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As Hospitalists Cement their Worth, Compensation Continues Upward Climb


Tom Smith, MD, vice president of clinical quality and hospitalist medical director at North Fulton Regional Medical Center in Alpharetta, Ga., is emotionally torn every time practice-based compensation and productivity data are published— data he will both use and defend against in negotiations with staffers and would-be staffers.

If nocturnist salaries are increasing nationally, will he have to pay his night-shift staff more?

If work relative-value units (wRVUs) are rising in his region, will he need to review how hard he is working his staff—or not hard enough?

If group leaders are receiving compensation premiums, should his top docs be paid above rank-and-file colleagues?

“There are upsides and downsides,” Dr. Smith says. “No. 1, if your compensation is good or appropriate, they sort of validate your pay and, I guess, your self-worth to some degree. But I think if you’re on the lower side, it definitely starts bringing to mind the ‘grass-is-greener scenarios.’”

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Medical Group Management Association DataSource: MGMA Physician Compensation and Production Survey: 2012 Report Based on 2011 Data

For hospitalists, the grass is green in most cases. Median compensation for adult hospitalists rose 6% to $233,855 in 2011, while productivity remained nearly static, according to the Medical Group Management Association’s (MGMA) Physician Compensation and Production Survey: 2012 Report Based on 2011 Data. The report is based on data compiled from 3,402 hospitalists nationwide; slightly more than 56% of respondents work in practices owned by hospitals/integrated delivery systems (IDS); 26% work in physician-owned groups.

The data, which excludes academic hospitalists, shows hospitalist pay has jumped more than 27% since 2008, when unadjusted figures pegged median hospitalist compensation at $183,900 nationwide. The climb comes despite little movement in the number of wRVUs hospitalists are producing. In 2011, the median physician wRVU rate was 4,159 per year, a 0.17% drop from the year prior.

The MGMA survey data will be incorporated into SHM’s annual State of Hospital Medicine report (SOHM), which features information on individual physicians and HM groups. The SOHM report received submission from 396 groups that serve adults only (for more about the survey instruments, see “Apples to Apples?”). Some 40% were employed by hospitals/IDS; a third were employed by management companies; and the rest were academic or other models. The report includes group-level data valuable to hospitalist groups, including financial data (i.e. hospital support payments and CPT code distribution), and information on staffing and scheduling.

Combined, the MGMA and SHM reports show a specialty where compensation continues to be pushed by demand outstripping supply, particularly in southern states (see Table 1). More subtly, leading hospitalists say, the data shows that much of the work that physicians now do—QI initiatives, committee leadership and leading digitalization efforts—is not completely captured by the wRVU metric, long the gold standard for measuring productivity.

“I really believe this is critical, critical information for people to have,” says William “Tex” Landis, MD, FHM, chairman of SHM’s Practice Analysis Committee. “Administrators need to have information to make sure that they’re being appropriate in the compensation that they’re paying the physicians. So everybody that’s involved in hospitalist programs is interested, or should be interested in this data, because it allows them to right resource their programs.”

Dollars and Sense

First and foremost in the MGMA data is the continued trend of rising compensation. In a seemingly endless uptick, hospitalists in the South continue to earn the most (median compensation $258,793, up from $247,000 in 2011 data). Southern hospitalists, though, only saw a 4.8% increase in compensation. The largest percentage jump (7.4%) was for hospitalists in the East (median compensation $227,656, up from $212,000 the year prior). Doctors in the East typically have the lowest compensation of the country’s four geographic regions, but this year’s data showed hospitalists in the West with the lowest figure (median compensation $223,574, up from $213,405).


Dan Fuller, president of IN Compass Health of Alpharetta, Ga., and a member of SHM’s Practice Analysis Committee, says the rising compensation makes perfect sense.

“In fact, I think it’s something we’re probably going to have to deal with for the near future,” he says, noting some in the specialty believed median compensation was ready to plateau. “And, certainly, as hospitalists are asked to do more and more, and they a play a bigger and bigger role in the facility, there should be a higher expectation that they continue to make more and more, and make a bigger impact.”

