Some of the growth in physician expenditures appears to be the result of continued growth in the number and scale of hospital-based programs and services.
Prior to the 1990s, private community physicians admitted most patients and hospital-based physician contracts were limited to anesthesiology, radiology, pathology, neonatology, and emergency to ensure continuous coverage of basic hospital services (often without hospital compensation/subsidy). Over the last 20 years, there has been a huge transition in how physicians work in and out of hospitals, with a continuing expansion of contractual arrangements for specific populations including: general hospitalists, pediatric hospitalists, critical care, trauma surgery, OB hospitalists/laborists, and orthopedic, surgical, neuro, and specialty hospitalists.
Hospital-based service stipends often cost hundreds of thousands of dollars annually; MDR has seen growth in both the number of hospital-based contracts and the size of those contracts. One of the fastest growing types of programs is OB hospitalist/laborist programs. Between 2015 and 2016, there was a 25% increase in median annual payments (excluding medical direction), to $800,000.
Increased cost of hospital-based programs could be driven by a number of factors, including increased scope of work, a rise in the number of quality, outcome, and pay-for-performance related initiatives driven by regulatory and accreditation organizations, falling census and reimbursement rates, aging physicians, and physician shortages.