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Compensation: experience pays off

November 2014

Published in the 2014 Today’s Hospitalist Compensation & Career Guide

WHEN IT COMES TO COMPENSATION, hospitalists are on a roll. According to the 2014 Today’s Hospitalist Compensation & Career Survey, income has grown to a mean of $251,665 for full-time hospitalists who treat adults.

That’s up slightly from the previous year, and 7% higher than average pay two years ago. Over the seven years that Today’s Hospitalist has been surveying readers, full-time adult hospitalists have seen their earnings jump 26%, more than double the rate of inflation over that period.

While that’s the big picture, some hospitalist subgroups have fared ever better. The average compensation of veteran hospitalists “full-timers working in the field for more than 10 years “is close to $275,000, a 27% increase since 2008, when Today’s Hospitalist starting tracking the data. Hospitalists with two years or less of experience, by comparison, report a mean of $215,322, only 17% more than hospitalists in that category earned seven years ago.

And dedication to a group pays off, according to our survey results: Hospitalists with the same group for a decade or longer earn even more. The average compensation of hospitalists in their current job for 10 or more years tops $282,500.

That’s all good news in the eyes of hospital medicine-watchers, particularly for those who are concerned that the profession may appeal to only young doctors before they take on a fellowship, or for physicians who want to stay in the field but burn out.

“It means that people are staying in this specialty,” says Leslie Flores, a partner with Nelson Flores Hospital Medicine Consultants, who is based in in La Quinta, Calif. “We had been afraid that this might be something that people did for a few years and then moved on.”

Here’s a look at factors that our survey say affect hospitalist pay, from years of experience to geography, and what impact they could have on your compensation.

Veterans’ pay
The finding that veteran hospitalists earn more than newbies is somewhat surprising, Ms. Flores notes. She points out that only “a small but meaningful minority” of hospitalist programs vary their physician salaries by experience.

At the same time, better compensation for more experience may imply that staying put doesn’t mean stagnating. According to Ms. Flores, our survey’s productivity data indicate that there is more to a lucrative practice in hospital medicine than just pulling extra-long, extra-busy shifts. In fact, older survey respondents reported working fewer shifts per month on average than younger colleagues and seeing slightly fewer patients during day shifts.

“I think more senior hospitalists are finding other things to do that make their work life more interesting and pay them more,” Ms. Flores speculates. For example, veteran hospitalists may be filling (and being paid for) a part-time job as medical director of a skilled nursing facility or as medical director of a wound care unit, or as physician advisor for utilization review at their hospital.

“Or maybe they are providing cardiac stress tests or hyperbaric treatments or finding other specialty niches that might be available only to more senior people in the group,” Ms. Flores says. “While these things are worth money, they also make a job more interesting and sustainable.”

Survey data support that supposition: More veteran hospitalists report receiving additional compensation for duties other than patient care than their less-experienced colleagues.

For instance, 43% of survey respondents in their current jobs for 10 or more years were paid for administrative duties compared to only 20% of those with two or fewer years at their current job and 32% of those with three or four years. As for committee work, 30% of veteran hospitalists reported receiving additional compensation, compared to 14% of new hospitalists and 20% of those in their jobs between three and nine years.

Upward pressure?
While better pay for veteran hospitalists is good news for physicians planning to stick with hospital medicine, some analysts warn that hospitalists shouldn’t assume that their compensation will continue to rise with years on the job. As hospitals grapple with a shrinking census, penalties for not meeting quality and patient-satisfaction targets, rising technology costs, and shifts in reimbursement, they are bringing new scrutiny to hospitalist subsidies, which are a key factor in compensation.

Half of the respondents in the Today’s Hospitalist survey, for example, report working in groups that receive subsidies. And hospitalists responding to the survey who work in subsidized groups report earning on average 10% more than those in unsubsidized programs: $267,880 vs. $240,210.

(According to the 2014 Society of Hospital Medicine survey results, the median subsidy now tops $156,000 per physician, although hospitalists at some groups in the 75th percentile receive subsidies well north of $200,000.)

