Although base salary plus added bonuses based on quality and productivity measures represent the predominant compensation structure for hospitalists, methodologies for paying hospitalists vary widely and appear to be evolving toward paying a higher percentage of compensation as incentives, experts said.
The bulk of hospitalist reimbursement is centered on salary, but productivity and quality incentives can provide as much as 30%, 40%, or even 50% of compensation, according to Jeffery Milburn, a consultant with MGMA Healthcare Consulting Group.
"Employers – especially hospitals – are paying more at the moment to try and align hospital and physician goals," he said.
Dr. Steven Deitelzweig, chairman of hospital medicine at Ochsner Medical Center, New Orleans, agreed. "Base plus incentives are becoming the rule, with the incentives focusing on the hospital’s goals and objectives for the calendar year."
Dr. Deitelzweig added that incentives can be tied to the gamut of hospital goals, from increasing relative value units (RVUs) and diagnosis-related group payment to quality and outcomes measures such as mortality and complication rates. Under health care reform, greater emphasis is likely to be placed on utilization measures, such as readmission rates and discharge times. Patient satisfaction, academic productivity, and "general citizenship," which can include working on committees or spearheading new programs, may also play a role.
A small number of hospitalists are reimbursed solely on the basis of their productivity, Mr. Milburn said. In those cases, the hospital or physician group measures work RVUs or patient encounters and pays a flat rate based on how much work the physician performs, "regardless of how many days or hours you work."
It can be difficult to craft these types of productivity incentives for hospitalists because they have limited control over the patient population at any given time, he said. "Hospitals don’t want them churning patients or overcoding, and hospitals don’t want them fraudulently billing to make up their productivity," he said.
Quality incentive payments based on patient satisfaction can be tricky as well, Mr. Milburn said, adding, "half the time the patient doesn’t even remember who called on them. Also, a lot of patients are going to see two or three different hospitalists during their stays."
In most cases, the physicians and the facility determine what to measure together – that way, the hospitalists buy into the measures.
Hospitalists seem comfortable with most payment methodologies, as long as they’re communicated fairly, Dr. Deitelzweig agreed.
In most practice environments, new physicians tend to prefer guaranteed compensation in the form of straight salary. As physicians become more experienced, they’re more willing to accept productivity-based compensation plans, Mr. Milburn said.
Dr. Alpesh Amin
Dr. Alpesh Amin, professor and chairman of medicine at the University of California, Irvine, and executive director of its hospitalist program, said he thinks incentive payments that provide about 20%-30% in compensation above a base salary work well. "If you just give someone a $5,000 bonus, how meaningful is that for someone who makes $200,000?" he asks. "A $50,000-$60,000 bonus is a lot more meaningful."
The bonus also should be above a fair salary, not "something that gets them back to a reasonable market value salary," Dr. Amin said.
Incentive plans based on individual RVUs have limitations because hospitalists don’t have complete control over their work RVUs, he said. Metrics that measure whether hospitalists are documenting and coding to an appropriate maximum level potentially can work better, he said. Another component to an incentive program could involve chart reviews.
Some portion of a bonus could be tied to metrics for the entire group, while another part of the bonus could be tied to individual goals, such as working to develop a new program or being involved in committees, Dr. Amin said.
At the University of California, Irvine, hospitalist incentive pay is based on readmission rates, as well as on core measures in pneumonia, heart failure, and pressure ulcer prevention. His group has had a compensation system like this for more than a decade. "We have very little turnover," he said. "People seem to be happy."