHS - Department of Health and Human Services
  HMO - Health Maintenance Organizations
  IHS - Indian Health Service
  MGMA - Medical Group Management Association
  NIH - National Institutes of Health
  OMB - Office of Management and Budget
  OPM - Office of Personnel Management
  PCA - Physicians Comparability Allowance
  U.S.C.  - United States Code
  VA - Department of Veterans Affairs

Letter
=============================================================== LETTER


B-276378

September 15, 1997

The Honorable Constance A.  Morella
House of Representatives

Dear Ms.  Morella: 

This report responds to your request for information on pay and
benefits of physicians employed by the federal government and in the
private sector to be used in considering reauthorization of the
Federal Physicians Comparability Allowance Act (5 U.S.C.  5948).  The
authority to enter agreements to pay physicians comparability
allowances (PCA) under this act is currently due to expire on
September 30, 1997.  This act permits federal agencies that are
experiencing problems in recruiting and retaining physicians to
provide PCAs to physicians who are paid under title 5 of the U.S. 
Code.  On July 18, 1997, the Director of the Office of Personnel
Management (OPM) transmitted a report on PCAs to the President of the
Senate and the Speaker of the House of Representatives recommending a
3-year extension of agencies' authority to enter into PCA agreements
with employees. 


   BACKGROUND
------------------------------------------------------------ Letter :1

As of September 1996, there were over 25,000 full-time physicians
employed by the federal government.  (See appendix IV.) Most of the
physicians paid under title 5 were with the Departments of Health and
Human Services (HHS) and Defense (DOD).\1 Physicians paid under title
37 were with HHS' Public Health Service Commissioned Corps or on
military duty.  Physicians paid under title 38 were with the
Department of Veterans Affairs (VA).  Although not eligible to
receive PCAs under title 5, physicians paid under titles 37 and 38
are eligible to receive other types of special pay for physicians. 
Also, under a delegation of authority from OPM, some HHS physicians
who receive basic pay under title 5 are eligible to receive special
pay under title 38. 


--------------------
\1 A small number of federal physicians work for such organizations
as the Tennessee Valley Authority or the Central Intelligence Agency
or are in the Foreign Service.  These physicians are paid under other
titles of the U.S.  Code and are also eligible for PCAs. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
------------------------------------------------------------ Letter :2

As we agreed with you, our principal objectives were to (1) compare
amounts paid\2 to federal physicians under title 5 with amounts paid
to physicians under other sections of the U.S.  Code and with
physicians in the private sector; (2) determine what other types of
pay and benefits federally employed physicians receive; and (3)
identify ongoing efforts by federal agencies that affect or have the
potential to affect physicians' pay.  In addition to the primary
comparisons required by our objectives, we also developed additional
analyses of physicians' compensation, which are discussed in appendix
I. 

In our previous report on federal/private sector pay comparisons,\3
we noted that experts in labor market analysis suggested that
federal/private compensation comparisons that focus exclusively on
pay may be misleading.  A more complete analysis of total
compensation would be needed to consider factors such as differences
in pay plans and job responsibilities, federal restrictions limiting
amounts of either basic or special pay, working conditions, job
satisfaction, and risks of being laid off.  This would apply to
comparisons among federal positions as well.  Because much of this
information was not available from studies of physicians' pay and
because of the time constraints for completing this review, we only
obtained pay-type information for federal and private sector
physicians and did not assess these other factors.  In addition, as
agreed, we did not evaluate the significance of recruitment or
retention problems upon which PCAs are based.  Therefore, we did not
attempt to make conclusions or recommendations on the sufficiency,
size, or continued need for PCAs under title 5. 

On the basis of our preliminary work, we agreed to obtain physicians'
pay and benefit information for full-time federal physicians paid
under titles 5, 37, and 38 of the U.S.  Code.  In doing our work, we
interviewed officials from HHS, DOD, VA, OPM, and the Office of
Management and Budget (OMB) to obtain descriptive information on the
various types of pay and benefits that physicians received and on
recent actions that affect or have the potential to affect
physicians' pay.  HHS, VA, DOD, and the Commissioned Corps provided
us with payroll information, which we used to make our comparisons. 
Unless otherwise stated, except for military physicians, federal
physicians' pay data in this report are for calendar year 1996.  We
did not verify the pay information we obtained.  Our scope and
methodology are described in greater detail in appendix III. 

We also purchased and reviewed several studies on physicians'
compensation that were prepared by private consulting firms.\4 These
studies contained pay information for physicians in various medical
specialties who were employed primarily in group practices, health
maintenance organizations (HMO), and hospitals.  Except for pay data
for physicians in various medical specialties, these studies did not
contain information that would allow us to compare the pay of the
private sector physicians with the pay received by federal
physicians. 

We requested comments on a draft of this report from the Secretaries
of HHS, Defense, and VA, and the Directors of OPM and OMB.  The
agencies' comments are discussed at the end of this letter.  We
performed our review from December 1996 to August 1997 in accordance
with generally accepted government auditing standards. 


--------------------
\2 For the purpose of this report, we defined amounts paid to
physicians as "physicians' pay," which was the total of basic pay
plus any special pay or PCAs that were available only to physicians. 
Basic pay is defined in appendix III. 

\3 Federal Personnel:  Federal/Private Sector Pay Comparisons
(GAO/OCE-95-1, Dec.  14, 1994). 

\4 We purchased studies prepared by Hospital & Healthcare
Compensation Service (HHCS); Sullivan, Cotter, and Associates,
Incorporated (Sullivan); American Medical Group Association (AMGA);
and Medical Group Management Association (MGMA).  Two of these
organizations cautioned users of their reports that the data provided
by responding medical practices may not be representative of all
physicians or all medical groups because the data were not based on a
random sample of medical practices. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :3

The average\5 annual pay for HHS physicians\6 paid under title 5 was
(1) 17 percent less than the average for HHS physicians who received
special pay under title 38, (2) 21 percent less than the average for
VA physicians paid under title 38, (3) 4 percent greater than the
average for Commissioned Corps physicians, and (4) 23 percent greater
than the average for physicians in the military. 

The average pay for title 5 HHS physicians was $101,660.  For HHS
physicians who received PCAs, average pay was $104,730 compared with
$79,485 for those who did not receive a PCA or special pay under
title 38.  The average pay for DOD physicians paid under title 5 was
$86,760.  For DOD physicians receiving a PCA, average pay was
$89,710.  For VA physicians and HHS physicians who received special
pay under title 38, average pay was $128,540 and $122,555,
respectively.  Average pay for physicians in the military (Army and
Air Force) and the Commissioned Corps, both of whom were paid under
title 37, was $78,250 and $97,770, respectively. 

In general, physicians paid under titles 37 and 38 were eligible for
and received more types and higher amounts of special pay than HHS
and DOD physicians receiving PCAs under title 5.  The average PCA for
HHS physicians was $15,760, and the average PCA for DOD physicians
paid under title 5 was $12,505.  Average special pay amounts for VA
and HHS physicians receiving title 38 special pay were $39,585 and
$38,950, respectively.  Average special pay amounts for physicians in
the military and the Commissioned Corps were $35,190 and $43,260,
respectively. 

For selected medical specialties, our comparisons of pay information
from studies of private sector physicians' pay with the pay of
federal physicians who were paid under titles 37 and 38 showed that
private sector physicians were generally paid more.  In some
specialties, private sector physicians were paid considerably more. 
Pay information for HHS physicians paid under title 5 was not
available by medical specialty.  These physicians were not eligible
for specialty pay, per se, but were eligible for PCAs based on
determinations that significant recruitment and retention problems
existed. 

In addition to basic pay and physicians' special pay, federal and
private sector physicians were eligible for employer-provided nonwage
compensation (e.g., retirement and health and life insurance
benefits).  Some federal physicians also received other types of pay
based on factors such as hours of duty, special skills, or places of
work.  Physicians in the military and the Commissioned Corps were
generally entitled to supplements to basic pay in the form of
tax-free allowances for subsistence and housing.  Appendix I contains
information on these other benefits. 

Regarding ongoing efforts that affect or have the potential to affect
physicians' pay, we identified two recent initiatives.  Since
November 1993, OPM has delegated authority to HHS, DOD, and the
Department of Justice allowing them to provide title 38 special pay
to their physicians.  As of May 1997, HHS was the only agency to have
used this authority.  Also, VA is currently exploring the feasibility
and appropriateness of linking physicians' pay with performance. 


--------------------
\5 In this report, the word "average" refers to the mean.  We
recognize that the use of medians is preferred because they are not
subject to distortions that may occur in averages when extremely high
or low values are included in a data set.  However, we used averages
because they were only slightly different from the medians and
because the medians were not available for all federal physician
groups we compared.  We also rounded all dollar amounts to the
nearest 5 or 0. 

\6 For the purpose of this report, unless otherwise cited,
information on physicians paid under title 5 was based on amounts
paid by HHS and DOD to physicians who both did and did not receive
PCAs.  According to OMB data, HHS employed approximately 1,363 of the
2,402 title 5 government physicians in fiscal year 1996.  Because of
time constraints, other than selected data on title 5 physicians with
DOD, we elected not to obtain detailed pay data on physicians paid
under title 5 who were with non-HHS agencies. 


   ANALYSES OF PHYSICIANS' PAY
------------------------------------------------------------ Letter :4

We used several measures--averages, medians, and percentiles--to
portray and compare the pay federal physicians received under titles
5, 37, and 38.  Our principal analyses consisted of comparisons of
(1) physicians' pay--a combination of basic and special pay, (2)
basic pay, (3) special pay, and (4) federal and private sector
physicians' pay for selected medical specialties. 


