Published in the 2015 Today’s Hospitalist Compensation & Career Guide
RECRUITING HOSPITALISTS has never been easy, with demand outstripping supply. As a result, salaries have just kept going up, and this year is no exception. According to the 2015 Today’s Hospitalist Career & Compensation Survey, full-time hospitalists who treat only adults reported earning an average of $261,791 in salary and bonuses (excluding benefits). That figure represents a respectable 4% one-year increase and a hike of 11.4% since 2012.
But new hospitalists, those who have worked for two years or less, have made out even better, seeing bigger year-to-year gains than their more experienced colleagues. This year’s data found new hospitalists earning an average of $240,730, which is 11.7% more than that group reported earning in our 2014 survey, and 17% more than was reported for that category in 2012.
Those data point to the growing amounts that hospitalist employers “whether they’re hospitals, local groups, multispe cialty groups or national management companies “must pay to staff their ever-growing programs. It also illustrates a predicament many groups are wrestling with: Should hospitalists receive equal pay for equal work? Or should more experienced physicians be paid more for having more years under their belt?
Put more simply: What kind of relationship should there be between hospitalist compensation and experience?
Shrinking pay gap
If our latest survey results are any indication, the “equal pay for equal work” argument may be winning. The difference between compensation for newbies vs. pay for hospitalist veterans has been shrinking.
This year, for instance, hospitalists who have been in the field for more than 10 years reported earning a mean of $32,000 more than those working in hospital medicine only two years or less. Four years ago, that experience gap was nearly $57,000.
“The great debate now in our group is about the role of tenure,” particularly with respect to compensation, says Ryan A. Brown, MD, medical director for the 250-provider Carolinas Hospitalist Group, which is based in Charlotte, N.C., and a hospitalist at Carolinas HealthCare System NorthEast in Concord, N.C.
“The idea of paying for tenure seems to be going away,” Dr. Brown adds. “We are trying to figure out how to adjust compensation plans.” The problem is that those plans have to be attractive both to new recruits and to senior hospitalists already committed to the group.
To draw the best talent, Dr. Brown says a group must “pay attention to what the market is doing,” which means offering substantial base salaries. But at the same time, keeping that talent may be more difficult without tiered income levels that are tied to experience and years on the job.
While his program has been using a tiered compensation plan, group members are now considering replacing it. To bolster retention and reward seniority, he says, the group may offer more paid time off or merit bonuses for leadership activities.
Redesigning the compensation plan is further complicated by the fact that the group has grown as a result of recent mergers with several area hospitals. As a result, it has inherited seven different “legacy” payment plans that now have to be standardized in the redesign.
What’s left for quality incentives?
In Lincoln, Neb., Brian Bossard, MD, is founder and CEO of Inpatient Physician Associates, a private hospitalist group that manages hospitalist programs on four campuses in three communities with 47 physicians and advanced care professionals. His group is now rethinking how to compensate hospitalists at both ends of the experience spectrum.
Part of the problem, says Dr. Bossard, is that it has always been challenging to recruit physicians to the Midwest. But lately, that dilemma has been compounded by competing health systems in his market raiding local groups like his for talent to fill their vacancies. Those systems invariably employ an unsustainable model, offering higher starting salaries to lure physicians away.
In response, Dr. Bossard has had to raise salaries for younger recruits, but he worries that may hurt retention, with less money in the pot for tiered salary schedules to reward tenure. “We have traditionally rewarded tenure,” says Dr. Bossard, “but we are always considering appropriate incentives to be able to compete in the market.”
Sometimes, Dr. Bossard feels like he’s caught in the middle of a generational divide. On one side are experienced physicians expecting tiered salaries that reward years of service. On the other side are younger physicians experiencing a job market that offers an exceedingly high salary from day 1.
Dr. Bossard feels he’s being squeezed by rising salaries another way. When your group philosophy and that of the hospital where you work believes you should perform as a data-driven organization, how do you set base salaries high enough to recruit, but not so high that compensation bears no relation to RVU-defined productivity?
“In some ways, it’s the opposite of what the trends have been in terms of pay for performance,” he says. Nevertheless, what he is seeing in the market as a result of competition is “really high starting salaries with less of an emphasis on experience “and with little focus on quality incentives.”
A jump in regional pay
While Dr. Bossard’s group has had to bump up compensation for new hospitalists, our salary data find that pay is growing in the Midwest, and not just for those who are new to the specialty. According to our 2015 data, hospitalists in the Midwest reported a 10% increase in compensation for a mean of $262,708. No other region this year saw a comparable increase.
