Hospitals typically pay physicians more for hospital based services than any other contracted physician payments. Because the contract values are so high, ensuring fair market value becomes very important.
According to our database from over 300 facilities across the US, here are the top five costliest hospital based services:
Providing physician-level inpatient care takes the cake, where the median hospital payment is over one million dollars annually. A close second is trauma surgery, which is very costly given the call coverage stipends needed in these agreements.
Let’s not forgot anesthesia, which is a significant percentage of physician payments.
Anesthesiology agreements typically cover all sites within a facility that require anesthesia. These include inpatient operating rooms, outpatient operating and procedure rooms, and obstetrical services. They typically include coverage for a defined number of ORs for specified hours and days of the week. This is to ensure the availability of an anesthesiologist for both scheduled and unscheduled cases. Emergency services may be provided by an in-house or on-call physicians. At minimum, coverage is for general anesthesiology services but may also include subspecialists like cardiac, pediatric, obstetrics, and pain management. Often, anesthesia contracts can be the largest, most complex physician agreements that a hospital will negotiate.
When analyzing an anesthesia contract for renewal or to create a new agreement, here are the most important factors to consider:
- What are the total number of surgical cases, births, operating rooms, covered sites, and hours of on-site coverage required? Make sure you know the entire scope of the agreement so that the negotiated rate makes sense.
- Is in-house coverage required after 7pm and on weekends? Restricted call rates are typically higher, as is weekend/holiday coverage.
- Does the contract require anesthesiologists with specialized training and certification in fields such as cardiac or pediatric anesthesiology? If so, this might impact rates.
- Is the proportion of Medicare, Medicaid, or unsponsored patients extraordinarily high or low? Some contracts include payments for uncompensated care.
- What are the average number of cases per day, per year, per room, and per physician, and how do they compare to industry benchmarks?
- For contracts based on collections or unit value guarantees, are the annual per physician compensation amounts or unit values based on fair market value assumptions for those values?
- Are both the aggregate and the per physician per diem payments reasonable? Have you compared them to industry benchmarks?
Since 2010, MD Ranger has collected hard-to-find market data on hospital-based service contracts like anesthesiology, pathology, radiology, etc. Our data collection method is unique because we get our data directly from hospitals.
We collect data on ten different hospital services. In addition to gathering payment rates, we also collect information on incentives, compensation methods/payment structure, unsponsored payments, and sites of service included in contract.
Here are median pay rates for the highest paid hospital-based services we collect:
According to our database, trauma surgery medical directors and pathology medical directors spend the most hours working in administrative roles. The above graph is based on median hours collected from over 300 facilities across the US.
Other physician administrative roles that command more hours are occupational health, teaching/research, heart center, and ambulatory services.