      FEDERAL PHYSICIANS' PAY
      COMPARISONS
---------------------------------------------------------- Letter :4.1

When measured by the average, physicians' pay for HHS physicians who
did not receive title 38 special pay was less than physicians' pay of
HHS and VA physicians who received special payments under title 38. 
In contrast, average physicians' pay of HHS physicians exceeded the
average pay of military and Commissioned Corps physicians who were
paid under title 37.  Table 1 shows, for government physicians paid
under titles 5, 37, and 38, average amounts of basic and special pay
combined.  Where available, we also included information on maximum
pay, medians, and pay at the 25th and 75th percentiles. 



                                     Table 1
                     
                        Annual Physicians' Pay for Federal
                         Physicians in Selected Agencies

Groups of physicians        25th                                75th
by pay titles         percentile      Median     Average  percentile     Maximum
--------------------  ----------  ----------  ----------  ----------  ----------
HHS title 5              $89,540    $102,640    $101,660    $113,255    $148,400
HHS title 5               94,150     104,350     104,730     117,310     147,705
 receiving PCAs
DOD title 5                  N/A         N/A      86,760         N/A         N/A
DOD title 5                  N/A         N/A      89,710         N/A         N/A
 receiving PCAs
HHS title 5              111,290     133,200     122,555     145,645     167,440
 receiving title 38
 special pay
VA title 38              118,845     128,910     128,540     139,090     186,700
Commissioned Corps           N/A         N/A      97,770         N/A         N/A
 title 37
Military physicians          N/A         N/A      78,250         N/A   151,230\a
 title 37
--------------------------------------------------------------------------------
Note:  N/A indicates that data were not available. 

\a For military physicians, the maximum amount paid was not based on
actual payroll information but was based on DOD pay tables and
information on special pay provided by a program official. 

Source:  GAO analysis of physicians' pay data provided by federal
agencies. 

According to DOD officials, the majority of military physicians do
not make the military a career and usually leave active military duty
after fulfilling all required service obligations for education and
training.  Approximately 70 percent of the physician force is evenly
distributed between the O-3 (entry level) and O-4 ranks.\7

This skews the presentation of "average salaries" of military
physicians to relatively low amounts. 


--------------------
\7 In the Army and the Air Force, the O-3 rank is a Captain and the
O-4 rank is a Major.  In the Navy, the O-3 rank is a Lieutenant and
the O-4 rank is a Lieutenant Commander. 


      FEDERAL BASIC PAY
      COMPARISONS
---------------------------------------------------------- Letter :4.2

Similar to total physicians' pay, basic pay--one component of
physicians' pay--was the highest for HHS and VA physicians and lowest
for physicians in the military.  HHS physicians paid under title 5
and VA physicians paid under title 38 had average basic pays of
$87,815 and $89,350, respectively.  Average basic pay for physicians
paid under title 37 was $43,110 for physicians in the military and
$54,510 for Commissioned Corps physicians. 

Average basic pay received by physicians paid under titles 5, 37, and
38 of the U.S.  Code is shown in table 2.  Where available, maximum
basic pay authorized or received by these physicians as well as
median pay amounts and amounts paid to physicians at the 25th and
75th percentile are also shown. 



                                     Table 2
                     
                     Annual Basic Pay for Federal Physicians
                               in Selected Agencies

Groups of physicians        25th                                75th
by pay titles         percentile      Median     Average  percentile     Maximum
--------------------  ----------  ----------  ----------  ----------  ----------
HHS title 5              $79,005     $87,265     $87,815     $98,315    $148,400
HHS title 5               79,760      88,345      88,970      98,680     130,250
 receiving PCAs
DOD title 5                  N/A         N/A      77,685         N/A     102,620
DOD title 5                  N/A         N/A      77,205         N/A     101,615
 receiving PCA
HHS title 5               80,135      91,375      83,605      98,680     110,670
 receiving title 38
 special pay
VA title 38               90,090      90,090      89,350      90,090     123,100
Commissioned Corps        41,355      48,520      54,510      71,600      98,290
 title 37
Military physicians          N/A         N/A      43,110         N/A   104,240\a
 title 37
--------------------------------------------------------------------------------
Note:  N/A indicates data were not available. 

\a For military physicians, the maximum amount paid was not based on
actual payroll information but was based on DOD pay tables. 

Source:  GAO analysis of basic pay data provided by federal agencies. 


      FEDERAL SPECIAL PAY
      COMPARISONS
---------------------------------------------------------- Letter :4.3

For physicians receiving special pay--the second component of
physicians' pay--average PCAs received by physicians under title 5
were lower than special pay received under titles 37 and 38.  Large
differences in average special pay to physicians--over
$20,000--existed between HHS physicians who received PCAs ($15,760)
and VA physicians and HHS physicians who received special pay under
title 38 ($39,585 and $38,950, respectively).  The average PCA of HHS
physicians ($15,760) was also lower than the average special pay
received by military and Commissioned Corps physicians, $35,190 and
$43,260, respectively.  Table 3 shows special pay averages for
federal physicians.  Where available, maximum special pay received by
these physicians as well as the medians and amounts paid to
physicians at the 25th and 75th percentile are also shown. 



                                     Table 3
                     
                          Annual Special Pay for Federal
                         Physicians in Selected Agencies

Groups of physicians        25th                                75th
by pay titles         percentile     Median    Average    percentile     Maximum
--------------------  ----------  ---------  ---------  ------------  ----------
HHS title 5              $12,065    $16,615    $15,760     $20,000\a   $20,000\a
 receiving PCAs
DOD title 5                  N/A        N/A     12,505           N/A      20,000
 receiving PCAs
HHS title 5               30,060     44,075     38,950        50,365      63,000
 receiving title 38
 special pay
VA title 38               29,500     39,000     39,585        48,295      84,485
Commissioned Corps           N/A        N/A     43,260           N/A         N/A
 title 37
Military physicians          N/A        N/A     35,190           N/A    79,500\b
 title 37
--------------------------------------------------------------------------------
Note:  N/A indicates that data were not available. 

\a The maximum authorized annual PCA amount is shown.  In several
cases, payroll records included PCA payments for an additional pay
period in 1996, thereby showing PCA payments in excess of the
maximum. 

\b Based on DOD program information. 

Sources:  GAO analysis of information provided by federal agencies. 

Unlike HHS and DOD physicians who received only PCAs, physicians paid
under title 37 and 38 were eligible to receive several types of
special pay.  However, not all physicians can receive each type of
special pay.  Table 4 shows, for the five different types of special
pay paid under title 37, the number of Commissioned Corps and
military physicians that received each type of special pay, the
average amount of special pay received, and authorized maximum
special pay amounts.  Table 5 shows the authorized maximum amounts
for each of the seven types of special pay paid under title 38 as the
actual data were not readily available.  Each type of special pay is
described in more detail in appendix II. 



                                Table 4
                
                    Types and Amounts of Special Pay
                 Received by Military and Commissioned
                            Corps Physicians

                                                   Average  Authorized
                                        Number      amount     maximum
                            Agency   receiving    received     special
Type of special pay         ------  ----------  ----------  pay amount
Board certified             Milita       5,071      $3,595      $6,000
                             ry\a
                            Corps        1,171       4,300
Variable                    Milita       8,872       7,860      12,000
                             ry
                            Corps        1,458       8,735
Additional                  Milita       6,593      15,000      15,000
                             ry
                            Corps        1,309      14,930
Incentive                   Milita       5,790      17,385      36,000
                             ry
                            Corps        1,128      14,805
Multiyear                   Milita       2,011       9,745      14,000
                             ry
                            Corps          879      10,310
----------------------------------------------------------------------
\a Numbers and amounts reported for military physicians are based on
Army and Air Force payroll information. 

Sources:  GAO analysis of special pay data provided by the
Commissioned Corps and the Army and Air Force. 



                                Table 5
                
                 Authorized Maximum Special Pay Amounts
                             under Title 38

                                                            Authorized
                                                               maximum
                                                           special pay
Types of special pay                                           amounts
--------------------------------------------------  ------------------
Length of service                                              $25,000
Scarce specialty                                                40,000
Board certified                                                  2,500
Geographic location                                             17,000
Exceptional qualifications                                      15,000
Responsibility                                                  45,000
Full time                                                        9,000
----------------------------------------------------------------------
Note:  In a draft of this report, we presented information provided
to us by VA on the number of physicians receiving each type of
special pay and the average amounts received.  At VA's request, we
deleted these data by specific type of special pay because, upon
further review, VA noted that automated pay system records do not
contain complete information for individual special pay components. 

Source:  VA. 

Special pay received by individual physicians paid under titles 37
and 38 could differ significantly because not all physicians received
the same types or amounts of special pay.  PCAs received by title 5
physicians varied less because PCAs may not exceed $20,000.  In 1996,
of the 1,193 full-time HHS physicians\8 who had a full year of
service, 830 received only PCA pay; 113 received only physicians'
special pay under title 38; and 135 received both types of special
pay, but not at the same time during the year.  Of the full-time
physicians, 115, or less than 10 percent, did not receive PCAs or
title 38 special pay. 


--------------------
\8 We excluded HHS physicians in administratively determined pay
plans from our analysis of HHS data because most of these physicians
were research fellows at the National Institutes of Health (NIH) and
their duties were different from other full-time HHS physicians. 