While compensation in the South remains substantially higher than in the Midwest, for instance, pay for hospitalists in the South grew only 4% over the previous year. Compensation for hospitalists in the Pacific region, by comparison, grew only 3.6%.
The big jump in pay in the Midwest comes as no surprise to Mary Frances Barthel, MD, chief quality and safety officer for Blessing Health System in Quincy, Ill. Dr. Barthel is the former hospitalist program director for the hospital’s Cogent Healthcare group, which merged with Sound Physicians last year.
“It’s totally supply and demand,” she explains. The Midwest hosts fewer medical schools, which means a smaller homegrown job pool to recruit from. But with health care reform reaching full steam, hospitals in the Midwest are facing the same financial and quality pressures as those on the coasts, so they’re ramping up program staffing to an unprecedented degree.
“There are still quite a few traditionalists in the Midwest who admit their own patients, but that’s starting to change,” Dr. Barthel notes. While the hospitalist movement may have been slower to take off in the Midwest, she believes that hospitals there are now catching up, as evidenced by the salary wars being waged in some communities.
As recruiters have long pointed out, the further hospitalists travel from a city, the more compensation they can command. The same holds true for one-time extras like sign-on bonuses.
Rebecca Bork recruits hospitalists to work in five of the 12 hospitals owned by Illinois’ largest health system, Advocate Health Care. Ms. Bork describes Chicago as the place where many physicians want to practice, while positions farther afield have historically required more money and incentives.
Previously, hospitalists needed few enticements to leave the hinterland for opportunities closer to all the city has to offer.
“Some physicians are willing to accept lower compensation to be closer to the city, but with many young physicians facing significant debt, they are initially willing to consider opportunities farther out for greater compensation,” Ms. Bork explains. “Lately, however, there seems to be more competition and offers to choose from. Even in Chicago, salaries and incentives seem to be rising.”
While hospitalists of all experience levels still want to work in the Chicago area, she has noted this recent change: Physicians on the move back to the city often expect the same compensation they’ve been able to command in the farthest suburbs and beyond.
“Young physicians new to practice are looking for increased compensation packages over previous years,” she points out, “as demand is rising for hospitalists and more opportunities now exist to choose from.”
Creative compensation approaches
Such anecdotes are a reflection of “a challenging trend” that Robert Bessler, MD, founder and CEO of Sound Physicians, which is based in Tacoma, Wash., says he is seeing these days. Sound Physicians is an organization focused on acute episodes of care that employs hospitalists, intensivists and transitional care providers.
“This industry is getting much more creative with various approaches to get people on board, like sign-on bonuses, loan repayment and retention strategies,” says Dr. Bessler. Rather than focus on salaries or standard bonuses, “we have explored gainsharing models with our partner physicians, created a partnership model that rewards tenure and engagement, and invested heavily in developing career paths for physicians to take on leadership roles.” Sound Physicians has more than 2,000 physicians providing care at more than 300 hospitals and post-acute facilities in 33 states.
At the same time, Dr. Bessler notes, hospital medicine has always been a field characterized by what he calls salary compression. “The 32-year-old hospitalist and the 52-year-old hospitalist do not have a big spread, despite their experience,” he points out. Sound Physicians does, however, offer a Path to Partnership track, which allows hospitalists who demonstrate leadership abilities within a group to become a partner after two years.
According to our 2015 survey results, more than half of new hospitalists reported receiving a sign-on bonus when they took their current job. The mean amount of those bonuses exceeded $16,000. And while survey data indicate that physicians in the Midwest were most likely to receive such bonuses, those incentives are being used across the country.
According to Lawrence D. Appel, MD, hospitalist medical director at J.C. Blair Memorial Hospital in rural Huntingdon, Pa., “Five or six years ago, when we were trying to hire people, we wouldn’t necessarily offer sign-on bonuses. We would just take them out to dinner. Now, you will be taken out to dinner and be offered significant upfront financial enticements.”
That trend raises an interesting question: Is compensation for newbies rising because hospitals have to offer more to get doctors’ attention? Or are hospitalists driving harder bargains to come on board?
“It’s definitely a combination,” says Dr. Appel. “But I often think it’s not that residents are being tough negotiators as much as hospitals are coming forward and recognizing their value.”
Karen Zeller, who is president of the national physician recruiting firm RM Medical Search & Consulting of Greenwood Village, Colo., says that “the high fever-pitch” in the search for hospitalists is due largely to the reimbursement pressure that hospitals are feeling from payers like Medicare. Now more than ever, she points out, hospitals can’t afford to have an understaffed or dysfunctional hospitalist program.