“I think the world is going to look a lot different two years from now as hospitals awaken to the subsidy issue,” predicts R. Jeffrey Taylor, president and chief operating officer of the North Hollywood, Calif.-based IPC The Hospitalist Company Inc., which employs 2,500 hospitalists in 400 acute care hospitals and 1,100 post-acute care facilities nationwide. “I think that smaller towns will be more immune to changes in hospitalist compensation than metro areas, but we believe those are over the horizon.”

Then there’s the rise in the use of nurse practitioners and physician assistants, says Kenneth R. Epstein, MD, MBA, chief medical officer of Hospitalist Consultants Inc., a division of the large Traverse City, Mich.-based national physician staffing company, ECI Healthcare Partners.

“A lot more practices are figuring out how to use NPs and PAs,” Dr. Epstein points out. “As hospitals look at the cost of bringing in an NP or PA, that could level physician salaries. If you have lower-priced health care professionals doing much the same job, it’s harder for higher-priced ones to keep being paid more and more.”

Demand for services on the rise
But at CHI-Franciscan Health in Tacoma, Wash., associate vice president of hospital medicine Kimberly Bell, MD, sees pressure being put on compensation to rise, not fall. She also doesn’t see any move to cut back on 24/7 coverage, which is closely tied to hospitalist subsidies.

“Now, neurology wants us to admit all of their patients, as do the cardiologists and nephrologists,” says Dr. Bell. “At most of our facilities, 95% of the patients who come into the hospital are seen by the hospitalists. Even though we have been here for 20 years, the increased demand for our services keeps going up while our ability to recruit the people to do that work is not necessarily rising at the same pace.”

And while hospitalist compensation may be going up, it’s not rising the same everywhere and for everyone.

“Big hospitals, desirable locations, saturation of doctors, perhaps due to nearby residency programs: In those areas, our compensation is flattening,” says Jasen W. Gundersen, MD, MBA, hospital medicine president of the Knoxville, Tenn.-based TeamHealth, which employs about 1,200 hospitalists nationwide. On the other hand, “in smaller towns, an hour past a major airport” and especially in smaller hospitals where hospitalists have to take night and weekend call, “rates have to go up. The supply line is still very limited.”

Survey respondents who work in smaller hospitals report earning more on average than those in bigger ones. Full-time hospitalists in facilities with fewer than 250 beds, for instance, report a mean compensation that is $9,220 higher than hospitalists in hospitals with more than 250 beds.

Such variations, which can reflect urban vs. suburban and rural differences, “don’t surprise me at all,” Dr. Epstein says. In Denver, where he lives and works as a hospitalist, “salaries are lower.” But in rural areas where he hires, salaries must stay high to attract physicians.

“Physicians coming in to look at jobs are very savvy about the differences in employment offers,” Dr. Epstein says. “Applicants have multiple offers, and they are comparing them.”

Geography and pay models
Geography has long had a major impact on compensation of physicians of all stripes, and hospitalists are no exception. Over the seven years that Today’s Hospitalist has collected data, harder-to-recruit-to regions of the country have posted higher average compensation, and regional disparities are getting worse.

Hospitalists in the Northeast, for instance, reported a mean 2014 compensation of $230,846, compared to $273,863 in the Southwest, $265,441 in the South, $260,576 in the Pacific and $238,470 in the Midwest. Hospitalists in the Northeast now earn 16% less than their Southwestern colleagues “a gap that’s grown from 13% seven years ago. Since 2008, compensation has increased 30% in the South, 29% in the Southwest, 28% in the Pacific region, 25% in the Northeast and 17% in the Midwest.

Compensation models are another obvious source of difference in hospitalist pay, with physicians who are paid on pure productivity earning more than their salaried colleagues. But at times, the intersection of compensation plans and geography exaggerates pay differences.

