Practice Economics

Modest Gains


Hospitalists are earning a little more, working a little harder, and are less likely to switch jobs or careers, according to the 2011 State of Hospital Medicine report. The annual report, based on data collected jointly by SHM and the Medical Group Management Association (MGMA), offers more than 10,000 compensation and productivity data points for all types of hospitalists, including, for the first time, an exclusive look at academic hospitalists.

As previously reported, median adult hospitalist compensation increased to $220,619, a 2.6% increase from the $215,000 figure reported last year. “I think that’s a reflection of the market and demand for hospitalists, and the value that hospitals and other healthcare payors see that hospitalists bring,” says William “Tex” Landis, MD, FHM, medical director of Wellspan Hospitalists in York, Pa., and chair of SHM’s Practice Analysis Committee.

The compensation increases for hospitalists reported in the SHM-MGMA survey mirror results in other recent surveys. The 2011 Medical Group Compensation and Financial Survey, produced by the American Medical Group Association, found the overall average increase in physician compensation was 2.4%. Primary-care physicians (PCPs) reported a 2.6% increase in 2010, while the “hospitalist-internal medicine” category saw one of the steepest increases at 6.29%, according to the report (

According to the 2011 MedScape Physician Compensation Report, 27% of the more than 15,000 physicians surveyed said their income increased from 2009 to 2010, whereas 50% said they saw no change. About 23% reported a decline in income, the report showed (

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Continuing a decadelong trend, the SHM-MGMA report shows hospitalists in the South make the most (median compensation $247,000, up from $235,701 in 2010) and hospitalists in the East ($212,000, up from $205,000 in 2010) lag behind the other regions (see Table 1).


The Hospitalist spoke to five members of SHM’s Practice Analysis Committee (PAC) about the survey results, and each points to continued nationwide demand as the driver of increased compensation. However, the committee also cautions HM groups and directors to be leery of trending this data, as the report is based on a volunteer survey, the survey population changes year to year, and only two years of identical survey data are available.

“As hospital medicine continues to grow, the hospitals become so dependent on the services that the hospitalists provide,” says PAC member Scarlett Blue, RN-BC, MSN, NE-BC, CPHQ, vice president of quality and clinical development for Eagle Hospital Physicians. “[Hospitals] know HM is critical and…I think that hospitalists demonstrate tremendous value, which the hospitals and the management groups recognize.”

The 2011 report, available Sept. 14, compiled data about 4,633 hospitalists in 412 groups. Eighty-five percent of the respondents classified themselves as “adult” hospitalists, 5% as “pediatric” hospitalists, and 10% as both adult and pediatric. Of note, this is the first time SHM has produced compensation and productivity data in consecutive years. In addition to compensation, the survey provides drill-down capability on productivity and reimbursement metrics, along with specific data regarding night coverage arrangements (see “Survey Insights,”), financial support payments, physician turnover, and, for the first time, a look at nonphysician providers (NPPs) in HM practice (see “Nonphysician Provider Data Available for First Time,”).

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Nonphysician Provider Data Available for First Time

Nonphysician Provider Data Available for First Time Blue

Hospitalist groups were asked about nurse practitioner (NP) and physician assistant (PA) employment, and 49% of HM groups reported having some type of nonphysician provider (NPP) on staff (see Figure 4). Those results, although not startling to some, should open the other half’s eyes, Dr. Landis says.

“Just looking to the future, I think most of us can see physician extenders¬⎯NPs and PAs⎯becoming more and more important in the delivery of hospital care,” he says. “We’re going to be looking to get more information about how that’s happening and what functions they’re performing and what resources, financially and otherwise, are required to help them be effective team members.”

Hawley says NPPs are a critical part of HM’s future but admits some hospitalists still are reluctant to work with NPPs because compensation and incentives are misaligned. “Oftentimes what a [physician] compensation plan will do is not provide for any work that is being done by the NPP,” she says. When physicians find out they also are being measured on patient satisfaction and other metrics, “then the NPP becomes very, very critical. So we’re seeing more and more acceptance. Our opinion, as a consulting group, is that there won’t be a [HM] program in this country that doesn’t somehow use nonphysician providers. There just aren’t enough hospitalists to go around.”