   COMPARISON OF FEDERAL AND
   PRIVATE SECTOR PHYSICIANS' PAY
   FOR SELECTED MEDICAL
   SPECIALTIES
------------------------------------------------------------ Letter :5

HHS and DOD physicians paid under title 5 were not eligible for
specialty pay per se.  Instead, these physicians could be eligible
for PCAs based on agencies' determinations that significant
recruitment and retention problems existed for categories of
physicians.  According to PCA regulations (5 C.F.R.  595.103(b)),
categories of physicians include those doing direct care, research,
physical examinations, and administration of medical or health
programs.\9 Federal physicians paid under titles 37 and 38 and some
HHS physicians eligible for title 38 special pay could receive
special pay based on their certifications as specialists by one of
the recognized American Medical or Osteopathic Specialty Examining
Boards.  Such special payments included board-certified pay,
incentive and scarce-specialty pay, and multiyear special pay. 

In selected medical specialties in which large numbers of federal and
private physicians practiced (general surgery, internal medicine,
psychiatry, and family practice), our comparison of pay information
from studies of private sector physicians' pay and the pay of federal
physicians who were paid under titles 37 and 38 showed that private
sector physicians were generally paid more.  In other specialties
(e.g., thoracic surgery, radiology, and anesthesiology), private
sector physicians were paid considerably more, based on information
from these studies. 

Figure 1 shows for VA, DOD, Commissioned Corps, and private sector
physicians the median or average pay for selected medical specialties
(see table 6 for detailed dollar amounts). 

   Figure 1:  Federal and Private
   Sector Physicians' Pay by
   Selected Medical Specialties

   (See figure in printed
   edition.)

Note:  Average pay for title 5 physicians was not available by
specialty.  Average pay information was the only information
available for VA and Commissioned Corps physicians (Commissioned
Corps data were not available for general surgery).  For military
physicians, DOD estimated average amounts paid to physicians in each
specialty based on pay table data and program information on amounts
of special pay provided to physicians in these specialties.  Medians
are used for private sector pay. 

Source:  GAO analysis of information provided by VA, the Commissioned
Corps, DOD, and private sector studies of physicians' pay. 



                                     Table 6
                     
                      Federal and Private Sector Physicians'
                       Pay by Selected Medical Specialties

                                          Sulliv                          Milita
Physicians' specialty       MGMA    AMGA      an    HHCS      VA   Corps      ry
------------------------  ------  ------  ------  ------  ------  ------  ------
General surgery           $216,5  $211,7  $206,3  $170,0  $138,7     N/A  $100,9
                              60      35      60      00      10              60
Internal medicine         139,32  137,00  141,24  133,03  121,92  $100,8  82,400
                               0       0       5       0       5      50
Psychiatry                132,48  137,21  133,83  120,00  128,91  101,30  88,510
                               0       0       0       0       0       5
Family practice           129,15  129,41  136,37  120,00  117,41  97,930  84,575
                               0       5       0       0       0
--------------------------------------------------------------------------------
Note 1:  N/A indicates data were not available. 

Note 2:  Information on average pay was the only information
available for VA and Commissioned Corps physicians.  For military
physicians, DOD estimated average amounts paid to physicians in each
specialty based on pay table data and program information on amounts
of special pay provided to physicians in these specialties.  Medians
are used for private sector pay. 

Source:  GAO analysis of information provided by VA, the Commissioned
Corps, DOD, and private sector studies of physicians' pay. 

For other selected medical specialties--thoracic surgery, radiology,
and anesthesiology-- private sector physicians' pay greatly exceeded
the average pay of VA and military physicians.  Comparisons of
amounts paid to private sector physicians and VA and military
physicians for these selected specialties are shown in figure 2 (see
table 7 for detailed dollar amounts). 

   Figure 2:  Physicians' Pay for
   VA, Military, and Private
   Sector Physicians in Thoracic
   Surgery, Radiology, and
   Anesthesiology Specialties

   (See figure in printed
   edition.)

Note:  We did not present Commissioned Corps information because of
the small number of physicians in these specialties.  For military
physicians, DOD estimated average amounts paid to radiologists and
anesthesiologists based on pay table data and program information on
amounts of special pay provided to physicians in these specialties. 
VA amounts are averages, whereas medians are used for private sector
pay. 

Source:  GAO analysis of information provided by VA, DOD, and private
sector studies of physicians' pay. 



                                     Table 7
                     
                      Physicians' Pay for VA, Military, and
                      Private Sector Physicians in Thoracic
                      Surgery, Radiology, and Anesthesiology
                                   Specialties

Physicians'
specialty       MGMA        AMGA    Sullivan        HHCS          VA  Military\a
------------  ------  ----------  ----------  ----------  ----------  ----------
Thoracic      $281,2    $385,125    $325,290    $231,450    $150,035       N/A\b
 surgery          35
Radiology     247,50     231,705     216,335     160,680     149,160    $109,495
                   5
Anesthesiolo  240,66     218,000     177,150     165,800     142,905     105,765
 gy                5
--------------------------------------------------------------------------------
\a For military physicians, DOD estimated average amounts paid to
radiologists and anesthesiologists based on pay table data and
program information on amounts of special pay provided to physicians
in these specialties.  VA amounts are averages, whereas medians are
used for private sector pay. 

\b N/A indicates that data were not available because DOD groups its
thoracic surgeons with surgeons in other specialities. 

Source:  GAO analysis of information provided by VA, DOD, and private
sector studies of physicians' pay. 

In general, federal physicians' pay is limited by (1) amounts
provided under basic pay schedules, (2) maximum authorized special
payment amounts, and (3) legislation stating that total pay cannot
exceed specified executive pay levels.  Private sector physicians'
pay would not generally be subject to these types of constraints. 


--------------------
\9 Appendix II contains descriptions of these categories. 


   OTHER TYPES OF BENEFITS, PAY,
   AND ALLOWANCES
------------------------------------------------------------ Letter :6

Other compensation for which physicians may be eligible included (1)
nonwage compensation, such as health and retirement benefits; (2)
premium pay, such as overtime; (3) incentive pay for hazardous duty;
(3) other types of special pay, such as diving pay; (4) tax-free
allowances, such as subsistence and housing; and (5) miscellaneous
benefits, such as base exchange privileges. 

For the agencies that we reviewed, the cost of nonwage compensation
(retirement and health and life insurance benefits) ranged from about
19 percent of basic pay for HHS physicians paid under title 5 to
about 40 percent of basic pay for physicians in the military.  In the
private sector studies that we reviewed, comparable information on
nonwage compensation was generally not available for the physicians
studied. 

Some federal physicians paid under titles 5 and 37 also received
other types of pay that were unrelated to their classification as a
physician but related more to hours of duty or special skills
possessed.  For example, some HHS physicians paid under title 5
received overtime pay, which averaged $3,100 (see table I.4), and
some physicians in the military received aviation career incentive
pay averaging about $4,000 annually (see table I.5). 

In addition to nonwage compensation and these other types of pay,
most physicians in the military and the Commissioned Corps received
tax-free allowances, the most common of which were for housing and
subsistence.  Housing allowances averaged over $8,000 and subsistence
allowances averaged about $1,800.  Because these allowances were not
subject to federal income tax, military and Commissioned Corps
physicians also had an additional tax advantage.\10

Even though the amounts of these other types of benefits, premium and
incentive pays, and allowances were sizeable in some cases, we did
not include them in our primary analysis because the cost of some
benefits could not be readily quantified and because of the time
constraints for completing our analysis.  Appendix I contains
additional details on these other types of compensation. 


--------------------
\10 The amount of tax advantage received depends on family size and
the amount of basic pay.  For example, with a family of three, a
physician in the O-5 pay grade with 2 years of service with basic pay
of $39,809 would have a tax advantage of $2,101 and with 18 years in
the service and basic pay of $56,034 would have a tax advantage of
$4,630, according to January 1996 military compensation pay tables. 


   AGENCIES' ACTIONS AFFECTING
   PHYSICIANS' PAY
------------------------------------------------------------ Letter :7

We identified two recent actions that affect or have the potential to
affect physicians' pay.  One involved a delegation of the use of
certain title 38 personnel authorities to several agencies whose
physicians are paid under title 5.  The other involved VA's
exploration of the feasibility of recognizing physicians' performance
in establishing a new pay system. 

In November 1993, following an OPM study that identified problems in
recruiting and retaining individuals in health care occupations, OPM
delegated, under 5 U.S.C.  5371, the authority contained in certain
title 38 personnel provisions to HHS, DOD, VA,\11 and the Department
of Justice.  The provisions that were delegated related directly to
pay rates and systems, premium pay, position classification, and
hours of work.\12 The purpose of this delegation was to give these
departments additional flexibilities to maintain quality health-care
staffs.  As of May 1997, HHS was the only agency to have used this
expanded authority to provide special pay to its physicians. 
Information on how HHS used this title 38 pay authority showed that,
based on average pay, HHS physicians paid under title 38 earned
$17,825 more than HHS physicians receiving PCAs. 

According to an HHS official, HHS agencies' use of title 38 pay
authorities has enabled HHS to remain reasonably competitive with
salary levels in the private sector.  Another HHS official said that
budgetary constraints have limited the number of physicians who can
receive title 38 special pay and have forced HHS to concentrate on
positions for which recruitment and retention have historically been
difficult.  For example, the FDA has focused its efforts on providing
title 38 special pay to supervisors and team leaders. 

