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). 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. As we agreed with you, our principal objectives were to (1) compare amounts paid 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, 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. 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. 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. 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. 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. This skews the presentation of “average salaries” of military physicians to relatively low amounts. 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. 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. 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. 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 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. 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. 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). 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).