Dr. Landis says his committee is planning to collaborate with SHM’s Nonphysician Provider Committee to determine the best way to collect and disseminate NPP benchmarks. “That’s a future trend and everybody can see it,” he adds. “We have yet to solidify, though, how we’re going to measure and evaluate what’s going on there.” —JC

Hospitalist Productivity

Although hospitalists are earning more, the 2011 report also shows they are producing more work relative-value units (wRVUs) than ever before. The median physician wRVU rate annually for 2011 was 4,166, a 1.4% increase over the 2010 figure.

Hospitalists in the Eastern and Midwest regions reported relatively unchanged wRVUs when compared with 2010 figures. The Southern region, which outdistanced the other regions by more than 800 wRVUs per physician, reported a 6.7% decrease in wRVUs—4,931 in 2011 compared with 5,287 in 2010. On the flipside, the Western region showed a 11.9% increase per physician (see Table 2, left).

PAC committee members agree the wRVU variance between regions is difficult to explain, but most agree the slight year-over-year increase in productivity shows the specialty is stabilizing in terms of what productivity is expected from the average hospitalist.

“Maybe it is an indication that the field is maturing and we’re settling in at some data points that we can now potentially put some stock into,” says Beth E. Hawley, MBA, FACHE, senior vice president of The Cogent Group, a consulting division of Brentwood, Tenn.-based Cogent HMG. “Before, [the figures] changed dramatically from survey to survey; I think we’re seeing more stability now from last year to this year.

It’s helpful to be able to sort [wRVUs] by employment model, by region, by large and small hospital. We can really get some better benchmarks in terms of what should be the expectation.

—Beth E. Hawley, MBA, FACHE, senior vice president, The Cogent Group, Brentwood, Tenn., SHM Practice Analysis Committee member

“It’s helpful to be able to sort [wRVUs] by employment model, by region, by large and small hospital. We can really get some better benchmarks, in terms of what should be the expectation.”

Chris Frost, MD, FHM, national medical director of hospital medicine services for HCA, says he remains somewhat hesitant to say HM is “settling into a number” for expected wRVUs, as he routinely hears from hospital administrators looking for “additional efficiencies that we can put in place to allow and position the hospitalists to be more productive” while maintaining a high quality care delivery model. He’s also puzzled by the geographic discrepancies. “I just have to scratch my head. I haven’t entirely figured that out yet,” he says.

That said, Dr. Frost agrees the wRVU benchmarks are the most useful in terms of “billable productivity. But I also would like to see—or believe—one of the reasons compensation is going up and the work RVU is flat is hospitalists are being recognized for their value in other arenas, as it relates to the transition from the fee-for-service to pay-for-value-type models, championing effective transitions of care, leading process improvement teams, etc. Those things can’t, or don’t, necessarily lend themselves well to a work RVU equivalent.”

The Buzz: Financial Support

First reported at HM11 in May, the survey shows hospitalist support payments increased more than 39%, to $136,403 per FTE hospitalist in 2011 from $98,253 in 2010. PAC members and other hospitalist experts in practice management attribute the startling increase in support payments to more accurate reporting. Others note that the rise in support payments could be attributed to the decline in collection of professional fees, a direct result of the economic downturn.

And, according to Dr. Landis, hospitals are more willing today to fund hospitalist services than ever before.

“I think [the rise in HM support] payments is because of the evolution of healthcare in the hospital as a whole,” he says. “Hospitals are looking to hospitalists to help them provide the care that that patients and families need, expect, and want. And we’re stepping up to the plate to do it, and they’re paying us to do it. I think that’s the story.

“If you want to tie that with why there’s $136,000 going per hospitalist, [it’s] because they want us there for that rapid-response team, and rapid-response teams don’t generate a lot of RVUs necessarily.”


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Hawley, the consultant, agrees the percentage increase in financial support is somewhat shocking, but she isn’t surprised by the median figure. She knows hospitals are asking more of HM groups, and all of those value-added, non-billable tasks and responsibilities come with a cost.