Another action that has the potential to affect physicians' pay
involved VA.  VA indicated that some thought was being given to
changing the manner in which its physicians are paid.  In 1995 and
1996, a task force appointed by VA's Under Secretary for Health met
to discuss the development of a new pay system for physicians and
dentists.  The task force's objectives were to design a pay system
that used a total salary concept that continued to consider local pay
markets along with a new incentive pay component to reward
exceptional performance and productivity. 

VA officials told us that, as of July 1997, the Veterans Health
Administration was continuing to examine issues dealing with types of
information available regarding local market pay and how to measure
and link clinical performance and total salaries.  Instead of
physicians being automatically entitled to special pay by virtue of
their length of service, geographic location, or medical specialty,
the system under discussion would consider the local market, an
individual's performance and experience, and other relevant factors
in determining physicians' pay.  VA officials also told us that,
because of the complexity of physicians' pay, modifications to the
present system--which would require legislative action--are in the
early stages of study. 


--------------------
\11 OPM's delegation to VA does not involve physicians' special pay
or other compensation for physicians. 

\12 OPM's delegation regarding special pay pertains only to
physicians at grades below the Senior Executive Service and Executive
Schedule levels. 


   AGENCIES' COMMENTS
------------------------------------------------------------ Letter :8

HHS and VA provided written comments on a draft of our report.  DOD's
Deputy Director for Manpower and Support, Health Services and
Readiness Support, Office of the Assistant Secretary of Defense for
Health Affairs, and OPM's Chief, Compensation Administration
Division, Office of Compensation Policy, provided oral comments on
our draft report on August 18 and 20, 1997, respectively.  DOD, OPM,
and VA said they generally agreed with the report's contents.  The
agencies' comments, which were essentially technical in nature or to
clarify points, have been incorporated where appropriate.  OMB was
unable to provide official comments on our draft report within the
timeframe we requested.  However, we discussed and resolved comments
of a technical nature with OMB staff familiar with physicians' pay
issues and made changes to the report where appropriate. 


---------------------------------------------------------- Letter :8.1

We are sending copies of this report to the Chairmen and Ranking
Minority Members of interested congressional committees; the
Secretaries of HHS, Defense, and VA; and the Directors of OPM and
OMB.  Copies will be made available to others on request. 

Major contributors to this report were Larry Endy, Ed Tasca, Wayne
Barrett, and Jessica Botsford.  Please contact me at (202) 512-9039
if you have any questions concerning this report. 

Sincerely yours,

Michael Brostek
Associate Director
Federal Management and
 Workforce Issues


ADDITIONAL ANALYSES OF FEDERAL AND
PRIVATE SECTOR PHYSICIANS'
COMPENSATION
=========================================================== Appendix I

In addition to the primary comparisons discussed in this report, we
developed additional analyses of physicians' compensation.  This
appendix presents average pay information, when it was available,
based on physicians' years of service and pay grades or position
types.\13 We also discuss other aspects of compensation in addition
to basic and special pay, including (1) employers' contributions to
the costs of physicians' retirement and health and life insurance
benefits--also referred to as nonwage compensation; (2) other types
of premium and incentive pay paid under titles 5 and 37 to some
physicians; and (3) tax-free allowances for subsistence, housing, and
other expenses paid under title 37 to most physicians in the military
and the Commissioned Corps. 


--------------------
\13 Because information was not available from the pay data provided,
we did not develop pay comparisons based on physicians' roles as
clinicians, researchers, teachers, or administrators. 


   FEDERAL PHYSICIANS' PAY BY
   YEARS OF SERVICE
--------------------------------------------------------- Appendix I:1

Consistent with previous comparisons in this report, VA and HHS
physicians receiving title 38 special pay were paid more than other
federal physicians based on their years of service.  For HHS
physicians paid under title 5 and Commissioned Corps physicians paid
under title 37, differences in pay narrowed as years of service
increased.  Average pay for HHS title 5 physicians and Commissioned
Corps physicians was nearly the same for physicians with more than 20
years of service--$118,650 and $119,145, respectively.  For military
physicians, information on amounts of special pay was not readily
available in the years-of-service groupings we requested.  Figure I.1
shows comparisons of average physicians' pay based on years of
service (see table I.1 for dollar amounts). 

   Figure I.1:  VA, HHS, and
   Commissioned Corps Average
   Physicians' Pay by Years of
   Service

   (See figure in printed
   edition.)

Source:  GAO analysis of information provided by VA and HHS. 



                               Table I.1
                
                VA, HHS, and Commissioned Corps Average
                  Physicians' Pay by Years of Service

                                          HHS with
                                    VA    title 38     HHS
                                 title     special   title  Commission
Years of experience                 38         pay       5    ed Corps
------------------------------  ------  ----------  ------  ----------
1 to 4                          $117,0     $98,535  $91,53     $63,270
                                    35                   5
5 to 9                          127,50     118,080  99,150      87,005
                                     0
10 to 19                        134,33     136,175  108,24      97,890
                                     0                   0
20 and more                     137,91     148,470  118,65     119,145
                                     0                   0
----------------------------------------------------------------------
Source:  GAO analysis of information provided by VA and HHS. 


   FEDERAL PHYSICIANS' PAY BY
   POSITION
--------------------------------------------------------- Appendix I:2

For executive-level pay,\14 the average pay for VA physicians
exceeded that of HHS title 5 physicians by $17,580, or about 12
percent.  The average pay for these HHS physicians exceeded the
average for Commissioned Corps physicians in O-7 and O-8 pay grades
(Admiral) by $10,455, or about 8 percent, and military physicians in
O-7, O-8, and O-9, pay grades (General) by $12,645, or about 10
percent. 

For staff-level pay, the average for VA physicians (first level
supervisors, "chief grade," and below) exceeded that of HHS title 5
physicians who were paid under the General Schedule by about 24
percent, or $30,405.  The average pay for military and Commissioned
Corps physicians was 39 and 24 percent less than the average for VA
physicians.  The average pay for HHS physicians was about the same as
the average for Commissioned Corps physicians and about 20 percent
more than the average for physicians in the military. 

Physicians' pay for military and Commissioned Corps physicians varied
considerably by pay grade.  Pay for Commissioned Corps physicians in
the O-3 pay grade averaged $39,030 and in the O-6 pay grade averaged
$118,845.  According to DOD officials, a large percentage of military
physicians at the O-3 level are in graduate medical education
programs in either internships or residency training.  These
physicians were not eligible for incentive or multiyear special pays
that averaged about $27,000 and were available to military physicians
in higher pay grades.  Figure I.2 shows physicians' pay by type of
position (see table I.2 for detailed dollar amounts). 

   Figure I.2 Average Federal
   Physicians' Pay by Position

   (See figure in printed
   edition.)

Source:  GAO analysis of pay data provided by federal agencies. 



                               Table I.2
                
                   Average Federal Physicians' Pay by
                                Position

                                    VA     HHS
                                 title   title  Commission    Military
Pay grade                           38       5    ed Corps    title 37
------------------------------  ------  ------  ----------  ----------
Executive                       $146,2  $128,6    $118,205  $116,015\a
                                    40      60
Staff                           128,21  97,810      97,265      78,160
                                     5
----------------------------------------------------------------------
\a For physicians at the O-7, O-8, and O-9 levels, GAO calculated
this amount from DOD payroll data on basic pay and DOD program
information on special pay. 

Source:  GAO analysis of information provided by federal agencies. 


--------------------
\14 Includes VA physicians in the "executive grade" and higher,
including Senior Executive Service and executive level equivalents. 
According to 38 U.S.C.7404(b)(2), VA officials in the executive grade
must hold the position of chief of staff at a hospital, medical
center, outpatient clinic (independent), or comparable position. 
Title 5 executives are generally those in the Senior Executive
Service or under the Executive Schedule. 


   OTHER COMPENSATION
--------------------------------------------------------- Appendix I:3

Federal physicians may also be eligible for other types of
compensation, such as nonwage compensation, incentive or premium pay,
or allowances.  In some cases, only small numbers of federal
physicians receive these benefits.  In the case of nonwage
compensation for both federal and private sector physicians, benefit
costs were not always quantified.  When they were quantified,
available estimates of benefit costs generally were not calculated in
a consistent fashion that permitted meaningful comparisons among
categories of physicians, either within the federal sector or between
the federal and private sectors.  We therefore did not include
information on these other benefits in our principal comparisons. 


      EMPLOYER-PROVIDED NONWAGE
      COMPENSATION
------------------------------------------------------- Appendix I:3.1

Nonwage compensation includes employers' retirement benefit
contributions and employers' shares of physicians' health and life
insurance costs.\15 Nonwage compensation paid by federal agencies on
behalf of their employees ranged from 19 to 40 percent of basic pay. 
Studies of private sector physicians that we reviewed did not contain
similar information on nonwage compensation.  However, a 1994
Department of Labor study of employee benefits showed that, for
white-collar professional workers in the private sector, the cost of
employer-provided nonwage compensation (i.e., health and life
insurance, retirement, social security, and workers' compensation
benefits) was about 23.4 percent of basic pay.  Federal physicians
paid under titles 5 and 38 are required to pay for a share of their
nonwage compensation.  Private sector organizations may also require
their physicians to contribute toward the costs of these benefits. 
Information on the costs of nonwage compensation that physicians
received under titles 5, 37, and 38 and according to private studies
follows. 

