“Particularly for whoever is subsidizing that shortfall, whether it’s a hospital employing doctors or an outsourced group employing the doctors but requiring a large subsidy from the hospital because the doctors are not seeing enough patient flow to pay their salary and benefits,” Taylor says.
More than 89% of HMGs rely on their host hospitals for financial support, according to the new data. The median support is $156,063 per full-time employee (FTE), which would total $1 million at just over seven FTEs. As healthcare reform progresses and hospitals’ budgets are increasingly burdened, Taylor says that pressure for hospitalists to generate enough revenue to cover their own salaries will grow. That sets up a likely showdown between hospitalists and their institutions; SOHM 2014 reported that just 6% of HMGs received enough income from professional fee revenue to cover expenses.
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Table 1. Median Compensation for Non-Academic Adult Hospitalists
SOURCE: State of Hospital Medicine report, 2014
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Table 2. Median Collection-to-Work RVUs
SOURCE: State of Hospital Medicine report, 2014
“Some productivity element in compensation plans, we believe, and I believe personally, is important,” Taylor says, later adding: “We already have a physician shortage and a shortage of people to see all these patients. It’s exacerbated by two things: lack of productivity and shift-model scheduling.”
To wit, IPC pays lower base salaries but provides bonuses tied to productivity and quality metrics. The average IPC hospitalist, Taylor says, earned more than $290,000 last year, nearly 15% above the median figure in the SOHM report. Between 30%-40% of that compensation, however, was earned via bonus tied to both “productivity and clinical achievement.”
Taylor, an outspoken advocate for moving away from the seven-on/seven-off scheduling model popular throughout hospital medicine, ties some of his doctors’ higher compensation to his firm’s preference for avoiding that schedule. But he’s not surprised the new report shows that 53.8% of responding HMGs use the model, up from 41.9% in 2012.
“It will be interesting to see what the data shows over the next three or four years,” he says, “if stipends, as we believe we are seeing, come under pressure and hospitals are doing more outsourcing.”
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Table 3. Median RVUs
SOURCE: State of Hospital Medicine report, 2014
The PCP Link
Industry leaders use the information in the biennial reports to gauge where the specialty stands in the overall healthcare spectrum. Dea Robinson, MA, FACMPE, CPC, director of consulting for MGMA Health Care Consulting Group, says that the growth of hospital medicine (HM) compensation is tied to that of primary care physicians (PCPs).
“I don’t think we can look at hospitalists without looking at primary care, because it’s really an extension of primary care,” says Robinson, a member of SHM’s Practice Management Committee. “As primary care compensation increases, hospitalists’ compensation might increase as well. And with the focus on patient-centered medical homes, which is basically primary care centered, that might very well be part of the driver in the future of seeing hospitalists grow.”
While facing a well-known physician shortage, primary care’s compensation growth also lags behind HM. For example, median compensation for hospitalists rose 8%; it increased 5.5% for PCPs.
“When it comes to growth of the two individual industries, I think they are connected in some way,” she adds. “But in terms of the compensation, now we’re starting to see different codes that hospitalists are able to use but that primary care used to use exclusively. So, you really see more of an extension and a collaboration between true primary care and hospitalists.”