MD Ranger Releases Fourth Annual Physician Contract Benchmark Reports

2012 Payment rates for physician service contracts stabilize

April 26, 2013

Contact: Allison Pullins, Director of Marketing

Phone: (650) 692-8873

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Burlingame, CA -- MD Ranger released its fourth annual benchmark reports today. The reports detail payment rates for hospital-based physician services, medical direction, leadership, administrative, call coverage, and diagnostic testing services. Data is drawn from 9,000 contracts from 309 hospitals in 27 states with benchmarks for over 200 physician services. New this year, MD Ranger benchmarks include data for total hospital spending on non-employed physician contracts, showing a range of $2 million to $14.8 million from the 25th to 90th percentiles. As a subscriber-based product that collects all physician contract data, MD Ranger sheds insight on the type and range of payments for a broad scope of services.

Year-over-year analysis found that more than 80% of contracts had no change in rates, and only 4% of administrative and 7% of coverage contracts had rate increases. The average increase across all contracts was around 1% compared to over 4% last year.

MD Ranger President Penny Stroud states, "MD Ranger's 2012-13 Benchmark series demonstrate the significance of physician services as a major component of hospital costs for hospitals and health systems. The good news is that the rate of increase has declined."

Significant findings from the 2012-2013 physician contract benchmarks include:

  • Trauma status commands an average 25 percent premium across all services.
  • Multi-campus arrangements were 30 percent less costly per campus than single campus arrangements. Multi-campus direction, leadership and administrative positions were 17 percent less costly than single campus arrangements.
  • Size matters. Each 100 patient increase in average daily census is tied to a 12 percent rise in coverage payments. Increasing hospital size by 100 beds increases administrative hourly rates by 10 percent.

Geography is a frequent concern of providers, and MD Ranger continues to find no correlation to rates. MD Ranger has considerable geographic diversity, with hospitals in 27 states covering dozens of rural and urban areas. Extensive testing of geographic clusters of MSAs, combinations of MSAs, and urban/rural distinctions, found no statistically significant geographic variation. Craig Paxton, Ph.D., chief statistician and economist at MD Ranger, summarized, "Based on four years of data, we conclude that geographic variation, if meaningful at all, is so only in markets smaller than MSA's."

About MD Ranger

MD Ranger is a leading provider of data-driven physician compensation benchmarks that help hospitals, physicians and health systems determine appropriate compensation rates, negotiate competitive contracts, and comply with federal regulations. The company's proprietary database and benchmarks reduce the complexity and costs of establishing fair market value for on-call arrangements, medical directorships, administrative services, diagnostic testing services, and hospital-based medical groups. For more information, visit www.mdranger.com

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