Incentives in Hospital-Based Agreements Continue to Grow

Unlike the majority of call coverage, leadership, and medical direction contracts, hospital-based agreements often include incentive payments. Having previously looked at what types of position are commonly contained within hospital-based agreements, let’s examine what sorts of incentives are most common to these hospital-based contracts using MD Ranger’s 2017 Physician Contract Benchmarks.


As we can see in the graph, the percent of hospital-based contracts that include incentive payments has nearly quadrupled since 2013, with almost 40% of contracts now including some type of incentive. The three most common indicators that hospitals use for incentive payments in hospital-based contracts are cost, quality, and patient satisfaction.

The data show significant spikes in all 3 main types of incentives from only 2016 to 2017. Cost component incentives jumped from 6% to 12%. Quality component incentives rose from 15% to 22%. Patient Satisfaction component incentives grew from 12% to 19%.

The increase in hospital-based agreements that include any incentive payments grew from 28% in 2016 to 39% in 2017. This serves as more evidence of the impact of pay-for-performance standards in hospital-based agreements.

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