Physicians Keep Increasing Revenue for Hospitals

Physicians Keep Increasing Revenue for Hospitals – Ken Terry – February 27, 2019

This is an ugly look at what’s really running our healthcare. Our critical medical care is just a cost center to be minimized while shareholder profits and pay to the hospital’s C-suite executives soar.

The average amount that physicians generate for hospitals has jumped significantly since 2016, according to new survey results released by Merritt Hawkins, a leading physician search firm.

The survey shows that independent and employed physicians generated an average of $2.38 million each for their affiliated hospitals, a 52% increase from the $1.56 million they generated when the firm last conducted its survey in 2016.

The survey focused on inpatient and outpatient revenues from admissions, tests, treatments, and procedures performed or ordered by doctors.   

Of the 18 specialties included in the survey, cardiovascular surgeons generated the most revenue.

Full-time cardiovascular surgeons generate an average of nearly $3.7 million a year on behalf of their affiliated hospitals, followed by

  • invasive cardiologists at $3.5 million,
  • neurosurgeons at $3.4 million, and
  • orthopedic surgeons at $3.3 million.
  • Family physicians (FPs) added an average of $2.1 million in net revenue annually for their affiliated hospitals, while
  • general internists generated almost $2.7 million, on average.

Primary care physicians such as family physicians represent an excellent return on investment, which is one reason they have been our number-one search for the last 12 years,” said Travis Singleton, executive vice president of Merritt Hawkins, in a news release.

The wording of that statement makes me leery and distrustful.

When the medical care I receive from my doctor isn’t viewed as the “practice of medicine”, but rather “excellent return on investment”, the system obviously does not hold patient care as central and my needs will be trumped by money concerns.

Explanations for Increase

The survey, which was conducted from October 2018 through December 2018, elicited 62 completed questionnaires that provided data on 93 hospitals.

Despite the relatively small data set, Merritt Hawkins said it believed the results were reliable, “in large part because the overall number for average annual revenue generated by all physician specialties for their affiliated hospitals has remained relatively constant.”

One reason for the jump in the revenues doctors generate for hospitals, the survey report suggests, is the increasing trend of physician employment by hospitals.

The percentage of physicians working for hospitals and medical groups increased from 44% in 2012 to 49% in 2018.

Moreover, primary care physicians may also admit more patients to the hospitals that employ them than they would if they were in private practice.

The report also points to the growing volume and cost of hospital services, many of which are provided by physicians or result from physician-ordered admissions.

While hospital admissions are slowly declining, outpatient visits have more than tripled since the 1970s, the report notes. Moreover, the average cost per hospital outpatient visit has jumped 62% since 1995 after adjusting for inflation.

In addition, the report cites the additional medical care needed by an aging population.

People over 65 form only 14% of the population but generate

  • 34% of inpatient procedures,
  • 37% of diagnostic tests, and
  • 34% of total spending,

the report said, citing data from the Centers for Disease Control and Prevention.

Finally, the report notes that the still-prevalent fee-for-service model drives up hospital revenues.

While many healthcare systems are trying to curb costs to prosper under value-based reimbursement, the survey

“suggests that emerging value-based delivery models have yet to inhibit the revenue generating power of physician specialists,” the report concludes.

1 thought on “Physicians Keep Increasing Revenue for Hospitals

  1. Pingback: Understanding the money trail in medicine | EDS and Chronic Pain News & Info

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