Per diem payments account for 83% of all MD Ranger call contracts, with annual and per episode rates comprising most of the other payment methods:
Just under 95% of all per diem contracts pay the same rate 365 days a year, but just over 5% include different rates for holiday and weekends. Half of these contracts have a weekend-only differential, with the remaining contracts paying either for both weekends and holidays or just holidays:
We have found that contracts with weekend or weekend + holiday rates typically have lower weekday payment rates compared to the blended benchmarks we report in our standard reports:
We also have found that contracts with holiday only + weekday rates are not statistically different from contracts that only have a single per diem rate 365 days a year.
What are the rate differentials?
For each of the weekend and holiday rate payment methods, we find the following median differentials:
Weekday and Weekend Rates
- The weekday rate is 11% lower than the combined benchmark per diem rate
- The weekend rate is 40% higher than the weekday per diem rate
Weekday and Holiday Rates
- The weekday rate is not significantly different than the standard benchmark per diem rate, which is based on single per diems and weighted per diems
- The holiday rate is 34% higher than the weekday per diem rate
Weekday, Weekend, and Holiday Rates
- The weekday rate is 8% lower than the combined benchmark per diem rate
- The weekend rate is 29% higher than the weekday per diem rate
- The holiday rate is 43% higher than the weekday per diem rate
How to use these findings
To calculate an appropriate weekday, weekend or holiday rate start with the standard published rate for a service then decrease the weekday per diem as indicated above. For the weekend or holiday rate, calculate a rate differential using the percentages above.
Sample calculations:
Orthopedic surgery median standard (365 day) benchmark: $1,170
Rates for weekend and weekday payments:
Weekday rate (11% lower): $1,041
Weekend rate (40% higher): $1,458
Rates for holiday only payment:
Weekday rate (no difference): $1,170
Holiday rate (34% higher): $1,568
Rates for weekday, weekend and holiday pay:
Weekday rate (8% lower): $1,076
Weekend rate (29% higher): $1,389
Holiday rate (43% higher): $1,539
There is wide variation in the rate differentials across the benchmark quantiles, however we find that the higher the differential between weekday and holiday/weekend, the lower the weekday rates. For determining fair rates it is important to recognize that the weighted payment over the course of a year should equal the standard per diems paid for contracts with a single rate.
If you would like a further breakdown on the findings from this analysis you can view a recording of a webinar on the findings here:
If you would like more information, you can reach out to us at info@mdranger.com or give us a call at 650-692-8873.
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