Hospitalists in the Southwest and South, for example, continue to report much higher rates of compensation based entirely on productivity. While only 6% of all fulltime adult hospitalists nationwide say they’re paid only on productivity, 20% of hospitalists in the Southwest and 9% of those in the South say their compensation is 100% productivity-based. By comparison, that percentage was a scant 1% in the Pacific region, 3% in the Northeast and 5% in the Midwest.

The small group of hospitalists paid based on productivity, moreover, continues to report the biggest jump in compensation over the past seven years: 35%, compared to 27% for hospitalists receiving a straight salary and 26% for those with hybrid plans combining salary and productivity.

And contrary to most predictions, the trend is toward more fixed, less at-risk compensation. While 55% report a combination of salary and incentives, that percentage in 2008 was 62%. By contrast, the number of doctors on fixed salaries is gaining: 38% now, up from 31% in 2008. (The proportion of hospitalists compensated entirely on productivity has held steady over that time.)

The likely explanation? Supply and demand. “General medicine-trained doctors “especially new ones “are extraordinarily risk-adverse,” says TeamHealth’s Dr. Gundersen. “They are much more likely to take a job that has lower potential overall compensation but a higher guaranteed rate.”

Pay by employment model
Hospitalist compensation has also historically been affected by the type of employer physicians work for, with national management companies and local groups coming out on top. And while this year’s survey data support those trends, industry watchers say that shake-ups in the employment models of hospitalist groups could affect compensation in the specialty.

One noticeable trend, some analysts say, is the move by many hospitals and health systems to explore outsourcing arrangements. The keen focus of these companies on billings and collections, along with efficiency, has historically given a boost to physician compensation.

“There is more emphasis on coding and documentation at a lot of hospitalist companies because there is more pressure between salaries rising and reimbursement falling,” explains Dean Dalili, MD, MHCM, vice president for medical affairs for Hospital Physician Partners (HPP), a national hospitalist management company that employs about 150 hospitalists in 22 programs across 13 different states. Dr. Dalili works as a hospitalist at Wuesthoff Medical Center-Rockledge in Brevard County, Fla. “The only way to bridge the gap as subsidies come under more pressure is to provide training and incentives for doctors to optimize billings.”

While Dr. Dalili chalks about half of recent pay hikes to market demand, “has been driven by provider billing and productivity,” he says. “RVUs-per-encounter are improving, and charge capture and collecting have improved as a result of technology and software.”

And while it’s true that hospitalists who work for national hospital management companies and local groups tend to earn more on average, there are signs that the compensation gap among the various employment models is shrinking. Hospitalists employed by hospitals or health systems, for example, report a 29% increase in compensation over the past seven years, a bigger increase than hospitalists in other employment models.

Bonuses and incentives
Employer type is still a big factor in how much hospitalists earn from bonuses and incentives. While hospitalists on average reported that 14% of their compensation came from bonuses and incentives (amounting to $36,535), those employed by local groups reported seeing 16% ($46,725) from bonuses and incentives, and those in national companies reported 17% ($51,562).

That may be by design. IPC, for instance, has made a concerted effort to increase the upside potential of incentive pay while reducing its fixed salary portion. Even in competitive hiring markets, “we haven’t raised our base salaries,” Mr. Taylor says. “Our base salaries are relatively low.” Instead, IPC hospitalists earn about 40% of their income through quality and productivity bonuses.

“Our belief,” he notes, “is that if you are making as much as you want to make, you might not want to see one more patient or spend extra time during discharge to help prevent a readmission.”

In Tacoma, Wash., Dr. Bell says her ideal is an 80-20 split between fixed salary and incentive pay. But that’s a hard sell in harder-to-recruit-to facilities. “We are not there yet,” she says.

According to Dr. Epstein in Denver, much of that split comes down to age and experience. “If you are a new graduate, you want less at-risk and more guaranteed salary,” he says. “But if you are a veteran, you want to be compensated for working harder, and you want more productivity components. You are more comfortable with that.”

Biggest winners
And when it comes to bonus amounts, experience again pays more. The average full-time hospitalist working for at least 10 years in the field collected $37,235 in bonus incentives in 2014. Meanwhile, colleagues with two years or less experience earned $20,025, and those with three to nine years of experience banked around $30,000.

