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.
Researchers also caution that every program is different. Although the survey can provide benchmarks, it's not the letter of the law. Compensation and productivity may differ depending on the number of hospitalists, patient volume, location, and other variables.
John Nelson, MD, FACP, FHM, of the SHM practice analysis committee says in the survey, "Remember that this data does not reflect the position of SHM or MGMA regarding the right, optimal, or appropriate standards for hospitals practice."
When asked if there is one best model, Landis says, "I don't think you can say there's one best compensation method. It's not one size fits all. Different programs have to look at their situation, their local situation, and what they're trying to accomplish with their program."
Another thing to keep in mind is that this year's report excludes academic hospitalists from the data. As a replacement for SHM's biannual report of hospitalist data, the current report only focuses on nonacademic hospitalists, whereas previous editions of SHM surveys include both populations.
"We had very little participation of our academic members in this report, as it should be," said Landis. However, MGMA and SHM plan to release another survey that focuses on academic hospitalists, according to Landis. "We'll have another report upcoming in six months from now that'll have even more data and allows [us] to have even better information for our academic colleagues," he says.
Finally, Landis said, "Not all of the value of hospitalists to a health system is in productivity." A lot of the value that hospitalists provide isn't simply wRVUs, but the work that they do, such as process improvements that aren't always measured in productivity metrics, he said. For example, lowering the number of complications from blood stream infections doesn't show up as an RVU but is extremely valuable.
"The purpose for putting a lot of work into this [report] is to help patients," said Landis. "That's what it's all about. We can't sustain a situation where providers are being overpaid, compensated for work that is not valued or not being done, but we also can't have the other situation either, where they are underpaid and underappreciated. We need to get hospitalist programs the right size for productivity and compensation," he says.
Karen M. Cheung is associate editor at HCPro, Inc., contributing writer for HealthLeaders Media, and blogger for www.MedicalStaffLeader.com. She can be contacted atkcheung@hcpro.com.
For every 100 physicians, there are 95 medical lawsuits, according to a report from the American Medical Association. With nearly an overall average of one liability claim per physician, the report calls for tort reform for lower healthcare costs.
Why is it that physicians, at some point in their careers, will face the dreaded 'L'-word—lawsuit? What factors might make a physician likely to face a malpractice claim?
The report gathers data from more than 5,800 physicians in 42 specialties between 2007 and 2008. The report indicates that some physicians face medical liability claims more often than others. In reality, only 42% of all physicians are sued during their career. That means, 22% of physicians are sued more than once.
Despite the overwhelming statistics on overall claim incidence, a lawsuit is not as common as it seems.
"?In any given year, being sued is a rare event. Only 5% of physicians had claims filed against them in that time frame. Over the length of a career, however, claims are much more common," states the report.
Physicians might see more lawsuits because the longer they are in practice, they have more time and, therefore, greater exposure to malpractice claims. For instance, older physicians are more likely to face a claim because they are in practice longer than younger physicians; nearly 61% of physicians age 55 and over have ever been sued.
Along with age, claim frequency varied by gender, specialty, and practice ownership. For example, male physicians are twice as likely to be sued more than women. There could be a number of reasons of why men face malpractice claims more often then women. Men have traditionally been the medical workforce longer and work more hours per week than women; therefore, men have a longer time to accumulate claims, according to the report. Male physicians are also more often practice owners, compared to women; practice owners see more claims than nonpractice owners. Men also tend to specialize in general surgery and obstetrics/gynecology (OB/GYN), two the highest accumulated incidence of lawsuits of all the specialties.
About 70% of both general surgeons and OB/GYNs are sued. Pediatricians (27%) and psychiatrists (22%) were the least likely to be sued.
Does a claim = a medical error?
"Claim frequency should not be used as an estimate of the error rate or malpractice rate in medicine," states the report.
Most claims (65%) are dropped, dismissed, or withdrawn. Another 25.7% of suits are settled out of court, and 4.5% were decided using an alternative method. Five percent went to trial; in those cases, 90% of the time, the physician won.
One reason why 22% of physicians are sued twice or more is that practice owners are more often sued than nonpractice owners. Known as the doctrine of respondeat superior, the employer of a practice can be held accountable for a tort even though the claim stems from the care provided by the employee. For example, if an employed physician was accused of medical malpractice, the practice owner could be sued. That means, one physician owner could rack up more malpractice claims than other physicians without necessarily committing more medical errors.
Costs of claims
Even though most claims are dropped, lawsuits do not go without financial consequences. The costs of indemnity payments can range from $22,000 for dropped or dismissed claims to $100,000 for those claims that go to trial.
"This litigious climate hurts patients' access to physician care at a time when the nation is working to reduce unnecessary healthcare costs," said AMA immediate past-President J. James Rohack, MD, in a statement to HealthLeaders Media.
The AMA, whose position is comprehensive medical liability reform on state and federal levels, supports a cap on damages, according to Rohack.
"The findings in this report validate the need for national and state medical liability reform to rein in our out-of-control system where lawsuits are a matter of when, not if, for physicians," Rohack said.
