Sorting out whether a hospitalist’s bonus and other compensation elements are in line with survey data often leads to confusion. The 2013 MGMA Physician Compensation and Production Survey report, based on 2012 data, shows median compensation of $240,352 for internal-medicine hospitalists (I’ll round it to $240,000 for the rest of this piece). So is your compensation in line with survey medians if your base pay is $230,000 and you have a performance bonus of up to $20,000?
The problem is that you can’t know in advance how much of the $20,000 performance bonus you will earn. And isn’t a bonus supposed to be on top of typical compensation? To be in line with the survey, shouldn’t your base pay equal the $240,000 median, with any available bonus dollars on top of that? (Base pay means all forms of compensation other than a performance bonus; it could be productivity-based compensation, pay connected to numbers of shifts or hours worked, or a fixed annual salary, etc.)
The short answer is no, and to demonstrate why, I’ll first review some facts about the survey itself, then apply that knowledge to the hospitalist marketplace.
I want to emphasize that in this article, I’m not taking a position on the right amount of workload, compensation, or bonus for any hospitalist practice. And I’m using survey medians just to simplify the discussion, not because they’re optimal for any particular practice.
The most important thing to know about the survey data is that the $240,000 figure takes into account all forms of pay, including extra shift pay and any bonuses that might have been paid to each provider in the data set. Such benefits as health insurance and retirement-plan contribution are not included in this figure.
There are several ways a hospitalist might have earned compensation that matches the survey median. He or she might have a fixed annual salary equal to the median with no bonus available or had a meaningful bonus (e.g. $10,000 to $20,000) available and failed to earn any of it. Or the base might have come to $230,000, and he or she earned half of the available $20,000 performance bonus. Many other permutations of bonus and other salary elements could occur to arrive at the same $240,000 figure.
The important thing to remember is that whatever bonus dollars were paid, they are included in the salary figure from the survey—not added on top of that figure. So if all bonus dollars earned were subtracted from the survey, the total “nonbonus” compensation would be lower than $240,000.
How much lower?
Typical Hospitalist Bonus Amounts
The MGMA survey doesn’t report the portion of compensation tied to a bonus, but SHM’s does. SHM’s 2012 State of Hospital Medicine Report, based on 2011 data (www.hospitalmedicine.org/survey), is based on the most recent data available, and it showed (on page 60) that an average of 7% of pay was tied to performance for nonacademic hospitalist groups serving adults only. This included any payments for good individual or group performance on quality, efficiency, service, satisfaction, and/or other nonproduction measures. In conversation, this often is referred to as a “bonus” rather than “performance compensation.”
One way to estimate the nonbonus compensation would be to reduce the total pay by 7%, which comes to $223,200. Keep in mind that there are all kinds of mathematical and methodological problems in manipulating the reported survey numbers from two separate surveys to derive additional benchmarks. But this seems like a reasonable guess.