The question group leaders are asking now: how high can the compensation figures climb? Todd Evenson, MGMA director of data solutions, says there is no answer, yet. Evenson says he sees no immediate obstacles to the continued growth, as hospitalists have established themselves as major players in most hospitals.

What could determine the upper limit is “the payment mechanisms that we start to see fall out of the legislation that occurs,” he says. “As that evolves, I can’t say I know the ceiling.”

A year or two ago, Dr. Landis would have told anyone who asked that the compensation limit was in sight. Now, he believes that as long as competition makes recruitment and retention difficult, it’s hard to predict an end to the compensation growth.

“I don’t think there is a hospitalist group, whether it’s hospitalist-owned, national company, or a private group part of a large, multi-specialty clinic, there’s not a group in the country that’s not struggling with recruitment and retention,” Dr. Fuller adds.


State of Hospital Medicine ReportSource: 2012 State of Hospital Medicine Survey

The Value of wRVUs

One data point that has stymied the expectations of some hospitalists is the relative stability of wRVUs. The national figure has ticked up 1.26% since 2010 to 4,159 per year. But the stability is geographically deceiving. In the East and Midwest regions, hospitalist wRVUs jumped 9.8% and 9.7%, respectively. In the South and West, wRVUs fell 1.8% and 2.7%, respectively.

In whole numbers, the South continues to show the highest productivity per physician. Hospitalists in the south produced 671 more wRVUs than the next-highest regional cohort, (5,192 South vs. 4,521 East). Hospitalists in the South region also produced nearly 35% more wRVUs than their Western counterparts (5,192 vs. 3,383).

Survey experts have no explanation for why regional productivity varies so much. Regardless, the trouble with wRVUs is that they are intended to serve as a proxy of billable productivity, hospitalists say.


As HM groups and physicians become more engaged in moving from a fee-for-service payment model to one that rewards quality and value, the metric becomes less precise, says Ken Simone, DO, SFHM, founder and president of Hospitalist and Practice Solutions in Veazie, Maine, an HM consulting firm.

“Productivity in some ways is difficult to measure with hospitalists because they are also providing services [while they are] working on committees, doing IT work, or doing some research,” says Dr. Simone, a member of Team Hospitalist. “I’m very careful in how I look at a hospitalist’s productivity.”

Dr. Smith

Although some are hesitant to suggest that wRVUs have leveled, Dr. Smith, who oversees a six-hospitalist group at his 208-bed institution about 25 miles north of Atlanta, believes hospitalists “are about at capacity.”

“Particularly considering the new pressures that are on patient satisfaction, time to go in the ER, length of stay, discharge, reducing readmissions,” he says. “I think it’s going to be hard to push that number up.”

Dr. Landis

Dr. Landis, medical director of Wellspan Hospitalists in York, Pa., believes it is counter-productive to push wRVUs too high. He believes a hospitalist’s role is to provide patient care, lead process improvement, and coordinate multi-disciplinary teams. Too much of a focus on any one role takes away from physician efficacy.

“The value of a hospitalist goes well beyond the wRVU number,” he explains. “That being said, we are still in the business of seeing patients. I don’t think having a hospitalist that’s generating 1,500 RVUs and paying them at the 75th percentile is going to be very effective. You’re going to need to balance those out.”

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Apples to Apples?

Any researcher worth his academic salt will say that results are only as good as their N. And so hospitalists eager to glean data points from the MGMA’s Physician Compensation and Production Survey: 2012 Report Based on 2011 Data and SHM’s State of Hospital Medicine report need to remember that the numbers aren’t coming from the same source.

MGMA compiled compensation data on 3,402 full-time hospitalists nationwide. Slightly more than 56% of the respondents worked in hospital-owned practices, while 26% are in physician-owned groups. The rest reported “other” practice models.

SHM received submissions from 396 groups that serve adults only. Some 49% were hospital/IDS employed, 33% management companies, and the rest were academic or other models.