Title 5 Physicians:  Based on information from the HHS payroll
system, the government's costs for nonwage compensation averaged
about $16,480 or about 19 percent of basic pay for the HHS physicians
paid under title 5.  This amount included the government's share of
retirement benefit costs under the Civil Service Retirement System
(CSRS) or the Federal Employees Retirement System (FERS) as well as
the government's share of health and life insurance costs.  A more
general measure of indirect cost is contained in OMB Circular
A-76.\16 This circular states that in 1996 the standard cost factor
for federal civilian employees' retirement benefits was 23.7 percent,
for life insurance and health benefits it was 7.05 percent, and for
miscellaneous fringe benefits it was 1.7 percent. 

Title 38 Physicians:  According to a VA official, the total cost of
nonwage compensation for its employees was about 25 percent of basic
and special pay.  In 1996, average basic and special pay for VA
physicians was about $128,540.  Based on VA estimates, nonwage
compensation would be about $32,135 if these benefits averaged 25
percent of physicians' pay. 

The dollar value of nonwage compensation for VA physicians was higher
than the dollar value of these benefits for HHS physicians paid under
title 5.  Physicians paid under title 38 can include physicians'
special pay as part of basic pay in determining retirement annuities
under CSRS and FERS.  In contrast, PCAs earned by title 5 physicians
and special payments to physicians in the military and the
Commissioned Corps are not considered part of basic pay for
retirement benefit calculation purposes. 

Title 37 Physicians:  For fiscal year 1996, the DOD actuary estimated
the cost of military retirement benefits to be 32.9 percent of basic
pay.  Costs of other nonwage compensation for military personnel were
1.45 percent for medicare hospital insurance benefits and 6.2 percent
for old age, survivors, and disability insurance benefits on basic
pay up to $62,700.  Physicians in the military and the Commissioned
Corps and their dependents may receive free health care benefits in
military facilities, but DOD has not developed, in terms of basic
pay, information on the cost of providing these benefits. 

Physicians in the military and the Commissioned Corps also may
receive other benefits and privileges that are neither easily
quantified nor readily susceptible to comparison.  Examples of
several of these benefits include eligibility to purchase goods and
services at military base commissaries and exchanges at prices
generally lower than those charged by commercial facilities and
access to military service clubs and other DOD-sponsored recreational
facilities. 

Further, these physicians have the option of declaring a state of
residence, regardless of where they are actually stationed or the
length of time they spend in that state.  This can be of significant
value for those selecting residency in states with no personal income
taxes.  While these benefits and privileges can be of considerable
value to physicians in the military and the Commissioned Corps, we
did not attempt to estimate their comparative values or costs. 

Private Sector Physicians:  Information from studies of private
sector physicians showed that the organizations that were surveyed
also provided physicians with nonwage compensation.  Table I.3 shows
information on the types of benefits provided and the percentage of
survey respondents providing the benefit.  These studies did not
provide information on total employer costs of these benefits or on
the cost of these benefits as a percentage of basic pay. 



                               Table I.3
                
                   Types of Private Sector Employer-
                           Provided Benefits

                                       Private sector organizations
                                    ----------------------------------
                                                         Sullivan,
                                      Hospital and      Cotter, and
                                       Healthcare       Associates,
                                      Compensation      Incorporated
                                    Service (January   (January 1996
                                       1997 data)          data)
                                    ----------------  ----------------
                                          Percentage        Percentage
                                           providing         providing
Type of benefit                              benefit           benefit
----------------------------------  ----------------  ----------------
Retirement                                        \a                95
Defined benefit plan                              63                \b
Defined contribution plan                         81                \b
Group medical insurance                           99               100
Group life insurance                              97                99
----------------------------------------------------------------------
\a Total percentage providing retirement benefits not reported. 

\b Percentage receiving each type of retirement benefit not reported. 

Source:  Studies of private sector physicians' pay. 

In addition to the benefits shown in table I.3, other benefits for
which some organizations provided payment included vision care,
professional organizations' dues, continuing education expenses,
personal time off, and flexible benefit plans.\17 Federal agencies
may also pay educational and training expenses for their physicians. 

The HHCS study indicated that about 60 percent of the 179 participant
organizations that responded offered a "fixed" set of employee fringe
benefits, 32 percent offered a "flexible" or "cafeteria" set of
benefits, and 8 percent offered both fixed and flexible benefits. 
Flexible benefit or cafeteria plans are generally not available to
federal employees. 


--------------------
\15 For more information on employer-provided benefits, see Tax
Policy:  Effects of Changing the Tax Treatment of Fringe Benefits
(GAO/GGD-92-43, Apr.  7, 1992). 

\16 Circular A-76 establishes federal policy for the performance of
recurring commercial activities and provides guidance for determining
whether recurring commercial activities should be operated under
contract with commercial sources, in-house, or through interservice
support agreements. 

\17 Flexible or cafeteria benefit plans allow employees to choose
from a list of fringe benefits that best fit their families' needs. 
Benefits commonly offered by flexible benefit plans include medical
and dental insurance, life insurance, accidental death and disability
insurance, and long-term disability insurance. 


      PREMIUM, INCENTIVE, AND
      OTHER TYPES OF PAY
------------------------------------------------------- Appendix I:3.2

Some physicians paid under titles 5 and 37 also received premium,
incentive, or other types of pay based on factors such as hours of
duty, possession of special skills, performance, or working under
extreme conditions.  These other types of pay were not based on an
individual's occupation as a physician but were earnings based on the
above-mentioned circumstances.  For those physicians receiving these
types of pay, compensation was increased by amounts that ranged from
a few dollars to over $24,000.  Based on agency-provided information,
tables I.4 and I.5 list for physicians paid under titles 5 and 37 (1)
other types of pay; (2) numbers of physicians receiving the pay; (3)
average amounts received; and (4) where available, ranges of
compensation received. 

Title 5 Physicians:  Table I.4 contains information on other types of
pay earned by at least 50 HHS physicians. 



                               Table I.4
                
                   Other Types of Pay Received by HHS
                           Physicians (1996)

                                    Number       Average      Range of
                                 receiving        amount  compensation
Types of additional pay\a     compensation      received      received
----------------------------  ------------  ------------  ------------
Award                                  652        $1,610       $100 to
                                                               $13,565
Overtime                               330         3,100   5 to 21,865
Holiday                                145           585    5 to 3,780
Night                                   82         1,125    5 to 6,180
Uniform                                 63           240     15 to 415
Retention\b                             62        11,100        750 to
                                                                24,525
Sunday                                  58           850   40 to 4,935
----------------------------------------------------------------------
\a Physicians may receive more than one type of additional pay. 
Also, HHS physicians receiving special payments under title 38 cannot
earn premium pay that is paid under chapter 55 of title 5 (e.g.,
overtime pay, holiday premium pay, night pay differentials, and
Sunday premium pay). 

\b HHS's personnel manual states that physicians who receive PCAs may
also receive retention allowances.  The manual further states that
every effort must be made to ensure that they are authorized only in
extreme cases. 

Source:  GAO analysis of HHS payroll information. 

Physicians paid under title 5 may also be eligible for other
payments, such as recruitment bonuses, relocation allowances, and
certain cost-of-living allowances (COLA) that are not identified in
table I.4. 

Title 37 Physicians:  Other types of pay that physicians in the
military received are listed in table I.5. 



                               Table I.5
                
                   Examples of Other Pay Received by
                       Physicians in the Military

                                                        Average annual
                                            Number          amount
                                        receiving pay      received
                                        --------------  --------------
                                                   Air             Air
Types of pay                              Army   Force    Army   Force
--------------------------------------  ------  ------  ------  ------
Aviator career incentive                   189     502  $3,980  $4,270
Hostile fire                                98      95   1,800   1,800
Foreign language                             2     103     805   1,075
----------------------------------------------------------------------
Source:  GAO analysis of Army and Air Force pay data. 

Some physicians may be eligible to simultaneously receive more than
one type of incentive or special pay.  Unlike some title 5
physicians, physicians in the military and the Commissioned Corps do
not receive compensation for working overtime, at night, on Sundays,
or on holidays. 

Title 38 Physicians:  According to a VA official, VA full-time
physicians are considered to be on duty for 24 hours a day.  As such,
they are not eligible for premium pay, such as overtime and for work
on Sunday or at night.  VA physicians also do not receive
locality-based comparability payments under 5 U.S.C.  5304; however,
they may receive geographic location pay if they work in areas where
extraordinary recruitment or retention difficulties exist.  They may
also be eligible for recruitment bonuses and retention allowances
under 38 U.S.C.  7410. 


      ALLOWANCES FOR MILITARY AND
      COMMISSIONED CORPS
      PHYSICIANS
------------------------------------------------------- Appendix I:3.3

Physicians in the military and the Commissioned Corps may be entitled
to a variety of different allowances related to such elements as
subsistence, housing, family separation, and COLAs.  Table I.6 shows,
for these physicians, average annual allowances received and the
number of physicians receiving them.  Allowances are tax free and
generally vary depending on marital status, family size, and pay
grade. 



                                    Table I.6
                     
                       Allowances Received by Military and
                          Commissioned Corps Physicians

                                     Number receiving       Average allowance
                                        allowance                amounts
                                  ----------------------  ----------------------
                                             Air                     Air
Types of allowance                  Army   Force   Corps    Army   Force   Corps
--------------------------------  ------  ------  ------  ------  ------  ------
Basic housing                      4,085   3,611   1,443  $8,265  $8,355  $9,540
Basic subsistence\a                4,726   4,068   1,458   1,800   1,805   1,795
Overseas station-COLA                846     429     137   5,125   6,050   5,940
Overseas station-housing             215     229     N/A   8,950   5,740     N/A
Overseas station-other housing     1,037     904     N/A     680     450     N/A
Family separation                     96      51     N/A   1,330   1,910     N/A
Variable housing\b                 3,801   3,580   1,256   2,755   1,890   3,895
--------------------------------------------------------------------------------
Note:  N/A indicates data were not applicable. 

