Hospitalist Subsidy and Average Support Payments Reviewed.

UPDATE 2012:  I have updated this entry to provide the most current information available.  The 2012 SHM/MGMA salary survey (based on 2011 data) reports a median level of financial support by hospitals for hospitalists of  $140,204 per FTE non academic adult hospitalist per year.  Regional differences in the data does exist with $159,258 in median support per FTE hospitalist reported in the South.  In addition,  the compensation report confirms that  smaller programs require higher  subsidies than larger groups.  For detailed information on hospitalist support data, consider purchasing this invaluable report here.   In addition, check here every year as I will continue to provide the most current information as it becomes available.    Continue reading below for additional historical information on hospitalist support.

UPDATE 2011:  Hospitalists have transformed the delivery of hospital care in America.  It's WIN-WIN on all fronts and hospitals have recognized the value hospitalists bring by supporting and subsidizing income and compensation to correct for the inadequate compensation failures of  E/M billing and coding.  

How high is the average hospitalist support payment now?  First reported during the  May 2011 HM conference, the subsidy per hospitalist per year in 2011 (based on 2010 data) rose to $136,400 per hospitalist, per year.  That's more than double the $60,000 reported in the original SHM data survey almost a decade ago and almost 40% higher than the average $98,253 subsidy payment per hospitalist per year reported on last year's Hospitalist Salary and Compensation Report for 2010 (SHM/MGMA).  

Richard Quinn over at  The Hospitalist reports his take on this trend by suggesting  that this trend is not sustainable.  I disagree with that assertion and here's why. I think it has taken a decade for hospital administrators to start viewing the hospitalist subsidy as an asset instead of an expense. They are just now realizing how valuable we are.  That's right folks, it's not every day an expense can be considered an asset, but it is for hospitalists.  I believe the people writing those checks are just now getting it and hospitalists are seeing that with the rapid rise in support payments.

Strictly speaking, providing $136,000 per hospitalist per year seems like an extraordinary expense and burden for hospitals that are being buried under negative hospital Medicare margins and an expanding Medicaid program.  Hospitals cannot survive on Medicaid and they know what's coming.  Hospitals have a lot of head winds in their future.  Yet, they continue to cross subsidize hospitalists in a trajectory not seen in any other area of medicine.   There's only one reason why that makes sense.  Hospitalists  are undervalued. The market is telling the world hospitalists are undervalued.   In fact, I'd liken hospitalists to a bar of gold:
We are expensive, but our value keeps rising with every peripheral event. Hospitals are paying a lot to hoard us knowing that their expense now means they will have an asset that protects them against the coming economic calamity they see brewing.
By understanding hospitalists's return on investment, administrators who get it understand that a great hospitalist group is worth their weight in gold.  Is $136,000 a lot of money to pay a doctor to provide care?  Yes.  Is it a lot in the context of the direct and indirect benefits a hospital will see on the back end, now and into the future?  Not even close.

I contend that hospital administrators could double  or triple that support payment and still feel strongly that their return on investment is better than every other expense in the hospital, including their own salaries.  Hospitalists are cheap and their return on investment would shock anyone who has actually sat down and understood the numbers.

Since this is an effort in collaboration, here's what hospitals can do for hospitalists.  Make our jobs easier to provide excellent care at an affordable price.  That means, you need to remove obstructions to our work flow.  We need wireless, on the go, at the bedside access to patient information, past and present 24 hours a day with high reliability.  We need systems that seemlessly implement quality measures without making our lives one obstuctive headache after another.  

We need physicians deeply involved in  every step of every IT initiative at all times and we need you to understand that the path of least resistince will be the path most often taken.  That means, if the path of least resistance produces bad quality care, you're going to get bad quality care.  Don't let that happen.  Make it right from the beginning.  We don't have cheap residents and medical students doing our work for us.  Make our job hard to do and it's going to be very expensive for you to fix.

Now, if you can provide this amazing environment for us, and our patients, you will not only increase your market share, you will also need fewer hospitalists doing the same amount of work.  That's how you can bring hospitalist efficiency to the forefront and save yourself some money on the back end.  Because we're only going to get more expensive.  That's what the market is telling you.

Make sure to review my wealth of information in my area dedicated to hospitalist resources.  


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