As part of our 10th anniversary series, we’re taking a closer look at the key factors that influence physician payment rates based on our analysis of our 2019 benchmarks. We analyzed over 36,000 physician contracts in our database, including call coverage, medical direction, leadership services, hospital-based physician contracts, and other administrative services.
The most statistically significant factors are:
Hospital Size - Bigger hospitals typically pay more for physician contracts both in terms of the number of paid positions and the amount paid per contract. Based on MD Ranger analysis, there is a 15% premium on call rates per 100 ADC increase.
Trauma Status - Trauma centers are required to provide coverage for a greater breadth of services than non-trauma centers. Combined with a higher call burden, patient acuity may be higher and payer mix may be less favorable. When it comes to call coverage per diems, being a trauma center carries a 25% premium, based on MD Ranger’s database of physician contracts.
Multi-Facility Arrangements - For health systems in particular, replacing single-facility physician contracts with multi-facility arrangements can save money. MD Ranger sees a 36% savings associated with multi-facility arrangements based on our physician contract data.
Some of the more nuanced factors impacting physician contract rates include:
Burden of Call - For smaller facilities or for specialties that do not require immediate treatment, the burden of being on call is lower and many hospitals and health systems opt for a per episode rate to achieve significant savings as opposed to a per diem rate. Conversely, larger hospitals with high volume emergency departments may need to pay physicians a higher per diem rate due to the overall larger burden of call coverage on their staff.
Physician Supply - Like any other market, it’s all about supply and demand. When the supply of physicians in your area is low, you typically pay more -- the reverse holds true as well. Consider overall market conditions on a case by case basis; if there is a short supply of gastroenterologists, that doesn’t necessarily mean that there is also a shortage of trauma surgeons.
Exclusivity - Granting exclusive rights to a physician group to provide a hospital-based service has economic value. Many providers develop a cost valuation and include exclusivity in determining rates and negotiating terms that are within fair market value.
Physician Characteristics - Some physicians have strong community recognition or exceptional working relationships with other physicians in the community. If a provider has a need for a position that requires exceptional skills and qualifications, it can be justified with proper documentation.
If you’d like to learn more and get an up close look at our 2019 benchmarks, email our team at info@mdranger.com for more information.
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