\a Differences in basic subsistence amounts were due to differences
in time periods for which the data was collected. 

\b Variable housing allowances supplement basic quarters allowances
for service members who reside in high-cost areas in the United
States. 

Source:  GAO analysis of Army, Air Force, and Commissioned Corps pay
data. 

Because allowances are not subject to federal income tax, physicians
in the military and the Commissioned Corps also receive a tax
advantage that can be expressed as the additional income that they
would have to receive in order to be left with the same net take-home
pay, if allowances were taxable.  Because many allowances vary by pay
grade and number of dependents, the tax advantage varies.  For
example, according to January 1996 military compensation pay tables,
the tax advantage for an officer in the O-4 pay grade ranged from
$1,889 to $3,813, depending on family size and years of service.  For
an officer in the O-6 pay grade, it ranged from $2,168 to $4,777. 


DESCRIPTIONS OF SPECIAL PAYMENT
PROVISIONS AND ROLES OF FEDERAL
PHYSICIANS
========================================================== Appendix II

In addition to basic pay, federal physicians may be entitled to
various special payments, depending on the laws under which they are
paid.  Each of the laws--title 5 for most civilian physicians in
federal agencies other than VA, title 38 for VA physicians and
selected title 5 physicians, and title 37 for physicians in the
military and the Commissioned Corps--spells out (1) requirements that
are to be met for physicians to receive special payments and (2)
dollar ranges for these payments.  Special payments may be provided
in varying amounts based on different factors, such as a physician's
years of service, medical specialty or category of service,
geographic location, or length-of-service agreement.  In general,
physicians who received special payments under titles 37 and 38
received more types and higher amounts of these payments than
physicians paid under title 5.  The following sections discuss these
special payment provisions and the roles of federal physicians paid
under these laws. 


   TYPES OF SPECIAL PAYMENTS TO
   PHYSICIANS
-------------------------------------------------------- Appendix II:1


      TITLE 5-PCAS
------------------------------------------------------ Appendix II:1.1

Federal physicians paid under title 5 may be eligible for PCAs if
agencies document significant recruitment and retention problems and
if physicians enter into a service agreement with their employing
agencies.  These agreements require physicians to complete periods of
service of 1 or 2 years. 

The maximum allowance is $14,000 per year for physicians with less
than 24 months of federal service and $20,000 for physicians with
more than 24 months of service.  While these are the maximum amounts
authorized by law, some agencies have established schedules that
limit PCAs based on the characterization of the positions in which
physicians serve.  For example, for physicians with more than 24
months of service, the maximum allowance is $10,000 for occupational
health physicians and for physicians performing disability
evaluations, according to HHS' personnel manual. 

PCAs are not considered basic pay for purposes of calculating premium
pay (e,g., overtime, night, and holiday pay), payments for
accumulated and accrued annual leave and severance pay, compensation
for work injuries, or retirement and life insurance benefits. 

Table II.1 shows the agencies employing the most physicians under
title 5 and the percentage of physicians receiving PCAs in fiscal
year 1996. 



                               Table II.1
                
                   PCAs by Agency (Fiscal Year 1996)

                                     Number of
                                    physicians
                                  eligible for  Physicians  Percentage
Federal departments and agencies          PCAs   with PCAs   with PCAs
--------------------------------  ------------  ----------  ----------
HHS                                      1,363       1,019          75
DOD                                        633         487          77
Justice                                    198         183          92
State                                       60          54          90
Other agencies (14)                        148          98          66
======================================================================
Total                                    2,402       1,841          77
----------------------------------------------------------------------
Source:  GAO analysis of OMB information. 

The number of physicians eligible for PCAs in the 14 other agencies
ranged from 1 to 35; 8 of these agencies employed fewer than 10
physicians.  Five of the 14 agencies did not provide PCAs to any of
their physicians.  Officials with the National Aeronautics and Space
Administration, with 27 eligible physicians, and the Tennessee Valley
Authority, with 4 eligible physicians, told us that PCAs were not
necessary to retain or recruit physicians in their agencies. 


      TITLE 38 SPECIAL PAYMENT
      PROVISIONS
------------------------------------------------------ Appendix II:1.2

Title 38 authorizes several different special payments for
physicians.  While most of the physicians receiving special payments
under title 38 are employed by VA, OPM has authorized agencies (HHS,
DOD, and the Department of Justice) that pay physicians under title 5
to pay selected physicians' special payments under title 38. 
Physicians receiving these payments are not eligible to receive PCAs. 
Under title 38, physicians may be eligible for one or more of the
following types of special payments. 

  -- Full-time status:  Physicians who have full-time status are
     entitled to a special payment of $9,000 annually. 

  -- Length of service:  Physicians are entitled to length of service
     awards that range from $4,000 for 2 to 4 years of service to
     $25,000 for 12 or more years of service.  VA has established a
     schedule for length of service pay, which is shown in table
     II.2. 



                               Table II.2
                
                   Length-of-Service and Special Pay
                  Amounts for VA Physicians Paid Under
                                Title 38

                   Length of service
--------------------------------------------------------
                                                But less   Special pay
At least                                            than        amount
------------------------------------------  ------------  ------------
2 years                                          3 years        $4,000
3 years                                          4 years         6,000
4 years                                          6 years         9,000
6 years                                          8 years        12,000
8 years                                         12 years        15,000
12 years                                        20 years        18,000
20 years                                        25 years        20,000
25 years                                                        25,000
----------------------------------------------------------------------
Source:  VA. 

  -- Scarce medical specialty:  Physicians serving in medical
     specialties for which there are extraordinary recruitment and
     retention difficulties may receive payments of up to $40,000. 
     Physicians serving in executive positions in VA's headquarters
     office are prohibited from receiving scarce specialty pay. 

  -- Responsibility pay:  Physicians serving in executive positions
     either in field offices or in VA's headquarters office may be
     eligible for amounts ranging from $4,500 for a service chief to
     $45,000 for the Under Secretary of Health, based on the specific
     position in which they serve. 

  -- Board certification:  Physicians are entitled to a special
     payment of $2,000 if they are board certified.  If they are
     certified in a subspecialty or secondary board, they are
     entitled to an additional $500. 

  -- Geographic location:  Physicians serving in specific geographic
     locations where extraordinary recruitment or retention
     difficulties exist are eligible for geographic location pay of
     up to $17,000 annually. 

  -- Exceptional qualifications:  VA's Under Secretary of Health may
     approve, on a case-by-case basis, special payments at an annual
     rate of not more than $15,000 for physicians with exceptional
     qualifications within a specialty. 


      TITLE 5 PHYSICIANS RECEIVING
      TITLE 38 PAY
------------------------------------------------------ Appendix II:1.3

HHS, DOD, and the Department of Justice, which pay physicians under
title 5, were authorized, under a delegation of title 38 pay
authority from OPM, to use the same categories of special payments to
physicians described in the previous section in paying their
physicians.  OPM delegated title 38 pay authority to these agencies
and VA\18 in November 1993 to provide them with added flexibilities
needed to maintain a quality health care staff.  HHS agencies began
using its delegated authority to make special payments to physicians
under title 38 in August and September 1995.  DOD has formalized a
plan for the title 38 special pay authority, but as of April 1997, it
had not used the authority to pay its physicians.  Justice has not
formalized a plan for using this authority.  On June 27, 1997, OPM
extended title 38 pay authority to HHS, DOD, and Justice through June
30, 2002. 

HHS guidelines for implementing OPM's delegation of authority provide
for almost identical special payment amounts using criteria similar
to those used by VA.  HHS limits special payments for length of
service to $18,000 compared with $25,000 for VA.  Also, by law (5
U.S.C.  5371(c)(1)), members of the Senior Executive Service are not
eligible for special payments under title 38. 


--------------------
\18 OPM's delegation agreement with VA expands the use of some of
VA's existing title 38 authorities.  It does not involve special
payments to physicians or other compensation for physicians. 


      TITLE 37 SPECIAL PAYMENT
      PROVISIONS
------------------------------------------------------ Appendix II:1.4

Under title 37, physicians in the military and Commissioned Corps
physicians are eligible for types of special payments for physicians
similar to those available to title 38 physicians.  Special payments
and the amounts authorized are discussed below. 

  -- Variable special pay:  Physicians in the military and
     Commissioned Corps physicians are entitled to variable special
     pay.  Variable special pay is paid monthly and ranges from
     $1,200 annually for interns to $12,000 annually for officers
     with 6 but less than 8 years of service.  After 8 years, this
     pay declines based on the theory that future retirement benefits
     and other types of special payments will serve as greater
     incentives for physicians to stay on active duty. 

  -- Board-certified special pay:  Physicians who are board-certified
     in their respective specialties are entitled to amounts ranging
     from $2,500 to $6,000 annually, based on their years of service. 
     Physicians with less than 10 years of service receive $2,500
     annually; physicians with 18 or more years of service receive
     $6,000 annually.  Board certified pay is paid monthly. 

  -- Additional special pay:  Physicians who sign an agreement to
     serve at least 1 additional year from the effective date of
     their service agreements are entitled to $15,000 annually, which
     is paid at the beginning of the 1-year period.  Physicians who
     are undergoing internships or initial residency programs do not
     qualify for additional special payments. 