“We have something called the experience curve,” says HPP’s Dr. Dalili. “I’ve seen variations in productivity based on experience at a site more than I’ve seen higher base salaries for people who are older or who have more years of experience.” HPP pays all its hospitalists a set salary that doesn’t vary depending on experience or seniority. The company also offers them the opportunity to add up to 20% more based on productivity.

According to Dr. Dalili, that arrangement suits the veteran hospitalists in his programs just fine. “People who are long-tenured in hospital medicine,” he points out, “have seen their salaries grow because the whole market has grown very rapidly.”

But in Tacoma, Wash., Dr. Bell isn’t so sure that experience translates to more incentive and bonus pay. “I don’t know that veterans do better than younger hospitalists,” she says.

At Franciscan, hospitalists can earn bonuses based on core-measure performance, citizenship and productivity. Still, says Dr. Bells, it remains “an issue” for the profession that “the people who stick around quickly max out” on the amount they can earn. “There is only a small gap between what you come in at and your maximum pay,” she adds.

To earn more, Dr. Bell says, “people tend to diversify their income with other interests, like quality work, consulting or administration.” Because her programs have a higher turnover rate than the 8% national average reported by the Society of Hospital Medicine, Dr. Bell says her organization is considering alternatives, including retention bonuses. According to this year’s Today’s Hospitalist survey, fewer than one in 10 hospitalists receive retention bonuses. Among those who do, they collected a mean bonus of $14,600.

At the Knoxville, Tenn.-based TeamHealth, an effort is also underway to figure out how to reward seniority. But instead of retention bonuses, Dr. Gundersen prefers tiered compensation plans.

Starting this year, he explains, new hospitalists hired at the company’s new programs are receiving different base salaries reflecting their experience. The company is also working to “retrofit” existing compensation plans to account for seniority. In addition to a tiered base salary, TeamHealth’s hospitalists can earn between 10% and 15% more in productivity and quality bonuses.

“The field is so young that we are just beginning to see a whole number of people beyond the 10-year mark,” Dr. Gundersen says. “We are starting to need to figure out how to address those folks.”

Deborah Gesensway is a freelance writer who covers U.S. health care from Toronto.

Pediatric hospitalists: a shrinking pay gap

WHAT’S HAPPENING in compensation for pediatric hospitalists? According to the 2014 Today’s Hospitalist Compensation & Career Survey, pediatric hospitalists earned a mean of $201,389 “a 33% increase over what they reported earning in 2008, the first year that Today’s Hospitalist began surveying readers.

That’s still considerably less than what full-time hospitalists who treat adults earn, but the gap is shrinking. In 2008, pediatric hospitalists made only 75% of what their colleagues who treat adults earned. In 2014, however, pediatric-hospitalist compensation stands at 80% of that of hospitalists treating adults

The biggest earners

FULL-TME HOSPITALISTS treating adults earn on average $251,665, according to the 2014 Today’s Hospitalist Compensation & Career Survey. But who’s beating the average? Here are characteristics of hospital medicine’s biggest earners:

  • They work in the Southwest ($273,863) or the South ($265,441).
  • They work in the ICU ($269,750).
  • They work for groups that receive a subsidy ($267,880).
  • They commit to their jobs, spending 10 or more years in their current post ($282,500).
  • They derive more than 20% of their compensation from bonus or incentive pay ($296,500).
  • They work for national management companies ($265,710) or local private groups ($264,631).
  • They work a lot, working more than 20 shifts per month ($286,270), more than 200 hours per month ($263,640) and more than eight consecutive days regularly ($274,860). They also see more than 21 patients per shift ($295,454).
  • Their compensation is pegged entirely to productivity ($304,411).Ways to boost your paySURVEY RESULTS INDICATE that hospitalists have found some ways to earn extra pay.About 9% report being paid for taking call, with the mean amount earned per shift about $800. Hospitalists are much more likely to report those earnings if they work in small groups (with 1-4 hospitalists) and where nights are covered by beeper.