Karen M. Cheung is associate editor at HCPro, Inc., contributing writer for HealthLeaders Media, and blogger for www.MedicalStaffLeader.com. She can be contacted atkcheung@hcpro.com.
How much does an overnight stay in the ICU cost? $750? $6,000? Haven't got a clue? Many hospitalists don't know either. The cost of an ICU bed per night is $1,107, according to a recent study of two Washington hospitals. The $750-$6,000 range was what physicians at those facilities guessed.
Even though proponents of the hospitalist model have long claimed that hospitalists cut costs, hospitalists are unaware of the actual costs of care to inpatients, according to “Hospitalists’ awareness of patient charges associated with inpatient care,” published in the May/June issue of the Journal of Hospital Medicine. The study indicated that, in some cases, hospitalists were off by thousands of dollars in their estimates of how much tests and procedures cost the patients.
The guessing game
Researchers from the Internal Medicine Residency Faculty Group in Spokane, an affiliate of the University of Washington, asked hospitalists how much a hypothetical unadjusted self-paying patient would be billed for commonly used services, procedures, tests, and physician charges. Out of the 26 completed hospitalist surveys, researchers found that only a tenth of them were within a 10% accuracy rate.
“Their guesses were not very close, in general, to the so-called ‘true price’,” says Jeremy D. Graham, MA, DO, internal medicine residency Spokane faculty, clinical assistant professor of medicine at the University of Washington School of Medicine, and lead author of the study.
Hospitalists could generally distinguish which services were more expensive relative to each other but could not pinpoint a correct price. For example, they knew that a CT scan was more expensive than a chest x-ray, listing them in the correct cost order. But when asked to name a price for a CT scan, hospitalists estimated anywhere from $150 to $1,800; the price of a CT scan is actually $2,204.
The study indicates that the in-the-trenches physicians do not have a solid grasp on pricing for the services they use everyday. Why? Hospital charges are established on a confidential pricing structure based on contracts between the hospitals, insurances, and vendors and not on the actual costs of the services delivered, according to Graham.
Because healthcare prices are, in reality, adjusted, researchers gathered data from the hospital departments to create an “intellectual tool” of an unadjusted list of charges for the purposes of this study.
“In reality, there isn’t really a single, true price in our system in the US, for a given healthcare service,” says Graham. “?Almost all bills are paid with adjusted prices, adjusted in confidential contracts between a legion of payer sources and the hospitals. Those prices ultimately paid are not known prices to the average consumer, if you will. They’re distorted by some of the back-and-forth deal making for a hospital system’s ultimate goal to have an overall beneficial payer contract,” he says.
Price opacity
Hospitalists’ lack of price awareness could also transfer over to the patient, who oftentimes does not have the choice in what tests are ordered, adds Graham. Unlike in the outpatient setting where a patient can choose not to go to the pharmacy to pick up a prescription, inpatients in acute care settings are often too sick to make those price comparison decisions.
“It would be almost unheard of for you, the individual patient, to be able get a clear price on a menu before the service is delivered. Almost always, those prices would take place in deals between an insurance payer and a facility, and the individual patient or the doctor who ordered the test would be left out of knowledge of that information,” says Graham.
Patients and hospitalists are not trained in price awareness, according to Graham. After a case is completed, there’s little opportunity to revisit a patient’s case to see how much it cost the patient, he says.
The testing trend
In addition to confidential pricing structures and a lack of price awareness training, today’s physicians also tend to order more tests to be on the safe side, which poses a disturbing trend to run up costs. Graham, who teaches residents, says that inexperience can contribute newer doctors’ urge to check off more tests on the lab forms. In addition, medical legal pressures can encourage physicians to order more tests.
“A lot of what is done doesn’t necessarily help the patient a lot. We hear a lot about defensive medicine, that [physicians] feel they need a lot of tests to rule out possibilities,” says Richard Rohr, MD, MMM, FACP, FHM, hospitalist program director at Guthrie Healthcare System in Sayre, PA. “The fact is that the best defense is a good offense. A well-trained internist should be able to examine a patient, form a differential diagnosis, and confirm the diagnosis with two or three carefully selected tests.”
Controlling costs with health reform
Just as inpatient costs can hit the patient’s wallet hard; the government might also take the brunt of the financial hit.
Although Medicare’s DRG system does place some limits on what the hospital can charge, there is really no limit on what the physician charges can be for a given case, according to Rohr.
“You can call as many consults as you want—get as many physicians on the case as you want—and Medicare really has no choice but [to] pay the bill,” Rohr says.
“Everyone who touches the patient feels the compulsion to order some additional testing, look at something else. This drives up costs significantly.”
As healthcare reform is implemented, one of the major elements to be considered is controlling costs.
“You need a health system where the skill of the physician—to think about a patient’s problem and analyze it—becomes valued; that’s really the key to health reform and what we’ve been missing for the last 50 years,” says Rohr.
Karen M. Cheung is associate editor at HCPro, Inc., contributing writer for HealthLeaders Media, and blogger for www.MedicalStaffLeader.com. She can be contacted atkcheung@hcpro.com.
