Hospital-Based Service Programs Contributing to Growth

Posted on
August 30, 2016

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.

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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.

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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.

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