  -- Multiyear special pay:  Physicians who are fully qualified in
     designated medical specialties are eligible to enter into
     written agreements to provide 2, 3, or 4 more years of service. 
     The duration of the agreement determines the amount payable. 
     Annual amounts ranging from $2,000 to $14,000 are payable upon
     acceptance of the agreement and on the anniversary of the
     agreement.  To receive multiyear special pay, physicians must
     have completed any service commitment incurred for medical
     education and training or completed 8 years of service.  In
     either case, these physicians must be below the pay grade of O-7
     (General or Admiral).  Every year, the Assistant Secretary of
     Defense for Health Affairs convenes a Triservice Flag Officer
     Review Board to determine the annual amount provided for each
     specialty, to be based primarily on the staffing level in each
     specialty community. 

In fiscal year 1996, physicians who signed 4-year agreements could
receive $14,000 for each year of the agreement in medical
specialties, such as family practice, orthopedic surgery, emergency
medicine, internal medicine, and urology.  Other medical specialties
received less.  Also, multiyear special pay was not available for all
specialists; for example, in fiscal year 1996, anesthesiologists and
physicians in the pediatric and internal medicine subspecialties were
not eligible to sign agreements for multiyear special pay under title
37. 

  -- Incentive special pay:  Physicians who sign an agreement to
     remain on active duty for at least 1 year and who are fully
     qualified in medical specialties designated as critical and
     practice in that specialty a substantial portion of the time or
     who meet other criteria related to their assignment may be
     authorized to receive up to $36,000 in incentive special pay. 
     Physicians must be in pay grade O-6 and below to receive this
     pay, which is a lump-sum payment at the beginning of the
     12-month period.  The Flag Officer Review Board annually
     determines the authorized amount of incentive special pay for
     each specialty. 


   ROLES OF FEDERAL PHYSICIANS
-------------------------------------------------------- Appendix II:2

Federal physicians serve in a variety of categories and medical
specialties, depending on the mission of the employing federal agency
and the needs of the population served.  The following sections
describe, by pay authority, the roles that these physicians fill in
their employing agencies. 


      TITLE 5 PHYSICIANS
------------------------------------------------------ Appendix II:2.1

Federal regulations related to PCAs (5 C.F.R 595) require heads of
agencies to establish, as a minimum, the following separate
categories of physicians for purposes of determining if there are
significant recruitment and retention problems. 

  -- Category 1:  Positions primarily involved in the practice of
     medicine or direct service to patients in hospitals, clinics,
     public health programs, diagnostic centers, and similar
     settings. 

  -- Category 2:  Positions primarily involved in the conduct of
     medical research and experimental work or the identification of
     causes or sources of diseases or disease outbreaks. 

  -- Category 3:  Positions primarily involved in the evaluation of
     physical fitness or the provision of initial treatment of
     on-the-job illness or injury. 

  -- Category 4:  Positions not described above, including positions
     involving disability evaluation and rating, training, or the
     administration of patient care or medical research and
     experimental programs. 

PCAs may be paid only to physicians serving in positions in
categories determined by the agency to have significant recruitment
and retention problems.  Table II.3 shows, for the agencies with the
most physicians being paid under title 5, the number of physicians in
each category and the number receiving PCAs. 



                                    Table II.3
                     
                       Number of Physicians by Category and
                     Number Receiving PCAs (Fiscal Year 1996)

                    Category 1     Category II     Category III    Category IV
                  --------------  --------------  --------------  --------------
                                                                  (Administrator
                                                                       s or
                   (Direct care                      (Fitness       disability
                    providers)    (Researchers)     examiners)      examiners)
                  --------------  --------------  --------------  --------------
Federal Agency    Number    PCAs  Number    PCAs  Number    PCAs  Number    PCAs
----------------  ------  ------  ------  ------  ------  ------  ------  ------
HHS                  404     343     813     532       0       0     146     144
DOD                  485     354      32      29     116     104       0       0
Justice              198     183       0       0       0       0       0       0
State                 51      45       0       0       0       0       9       9
Other                 31      26      33      15      18       7      66      50
================================================================================
Totals             1,169     951     878     576     134     111     221     203
--------------------------------------------------------------------------------
Source:  GAO analysis of OMB data. 

In addition to HHS physicians who were paid under title 5, some
physicians in HHS were eligible for special payments under title 38. 
In fiscal year 1996, HHS provided physicians' special payments under
title 38 to 294 physicians.  Most of these physicians were employed
in the Food and Drug Administration (FDA), Indian Health Service
(IHS), and NIH. 

Even though physicians in the federal government are paid under a
number of different pay plans, there is some commonality in the types
of positions they fill in the agencies for which they work. 

The following section illustrates the roles of federal physicians. 

Titles 5, 37, and 38 physicians in HHS:  HHS physicians may be paid
as civilians under title 5 and as Commissioned Corps personnel under
title 37.  In addition, some title 5 physicians received special
payments under title 38 as a result of the previously mentioned
delegation of authority.  Examples of physicians' roles in the HHS
agencies that employ the most physicians are listed as follows: 

  -- FDA:  Approximately 95 percent of FDA's physicians are involved
     in researching and evaluating the clinical research data related
     to technology assessment, investigational studies, or marketing
     of medical/patient care services or products.  According to
     OMB's annual report on PCAs, FDA competes with pharmaceutical
     companies for physicians qualified to support the regulation of
     food, prescription and over-the-counter drugs, and medical
     devices. 

  -- NIH:  NIH physicians are involved in intramural medical
     research, extramural and collaborative research, or the
     administration of these programs.  NIH competes with the
     academic community and with private sector pharmaceutical firms
     for physicians with outstanding research skills. 

  -- IHS:  IHS provides a comprehensive health services delivery
     system, including hospital and ambulatory medical care and
     prevention and rehabilitation services, for American Indians and
     Alaska Natives.  Much of the population served by IHS is
     scattered over long distances and in remote areas.  IHS
     physicians are paid as civil servants under title 5 or as
     Commissioned Corps officers under title 37.  IHS has 914
     physicians and administers 37 hospitals and numerous health
     centers. 

  -- Centers for Disease Control (CDC):  Physicians at CDC provide
     leadership and direction in areas such as the prevention of
     infectious and chronic diseases, environmental health,
     occupational safety, international health, epidemiologic and
     laboratory research, data analysis and information management,
     and health promotion. 

Title 38 physicians at VA:  According to VA payroll system data, VA
had over 7,300 full-time physicians that had been employed for at
least 1 year, as of December 1996.  VA physicians serve in the
largest federal medical-care delivery system in the United States,
providing care to over 2.9 million patients in 1996.  These
physicians have training in numerous specialties and provide
inpatient and outpatient hospital subacute, rehabilitative and
psychiatric care, and residential and nursing-home care.  In addition
to providing patient care, numerous VA physicians are involved in
administering its facilities; conducting basic, clinical,
epidemiological, and behavioral research; and training medical
residents and students. 

Title 37 Commissioned Corps physicians:  Commissioned Corps payroll
data indicated that, as of December 1996, the Corps had over 1,450
full-time physicians who had been on duty for at least 1 year. 
Approximately 1,210 or 80 percent of these physicians were with the
following HHS agencies:  NIH (473), IHS (337), CDC (331), and FDA
(69).  Other Corps physicians either were with the remaining HHS
agencies or were detailed to such other federal agencies as the
Bureau of Prisons and the Coast Guard.  In a 1996 report on the
Commissioned Corps,\19 we noted that Commissioned Corps officers and
federal civilian employees often had similar duties and
some--physicians, nurses, and pharmacists--had identical duties. 

Title 37 military physicians:  As of September, 30, 1996, the Army,
Navy, and Air Force had about 13,000 military physicians.  About 12
percent of these physicians had graduated from the Uniformed Services
University of the Health Sciences, a 4-year, tuition free medical
school established by DOD in response to the Department's need to
attract and retain physicians.  About 80 percent of the 13,000
physicians received financial assistance for their medical education
in civilian medical schools under DOD's Health Professions
Scholarship Program.  The remaining physicians were brought into the
military through direct accession. 

A wide range of medical specialties are needed to support operational
forces during times of war and other military operations and to
maintain and sustain the well-being of the fighting forces in
preparation for war.  Military physicians also provide health care
services to nonactive duty beneficiaries and to the dependents of
active and nonactive duty personnel.  Furthermore, military
physicians also contribute to research efforts conducted in areas
such as Acquired Immune Deficiency Syndrome, breast cancer, and blood
research.  As of September 1996, of the 13,000 DOD physicians, over
1,000 were serving internships, and about 2,900 were in specialty
training programs. 

Differences exist between military physicians paid under title 37 and
DOD civilian physicians paid under title 5.  According to DOD
officials, the DOD civil service system is structured to hire
physicians primarily at the GS-13/14/15 levels where experience
requirements and pay are significantly higher than they are for
military physicians at the O-3 and O-4 levels (approximately 70
percent of the military physicians).  The civil service does not have
a significant attrition rate when compared with the attrition rate of
junior military physicians.  The result of the different employment
situations is that most civilian physicians are employed at grade
levels comparable with military pay grades O-5 and O-6. 


--------------------
\19 Federal Personnel:  Issues on the Need for the Public Health
Service's Commissioned Corps (GAO/GGD-96-55, May 7, 1996). 