    About a quarter of hospitalists also report earning extra compensation for night coverage, administrative duties and seeing more patients than their colleagues. About 17% say they get paid for committee work. Less than 10% report pay for duties like teaching, catch work performed after scheduled hours, supervising physician extenders and informatics.

    About 8% of surveyed hospitalists earn a retention bonus, with the average bonus amount exceeding $14,000. The mean amount of time worked before hospitalists fully earn such bonuses is 4.2 years.

    How happy are you with your pay?

    IT’S NO SURPRISE, but people who earn more are happier with their income than those earning less. Among full-time hospitalists who treat adults and report being “satisfied” with their income, the average compensation is $261,750. That’s about $10,000 above the mean for the profession overall, according to the 2014 Today’s Hospitalist Compensation & Career Survey. Among those “dissatisfied,” their compensation is about $8,000 below the national mean: $243,333. Overall, 44% of respondents say they are “satisfied” with their compensation.

    Meanwhile, compensation doesn’t seem to track with burnout. Mean compensation was nearly the same for those who considered burnout to be a significant factor or those who did not.

    Here are characteristics of hospitalists more satisfied than average with what they make:

  • They work in smaller hospitals (under 250 beds).
  • They work for a local hospitalist group.
  • They have nights covered by residents.
  • They work fewer hours per month than average (160 vs. 179).
  • They see fewer than 10 patients per day shift on average, while the profession’s average is nearly 16.
  • They have worked in their current job for more than 10 years and plan to make a career out of hospital medicine vs. expecting to work less than five more years as a hospitalist.
  • They live out West. While 53% of hospitalists in the Pacific region report being satisfied with their compensation, that’s true for only 34% of those in the Northeast. Throughout the rest of the country, satisfaction rates hover in the mid-40% range.A portrait of Dr. Average HospitalistACCORDING TO THE 2014 Today’s Hospitalist Compensation and Career survey, which tallied the responses of 734 respondents, 552 of whom identified themselves as working full-time as hospitalists and treating adult patients only, the following portrait emerges:Two-thirds of respondents say they work at the only hospitalist group at their facility. These groups have an average of 17.1 full-time-equivalent (FTE) hospitalists on staff, and they work alongside an average of 4.3 FTE non-MDs. Two-thirds of respondents say their groups had turnover last year. Two-thirds also said their group plans to grow next year.

    They are most likely to have competing groups in their hospitals if they are in the Southwest. The split between those who work at large hospitals (more than 250 beds) and small hospitals (less than 250 beds) is nearly equal.

    Nearly half are employed by their hospital or health system. Another 16% work for a local hospitalist group, 13% for a national company, 12% for a multispecialty or primary care group, 7% for the university or medical school, and 3% for the VA. About 30% are part of a teaching service, and nearly three-quarters trained in internal medicine.

    Half work 12-hour shifts, and a third work 10- or 8-hour shifts. Nearly half report working seven consecutive days, with another fifth work five days in a row. On average, they work 15 shifts each month, amounting to 175 hours a month. Hospitalists working day shifts report having 15.4 patient encounters per shift on average, while nocturnists have just under 10. Four-fifths of their time is spent on patient care duties, while three in five hospitalists spend a minor amount of time on committee work and a third participate in group management.

    The average full-time adult hospitalist reports earning $251,670. Two-thirds received no pay increase from the year before. A slight majority reported dissatisfaction with their compensation. The top reasons for that dissatisfaction: They feel their responsibilities have increased while their pay has not, compensation has not kept pace with the cost of living, and hospitalists are paid unfairly compared to other specialties.

    Most of their compensation comes in the form of a salary, with 14% (amounting to $36,535 on average) in the form of incentives and bonuses.

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    WE’VE POSTED MORE THAN 50 CHARTS with details about hospitalist workload, coverage, shift length, work practices and many other factors that impact you. View results from the 2014 Today’s Hospitalist Compensation & Career Survey.