And while the MGMA survey data will be incorporated into SHM’s report, the information was culled from different universes. SHM encouraged its members to participate in the MGMA survey, but did not get involved beyond that. This is a change to the 2011 report, when the two groups jointly gathered data. And it is a change again from previous years, when SHM did its work separately, with little teamwork with MGMA.

While the changing methodologies can make year-to-year comparisons less precise or more difficult to craft, Dr. Landis says surveys need to evolve to ensure they’re asking the best questions and the questions users want answer to. Even then, though, he cautions ever reading too much into survey data.

“We’ve used the best tools to give good statistics, but in the end it’s not a scientific, placebo-controlled, double-blinded trial,” Dr. Landis says. “It’s a survey, and you need to keep in mind that’s what it is.”

—Richard Quinn

How Much Turnover Is Too Much Turnover?

Some HM leaders were pleased last year when hospitalist turnover dropped to 8% from a 14% turnover rate the year prior. This year’s State of Hospital Medicine report pegs the turnover figure at 10%. Although just a slight increase this year, Fuller views the uptick in turnover as a burgeoning cycle. While the supply-demand curve continues to push compensation up, increased turnover will continue to impact both sides of the equation.

“I’m sure there are many fully staffed programs, but they’re dealing with turnover,” he says. “They’re dealing with attrition, physicians leaving to go to fellowships, physicians relocating...physicians wanting to retire. I think it’s a crisis, a tremendous crisis that we need to be prepared to deal with for the near future.”

Aside from turnover data, the SOHM report this year looked to break new ground by trying out new questions. The report for the first time surveyed how hospitalists perform comanagement duties. In surgical comanagement cases, the hospitalist served as the admitting or attending physician 57% of the time. The rest of the time they served as a consultant. In medical comanagement, hospitalists were the admitting/attending physician 85% of the time (see “Comanagement Roles,”).

As hospitalists find specialties even within the field, the report also looked to put data to the cohort of nocturnists. Roughly half of those covering night shifts work fewer shifts than their daytime colleagues. Moreover, 63% of nocturnists earned a differential for that work (see Figure 4).

The value of data points on emerging and existing trends is that it gives HM groups and group administrators thresholds to benchmark themselves against, Dr. Simone says.

“It also allows the HM leader to compare within a practice,” he adds. “If hospital medicine groups are performing at or above median, or are highly functional groups, it gives great feedback that they’re doing things correctly. But it also gives the leader an opportunity to make a sound business plan when he’s going to talk to the hospital [administration] for subsidy, or when he’s going to negotiate compensation for his providers for the next year. I think that’s a powerful tool.”

Interactive regional survey breakdowns

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Richard Quinn is a freelance writer based in New Jersey.

How Long Can The Stool of Staffing Success Stand?

William “Tex” Landis, MD, FHM, medical director of Wellspan Hospitalists in York, Pa., and chair of SHM’s Practice Analysis Committee, likes to say that hospitalists are a fundamentally necessary service in hospitals. But keeping a full complement of hospitalists is hard work—and money is a big draw.

“We have to make some way for it to be a more desirable position, and my feeling is that there are three legs that stool stands on, and that’s salary, schedule, and scope,” he says. “Those are the three things that you have to play with and if the scope of the service is going to stay the same and the schedule is going to be similar, then the third thing that’s easiest to adjust is the salary.”

Dr. Landis has no answer to when he expects compensation to stop increasing. But Leslie Flores, MHA, SHM senior advisor for practice management and a principal in the practice management firm Nelson Flores Hospital Medicine Consultants, believes it’s dangerous to climb too high in compensation without something else changing dramatically.

“At some point,” she says, “there is a breaking point in terms of what hospitals can afford to spend to support hospitalist programs, and that is going to either cause significant salary pressure, or it’s going to cause significant pressure for hospitalists to increase their productivity and become a lot more efficient in their clinical work, or both.”

—Richard Quinn

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