“It’s not totally surprising, but it’s a big leap,” she says. “I would say at least some of that has to be driven by the fact that we have hospitals and integrated delivery systems employing more and more of these physicians that responded to this survey, as well as physicians’ practices are perhaps becoming more educated as to what their finances are. There’s a better understanding of allocation of overhead, of billing fees, all of those things that go into a practice where … that may not have been as clear to folks when HM was a bit younger.”

Downward Trend: Hospitalist Turnover

In what some are calling a positive sign for the specialty, hospitalist turnover dropped to 8% in 2011, compared with a 14% turnover rate among hospitalist groups serving adults in 2010 (see Figure 1). Rates declined for both hospital-owned and non-hospital-owned groups, according to the report. Hawley, the consultant, says the decline in physician movement is “consistent” with what she sees in daily interactions with HM groups. Moreover, she considers that trend to be just as important as the overall decline in hospitalist turnover.

“[The survey indicates] more physicians are employed by a hospital or an integrated hospital system. With that, what we’re seeing on the consulting side is there are certain benefits with being employed by a hospital or healthcare system, in terms of retirement plans, things that [hospitalists] may not find as rich in a private practice or with a multispecialty group,” she says. When a hospitalist becomes employed with a hospital system, she hears them say, ‘This is where I want to live and raise my family.’ People choose this type of employment for a reason.”

That has been the experience of PAC member Tierza Stephan, MD, FACP, SFHM, who supervises more than 135 hospitalists as hospitalist district medical director for Minneapolis-based Allina Medical Clinic. Dr. Stephan currently has 15 openings at six of the eight HM groups she directs. Even so, she admits that her programs have been “blessed with low turnover.” The upshot: “We use that when we talk to the C-suite,” she says. “It’s way more costly to have one physician come in, train them, and then have them leave. The low turnover rate gets factored into the cost of what they’re paying.”

Dr. Frost says HM is becoming “less and less a stopover specialty,” as more physicians adopt HM as their career. Dr. Landis says that, although just two consecutive years of data are available, the decline in turnover rate is a good sign for the specialty.

“I think many of us suspect that as the hospitalist movement matures that there hopefully will be a stabilization of the turnover rate,” he says. “Hospitalists tend to be very portable, and when there’s a lot of open jobs and only a few hospitalists, there can be even more and more [turnover]. Typically, someone gets themselves into a situation, they feel that they’re overworked, underpaid, underappreciated, they’re going to look for another job, and those jobs are out there. As the market stabilizes, there will probably be less and less moving around.”

Interactive regional survey breakdowns

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Jason Carris is editor of The Hospitalist.

Advice From a Numbers Guy

A self-described “numbers” guy, Troy Ahlstrom, MD, SFHM, agrees regional data is just as important as, if not more important than, the national numbers. He stresses knowing your market, your competitors, your hospital culture—and using that information along with the benchmarking data to formulate expectations for your group.

“Oftentimes you are measured against the guy next door,” says Dr. Ahlstrom, CFO of Traverse City-based Hospitalists of Northern Michigan. “You have to know the numbers, because [administrators] are going to know the numbers.”

Dr. Ahlstrom offers these tips for incorporating benchmarking data into your practice:

  • Know your neighbors. “If you keep in mind your local needs, then you can look at the data and start to evaluate what parts are going to help you better formulate a practice that brings on the right people, does the right work, and continues to produce the amount of workload and compensation that makes sure they are happy in the future,” he says.
  • Evaluate how applicable the data is. Pay attention to the total number of survey respondents in each category, and the standard deviation around the mean. “In other words, what is the central tendency of the data? You might find data in subsections that you find interesting, but it might not be data that has a central tendency,” he says. “Find data sets that are most applicable to your practice while assessing variations from the larger data sets. Consider how and why your practice might vary from the report as part of your evaluation.”
  • Pick out trends and look at them in total. The key is to avoid looking at data points in isolation. “It’s important to look at trends in the data over time, and pick out where those trends are going to go,” he says.
  • Involve your people. “I think that this data being available from the [provider] side and management side is a good thing,” Dr. Ahlstrom explains. “The more we are involved in understanding the trends in HM, the better we are going to plan where we are going in the future.”


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