Managed Care

Imbalances seen with revenues, compensation

When physician-generated revenue for hospitals is compared with the salaries earned by those doctors, primary care physicians (internists, pediatricians, and family physicians) are poorly compensated, even though they are a key driver in referrals to other specialists and are a significant contributor to hospital revenue.

Travis Singleton, vice president of marketing at Merritt Hawkins, a recruiting and consulting company, says that payers should be concerned because of the potentially lower quality of care that could be provided.

He points out that the costs of a hospital admission could be significant and could be avoided if quality care is provided initially.

“A primary care physician who used to see 15 patients a day and provided excellent care because he wasn’t rushing may now have to see 25 or 30 patients a day to make up for lower compensation. Or maybe the physician has to see more indigent patients” and receives less compensation from Medicaid, says Singleton.

Hospitals that make the primary care physicians’ jobs easier — either through easing administrative burdens or maintaining office space for these doctors — are more likely to benefit in terms of revenue generated.

Physician-generated revenue compared with average salaries

Source: Merritt Hawkins. 2010 Physician Inpatient/Outpatient Revenue Survey

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