OBJECTIVES, SCOPE, AND METHODOLOGY
========================================================= Appendix III

Because the authority to enter agreements to pay PCAs is due to
expire on September 30, 1997, Representative Constance A.  Morella
requested a report on federal and private sector physicians' pay and
benefits.  Following discussions with her office, we agreed that our
principal objectives would be to (1) compare amounts paid to federal
physicians under title 5 to amounts paid under other sections of the
U.S.  Code with each other and with amounts paid to private sector
physicians, (2) determine what other types of pay and benefits
federally employed physicians receive, and (3) identify ongoing
agency efforts that have the potential for affecting federal
physicians' pay. 

To compare physicians' pay, we obtained and analyzed information on
physicians' basic pay and on any special payments that were available
only to physicians.  For purposes of this report, basic pay means a
rate of pay established under titles 5, 22, 37, or 38, including a
special salary rate under 5 U.S.C.  5305 (or similar authority) and a
locality-adjusted rate of pay under 5 U.S.C.  5304.  On the basis of
our preliminary work, we agreed to obtain physicians' pay and benefit
information for full-time federal physicians paid under title 5, most
of whom were with HHS or DOD; physicians with the Public Health
Service's Commissioned Corps or on military duty and paid under title
37; physicians with VA and paid under title 38; and title 5
physicians with HHS who received special payments under title 38.  We
also reviewed federal statutes and regulations on special pay that is
available only to physicians, for information on the various types of
special pay that physicians could receive. 

HHS, VA, and the Commissioned Corps provided us with actual
annualized pay data for full-time federal physicians with over 1 year
of service for the 12-month period ending December 1996.  Payroll
information for military physicians was obtained from Defense Finance
and Accounting Service pay centers for the Army and Air Force.  Army
and Air Force information was for the 12-month periods ending January
and March 1997, respectively.  The same comparable data used for the
Army and Air Force could not be obtained from the Navy pay and
personnel system.  According to DOD officials, because all three
military departments use the same pay rates, Army and Air Force data
provide a fairly accurate representation of pay for military
physicians.  Unless reported separately, amounts and averages for DOD
military physicians were based on combined information from the
Army's and Air Force's payroll systems.  According to data from the
Defense Manpower Data Center, as of September 1996, of the 13,051
physicians in the military, 8,955 were in the Army and Air Force. 
From the information provided by the Army and Air Force, we could not
determine median pay amounts or identify amounts paid at the 25th and
75th percentile for military physicians.  We did not independently
verify the accuracy of any pay data we obtained. 

DOD's Directorate of Compensation prepares extensive pay-related
information in the form of pay tables for all military personnel. 
These tables show for each pay grade, longevity step, and family
size, information such as basic pay, quarters and subsistence
allowances, and Social Security and federal income tax withholdings. 
Also, DOD health affairs staff have developed information showing
estimated amounts of special pay that military physicians in various
pay grades are likely to earn on an annual basis.  This information,
together with staffing data, can be used to estimate amounts paid to
DOD's military physicians. 

We sought actual rather than estimated payroll data from all agencies
for our primary analyses because these data would more accurately
reflect the pay of physicians.  We also sought actual data to avoid
the potential difficulty of comparing data among agencies that used
different estimating methodologies or of comparing estimated and
actual data provided by these agencies.  However, actual pay data in
the formats and timeframes we specified were not always readily
available. 

For information on DOD physicians paid under title 5, DOD program
officials for the Army and Navy provided us with estimated annualized
pay data based on information for an April 1997 pay period, which was
multiplied by 26--the number of pay periods in 1 year.  The Air Force
obtained annual physicians' pay data from its personnel data system. 
We used the data provided to avoid the additional time that would
have been involved in collecting actual pay data for these physicians
from multiple pay centers. 

For pay and benefits data for private sector physicians, we
identified physician compensation studies listed in Modern
Healthcare.\20 From the studies listed and a discussion with the
author of the above-mentioned article, we judgmentally selected and
purchased four studies that contained information on physicians
employed primarily in group practices, HMOs, and hospitals.  We
selected these studies because they contained information on (1)
physicians practicing in settings that were similar to those in which
federal physicians practiced, rather than information on physicians
operating as sole practitioners and (2) amounts paid to physicians as
salary and direct compensation, rather than as net income.  Because
these studies did not contain information on the median pay of all
physicians surveyed, we were unable to make across-the-board
comparisons between federal physicians' pay and private sector
physicians' pay.  However, these studies contained information on
median pay for physicians in selected medical specialties.  Where
possible, we compared the pay of VA, Commissioned Corps, and military
physicians with the pay of private sector physicians in the following
medical specialties--general surgery, internal medicine, psychiatry,
and family practice.  These were medical specialties where large
numbers of federal and private sector physicians practiced. 

The organizations that prepared these pay surveys have been
conducting physician pay studies from 4 to 21 years.  We did not
independently verify the data shown in these studies.  Information on
the scope of these studies is shown in table III.1. 



                                   Table III.1
                     
                      Information on Private Sector Studies

                                               Number of
                            Time   Number of     medical      Types of
                          period  physicians  specialtie      organizations
Study publisher          covered     covered   s covered      responding
--------------------  ----------  ----------  ----------  --  ------------------
Hospital &                  1996      12,676          42      324 hospitals,
 Healthcare                                                    group practice
 Compensation                                                  facilities, and
 Service\a                                                     HMOs
American Medical            1995      23,280          69      272 group
 Group Association                                             practices
Medical Group             1995\b      28,928          57      1,380 group
 Management                                                    practices
 Association
Sullivan, Cotter and        1995      14,000          94      192 hospitals,
 Associates,                                                   group practices,
 Incorporated                                                  and HMOs
--------------------------------------------------------------------------------
\a The HHCS study contained information on government and
nongovernment physicians.  We used the information on nongovernment
physicians. 

\b In some cases, information was for a more recently completed
12-month period. 

Source:  Private sector studies indicated. 

The preparers of two of these studies cautioned users of their
reports that the data provided by responding medical practices might
not be representative of all physicians or all medical groups because
the data were not based on a random sample of medical groups.  Two of
these preparers also recommended the use of medians in evaluating
physicians' pay, because the median is not subject to the distortion
that may occur in the mean (average) when extremely high or low
values are included in the data set.  We therefore used medians when
presenting private sector data.  However, we used averages in our
analyses of federal data because median pay was not available for all
federal physicians' groups we compared.  Also, in most cases, the
averages differed only slightly from the medians. 

To determine other types of pay and benefits received by federal
physicians, we reviewed (1) federal statutes and regulations on pay
and benefits that physicians could receive in addition to their basic
and special pay and (2) actual pay information provided by the
agencies reviewed.  We also asked these agencies for information on
the cost of other compensation that the government paid for, either
in whole or in part, but which was not included in physicians' pay. 
For example, employer costs include amounts paid for Social Security
and other federal retirement benefits and for the government's share
of costs for employees' health and life insurance benefits.  After
receiving the data from these agencies, and depending on how the
agencies formatted the data, we made additional calculations or
reformatted the data to make it as consistent as possible. 

Regarding the objective to identify ongoing agency efforts that could
potentially affect physicians' pay, we asked agency officials if they
were involved in activities that had the potential for affecting
physicians' pay. 

In addition to the limitations indicated above: 

  -- We did not make a determination on whether PCAs should be
     increased or whether there should be a minimum comparability
     allowance because we did not collect and compare information on
     such factors as (1) physicians' duties and responsibilities, (2)
     amounts of supervision physicians either received or provided,
     and (3) actual retention and recruitment concerns experienced. 

  -- The military service pay centers for the Army and Air Force
     provided us with total amounts of basic pay, special pay for
     physicians, incentive pay, and allowances.  From this
     information, we could calculate averages but could not determine
     median or percentile pay. 

  -- Because of the small numbers of physicians involved and the
     specialized reasons for which they were hired, we did not
     compare pay and benefit data for physicians employed by the
     Uniformed Services University of the Health Sciences under 10
     U.S.C.  2113 (f)(1) or in the Senior Biomedical Research
     Services under 42 U.S.C.  237. 

We requested comments on a draft of this report from the Secretaries
of HHS, Defense, and VA; and the Directors of OPM and OMB.  Written
comments from HHS and VA and oral comments from DOD and OPM were
incorporated in the report, where appropriate.  Similarly, we
incorporated comments from OMB staff familiar with physicians' pay
issues. 

We did our work in Washington, D.C., from December 1996 to August
1997 in accordance with generally accepted government auditing
standards. 


--------------------
\20 Modern Healthcare, July 15, 1996. 


NUMBER OF FULL-TIME FEDERAL
PHYSICIANS (SEPTEMBER 1996)
========================================================== Appendix IV

Federal physicians                                              Number
--------------------------------------------------------------  ------
Military\a                                                      13,051
Veterans Affairs\b                                               8,048
Commissioned Corps\c                                             1,594
Other government physicians\d                                    2,770
======================================================================
Total                                                           25,463
----------------------------------------------------------------------
Note:  Numbers of physicians in this table do not correspond to those
used as the bases for analysis in other sections of this report.  Our
analyses generally were based on physicians that had 12 months of
service during the year. 

\a Physicians in the military (Army, Navy, and Air Force) and paid
under title 37. 

\b Almost all VA physicians are paid under title 38.  A few are paid
under title 5. 

\c Information is for December 1996.  Corps physicians are paid under
title 37. 

\d Most of these physicians are paid under title 5 and are with HHS
or DOD. 

Source:  OPM's Central Personnel Data File, Defense Manpower Data
Center, and the Commissioned Corps. 


*** End of document. ***