Skip to main content

Getting Hospitalist Compensation Right

 |  By kminich-pourshadi@healthleadersmedia.com  
   February 07, 2011

Like a baseball team banking on a designated hitter, many healthcare organizations are looking to hospitalists to step up to the plate and come out swinging. As hospitalist continue to see steady increases in their compensation, hospital CFOs should assess how they compensate these players to ensure they are getting the best return on their investment.  

In the last few years, the need for hospitalists has increased exponentially in both demand and popularity. Traditional internists are trying to manage a full-time office practices in addition to rounding on patients in the hospital, and what these doctors are finding is all that leaves them little time for much else. Many of these doctors are turning to their hospitals for a solution that allows them to stay in their offices to tend to those patients. This has resulted in a split role: the outpatient internist and the inpatient hospitalist.

There's little doubt that hospital medicine physicians offer welcome relief for internists interested in staying in their offices, but how do you determine how to compensate them appropriately to ensure they will continue to generate their worth in reimbursement and in stellar patient care and quality?

Alpesh Amin, MD, MBA, professor and chairman of the department of medicine and executive director of the hospitalist program at the University of California Irvine Medical Center in Irvine, CA offers his thoughts on three areas financial leaders must consider:

1. How to Employ and Pay—Hospitals predominantly opt for direct employment versus contract scenarios. When designing a compensation structure you must consider how your competitors are structuring their plans, not just the dollars that are being offered. In general, the independent private practice tends to use a fee-for-service model while those who are hospital-employed are most inclined to receive a base salary plus incentives that reward quality, participation, and project work.

"When you contract with someone, there isn't that ownership that you get from employment," he says. "Plus, they'll do the unassigned care, sit on committees and they'll serve as leaders in your institution. I see immense amount of value with people employing their own hospitalists."


Moreover, Amin says, when hospitals or health systems contract with a group, the physicians may not strive to improve the institution overall.

2. Compensation Trends—While the model you select is important, naturally the salary is also important. Be aware that salaries for these physicians are on the rise and your compensation structure needs to acknowledge that, else you risk losing these docs going to your competitors. The Medical Group Management Association's (MGMA) annual survey showed the median compensation for internal medicine hospitalists was on the upswing, landing at $215,000 per year not including benefits.

That salary was a whopping $32,000 increase over the median compensation these physicians earned just one year prior ($183,900) and a $44,000 bump from the median salary they earned just five years ago. Additionally family practice hospitalists received a median compensation of $218,066 and pediatric hospitalists reported compensation of $160,038 (note, the report also indicates compensation varies based on geographic location, teaching status and practice size).


When establishing a compensation model for hospitalists, Amin suggests hospital leaders look at more than work relative value units (wRVUs). "I don't think it's the best way to assess a hospitalist's performance, because they can't really control what comes in the door—some days they have 15 patients and other days it's 12," he says.

Amin suggests looking at the group as a whole and determining what the approximate number of patients is for the group. Then consider other responsibilities that you want them to tackle, such as teaching, committees or leadership.

"Put a package together that not only looks at wRVUs but also incentivizes them to do better coding and billing," he says.

3. Other Motivators. The longer and more established a hospitalist program is, the more inclined a hospital or system is to see their quality, service, length of stay and patient satisfaction metrics improve. That's even truer, when your compensation plans include the quality measures that you want these physicians to strive for. And that's something that should hold true, regardless of whether they are employed or contracted with your facility. These doctors should coordinate the care with a patient's other internal caregivers as well as reach out to the patients primary care docs.

"Quality, efficiency, and throughput need to be a priority, don't just look at how much they can generate," says Amin. "Consider that hospitalists also improve patient satisfaction and can open up a bed sooner and move a patient out sooner because they are at the hospital all the time, not just for rounds."

Unquestionably, hospitalists are a part of the future of every hospital and health system in the country. However, how you approach having them as part of your system and how much you pay them is up to healthcare leaders. With hospitalists stepping up to the plate to fill in where other physicians leave off, with a little compensation planning, hospitals and health systems may find that they get a triple play every time: improved quality, better patient satisfaction and at a minimal cost.

Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
Twitter

Tagged Under:


Get the latest on healthcare leadership in your inbox.