Physicians employed at a hospital.
According to data offered at Becker Hospital Review‘s recent meeting in Chicago, nearly 70 percent of physicians today are working in hospitals rather than private practice. What factors are driving this trend, and what does it mean for compensation and fair market value?
Reimbursement cuts and lifestyle changes provide motivation
Becker‘s seventh annual meeting included a presentation on physician employment trends conducted by Jim Carr, partner in HealthCare Appraisers, a national consulting firm providing fair market value (FMV) analysis. Carr cites reimbursement cuts and lifestyle changes as major impetuses behind the move to hospital-based employment.
Impact on fair market value
This far-reaching trend is causing hospital administrators to rework compensation contracts accordingly. Carr gave the following suggestions to consider when calculating FMV:
• While work-related relative value units (RVU) are still the most widely-used metrics, physicians are increasingly resisting them in favor of base salary guarantees and/or longer guarantee periods. The feeling is that production in a hospital setting is governed by many factors beyond their control.
• Many physicians are demanding compensation for any activity, such as committee meetings or resident supervision, which affect RVU.
• Quality-based bonuses are becoming more common, but the definition of “quality” is shifting from clinical metrics to value-based criteria such as patient satisfaction.
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