MGMA: Bonus Incentives Boost Hospitalists' Productivity

We learned the principles of economics in our youthful days at the lemonade stand; for every cup of lemonade we sold, we earned more money.

The State of Hospital Medicine: 2010 Report Based on 2009 Data explains that, supplemented with incentives, hospitalists perform more work and earn higher compensation even if they start with a lower fixed base salary.

"I think what the survey did—that interpretation—it confirms human nature. You have someone who is being incentivized more, they will produce more," says William "Tex" Landis, MD, FHM, chair of Society of Hospital Medicine (SHM)'s practice analysis committee. "If you have a need to have more productivity in your program, that might be a way to accomplish that," he adds.

Link between compensation and productivity

As the first joint survey between the Medical Group Management Association and SHM, this report combines MGMA's data analysis tools with SHM's active membership to provide compensation and productivity information from hospital medicine groups and individual hospitalists.  

Researchers surveyed 443 hospital medicine groups that represent 4,211 hospitalists. They found that the median compensation is $215,000 for internal medicine hospitalists, higher than in previous years by SHM's data.

Interestingly, the survey showed that the lower the base salary, the higher the productivity hospitalists performed because of bonus incentives. Adult hospitalists whose fixed base salary is 50% or less of their compensation reported the highest median work of 5,407 work relative value units (wRVUs). Those whose base salary is part of  of their compensation (51-70%) performed a lower median of 4,591 wRVUs. Those whose base salary is 71-90% of their compensation performed a median of 3,859 wRVUs. And those whose base salary made up almost all of their overall compensation (91-100%) only performed a median of 3,571 wRVUs.

Wary of the numbers

However, survey researchers caution that surveys should not be interpreted like scripture. The national median wRVUs is 4,107, with hospitalists' productivity ranging on both ends of the spectrum, some more, some less.

Researchers also caution that every program is different. Although the survey can provide benchmarks, it's not the letter of the law. Compensation and productivity may differ depending on the number of hospitalists, patient volume, location, and other variables.

John Nelson, MD, FACP, FHM, of the SHM practice analysis committee says in the survey, "Remember that this data does not reflect the position of SHM or MGMA regarding the right, optimal, or appropriate standards for hospitals practice."

When asked if there is one best model, Landis says, "I don't think you can say there's one best compensation method. It's not one size fits all. Different programs have to look at their situation, their local situation, and what they're trying to accomplish with their program."

Another thing to keep in mind is that this year's report excludes academic hospitalists from the data. As a replacement for SHM's biannual report of hospitalist data, the current report only focuses on nonacademic hospitalists, whereas previous editions of SHM surveys include both populations.

"We had very little participation of our academic members in this report, as it should be," said Landis. However, MGMA and SHM plan to release another survey that focuses on academic hospitalists, according to Landis. "We'll have another report upcoming in six months from now that'll have even more data and allows [us] to have even better information for our academic colleagues," he says.

Finally, Landis said, "Not all of the value of hospitalists to a health system is in productivity." A lot of the value that hospitalists provide isn't simply wRVUs, but the work that they do, such as process improvements that aren't always measured in productivity metrics, he said. For example, lowering the number of complications from blood stream infections doesn't show up as an RVU but is extremely valuable.

"The purpose for putting a lot of work into this [report] is to help patients," said Landis. "That's what it's all about. We can't sustain a situation where providers are being overpaid, compensated for work that is not valued or not being done, but we also can't have the other situation either, where they are underpaid and underappreciated. We need to get hospitalist programs the right size for productivity and compensation," he says.

Karen M. Cheung is associate editor at HCPro, Inc., contributing writer for HealthLeaders Media, and blogger for www.MedicalStaffLeader.com. She can be contacted at kcheung@hcpro.com.