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MGMA: Bonus Incentives Boost Hospitalists' Productivity

Christopher Cheney, for HealthLeaders Media, October 6, 2010

We learned the principles of economics in our youthful days at the lemonade stand; for every cup of lemonade we sold, we earned more money.

The State of Hospital Medicine: 2010 Report Based on 2009 Data explains that, supplemented with incentives, hospitalists perform more work and earn higher compensation even if they start with a lower fixed base salary.

"I think what the survey did—that interpretation—it confirms human nature. You have someone who is being incentivized more, they will produce more," says William "Tex" Landis, MD, FHM, chair of Society of Hospital Medicine (SHM)'s practice analysis committee. "If you have a need to have more productivity in your program, that might be a way to accomplish that," he adds.

Link between compensation and productivity

As the first joint survey between the Medical Group Management Association and SHM, this report combines MGMA's data analysis tools with SHM's active membership to provide compensation and productivity information from hospital medicine groups and individual hospitalists.  

Researchers surveyed 443 hospital medicine groups that represent 4,211 hospitalists. They found that the median compensation is $215,000 for internal medicine hospitalists, higher than in previous years by SHM's data.

Interestingly, the survey showed that the lower the base salary, the higher the productivity hospitalists performed because of bonus incentives. Adult hospitalists whose fixed base salary is 50% or less of their compensation reported the highest median work of 5,407 work relative value units (wRVUs). Those whose base salary is part of  of their compensation (51-70%) performed a lower median of 4,591 wRVUs. Those whose base salary is 71-90% of their compensation performed a median of 3,859 wRVUs. And those whose base salary made up almost all of their overall compensation (91-100%) only performed a median of 3,571 wRVUs.

Wary of the numbers

However, survey researchers caution that surveys should not be interpreted like scripture. The national median wRVUs is 4,107, with hospitalists' productivity ranging on both ends of the spectrum, some more, some less.

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