Last year, 17 physician specialties generated an average annual net revenue of about $1.54 million for their hospitals. This is a modest 3% increase from 2007 when the average revenue was a little under $1.5 million, but still significant, considering the numbers rose despite a recession, according to Merritt Hawkins' 2010 Physician Inpatient/Outpatient Revenue Survey.
Hospitals see rise in revenue from doc specialties, survey finds
For primary-care physicians, average annual revenue dropped to $1.39 million from $1.43 million in 2007. For specialists, the numbers went up slightly to $1.58 million in early 2010 compared with $1.51 million in 2007. The most recent average annual salaries for primary-care physicians is about $177,000 and $352,500 for specialists.
“What these numbers establish is a good baseline for us, in our physician recruiting and development process,” says Dave Dobosenski, CEO of 16-bed St. Croix Regional Medical Center, St. Croix Falls, Wis.
Although some specialties generate a higher return on investment than others, Dobosenski says his primary concern is to meet the needs of the hospital's community, so even if a physician does not generate a positive return on investment, the hospital will support the needs of the community. “When a physician comes onboard, there is a period of adjustment we allow for, while the physician develops his or her practice. If, for some reason, a physician is not doing well, a number of factors could be contributing to it, so we try to identify the cause and correct it,” he says.
Since St. Croix Regional is a critical-access facility, Dobosenski says the medical center has developed strong contracts with local providers and added specialty services when necessary. As the new healthcare law's provisions take effect over the next few years, Dobosenki believes these relationships will be vital for hospitals to successfully adjust to the new healthcare model.
“As the healthcare model shifts from rewarding volume to paying for value, data like this survey may be useful for now; reforms may render the data obsolete,” says Sandra Bruce, president and CEO of nine-hospital Resurrection Health Care, Chicago. Bruce also says the reforms will change how hospitals and healthcare systems work affecting physicians' incomes, and how much revenue hospitals can generate.
The Merritt Hawkins survey concluded a growing number of physicians are leaving private practice to work for hospitals, a trend Michael Patmas, M.D., CEO of private practice Eagle (Ind.) Internal Medicine calls a stunning trend. Doctors are “bailing out on private practice to work for hospitals, but it's not perceived as a glamorous or lucrative job,” he says.
With respect to the healthcare reforms, however, there will be a higher need for primary-care physicians, and restructuring will occur in the entire income and revenue configuration health systems currently work with. There are strong incentives in healthcare reform, Bruce says, to focus on wellness, prevention and creation of medical homes. This may mean a shift away from hospital care to ambulatory and community-based delivery sites.
The survey was mailed to chief financial officers at hospitals nationwide in October 2009 and January 2010, with 114 participating.
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