“Increasingly, hospitalists are a critical need,” she says. “If hospitals can’t recruit them, what do they do? Go on divert?”
That type of pressure “and the growing recognition that hospitalists are essential for success in all aspects of value-based purchasing “augurs well for boosting hospitalist compensation for everyone, not just for those entering the field for the first time or looking to switch jobs.
Another trend that is likely pushing up compensation across all experience levels, at least in many markets, is churn. While hospitalist programs have a long history of switching employment models “moving from in-house programs to outsourced ones and back again “some experts say the situation now may be especially volatile.
“There is fluidity there, with movement in and out of markets by the large hospitalist groups,” Ms. Zeller says. “It’s a changing for them, and they themselves are merging and acquiring, or being acquired.” While that churn has a big impact on hospitals, she adds, “it is also definitely feeding the demand for rising salaries.”
Why? Jasen W. Gundersen, MD, MBA, president of TeamHealth Acute Care Services, which employs nearly 2,100 medical and surgical hospitalists in 25 states, says that any consolidation, closure, or merger and acquisition among health systems or medical groups gives physicians “an opportunity to consider where they are working and how they are being compensated. These transitions can lead to pretty significant market increases.”
He adds that management transitions can cause physicians to panic and to reach out to recruiters who are bombarding them with job offers. “You have to make sure doctors’ compensation will match what they were earning or better,” Dr. Gundersen says. “That is what they want to hear.”
Leveling the compensation field
Swedish Health Services in Seattle faced a high-pressure job market a few years ago in which everyone was hiring. That led the group’s 90 hospitalists to take a hard look at their compensation plan.
Per Danielsson, MD, executive medical director of Swedish’s adult hospitalist program, says that group members eventually agreed to abandon their tiered comp plan and “pay the newbies the same salary” as veterans, a decision that allowed the program “to hire the real stars coming out of residency.” Since that change, “I haven’t heard a single doc voice a concern,” he adds. “They appreciate being able to bring in talented new docs who clearly respond to attractive compensation offers up-front when they have been on a starvation salary for seven or eight years and have a lot of debt.”
In addition to doing away with extra money for experience, the group also stopped paying a productivity bonus. Why? Group members were convinced by evidence that length of stay, readmissions and cost per case all increase once hospitalists start seeing more than 15 or 16 patients a day.
“If hospitals don’t take those factors into account,” says Dr. Danielsson, “they may be shooting themselves in the foot by looking only at productivity. When the number of daily encounters goes up, the length of stay often goes up too.”
The group also dramatically increased the amount of money hospitalists can earn through quality incentives, a strategy that made its employer “the health care system “happy. Some incentives, Dr. Danielsson explains, are easier to meet, such as achieving length of stay and mortality rates that are equivalent to or better than those of the average hospital in the Premier database. But another chunk is tied to meeting tougher “stretch goals,” like decreasing overall telemetry utilization.
The Swedish compensation plan is based on three tiers. “We compare ourselves to a combination of national and regional comp surveys,” he notes. Tier 1 is a base salary at the 25th percentile, while tier 2 consists of meeting quality metrics based on hospital averages in the Premier database.
Then there’s tier 3. “If you meet those stretch goals,” says Dr. Danielsson, “the compensation goes to around the 75th percentile.”
Hospitalists: critical hires
While rising compensation levels can be challenging, Dr. Appel in Pennsylvania thinks they make sense, given the “thousand different things” that now make up hospitalist practice. “We are being viewed as the leaders of patient experience,” he says, as well as instrumental in “keeping subspecialists on board by comanaging or admitting their patients.”
That ever-increasing scope of practice means that the concept of “we’re not recruiting” doesn’t exist anymore, adds Sound Physicians’ Dr. Bessler. “We don’t see that anywhere.”
And as recruiting goes, so goes compensation. Hospitals are “feeling very desperate” about recruiting and retaining hospitalists, explains recruiter Ms. Zeller. The pressure to fill hospitalist positions also influences “specialty and primary care recruitment because everybody wants to know there is a full hospitalist team to take care of their patients. You need them, and if you don’t have them, you are closing your doors.”
Deborah Gesensway is a freelance writer who covers U.S. health care from Toronto.
THE MAJORITY OF HOSPITALIST CONTRACTS now include some ability to earn extra money, either by working longer and harder (productivity bonuses) or by improving outcomes and processes of care (quality incentives). But very few of those contracts include a downside risk. Base salaries continue to rise substantially.
Hospitalists tend to look at bonuses as “the extra on top and don’t consider it part of their compensation when comparing offers,” says Jasen Gundersen, MD, MBA, president of TeamHealth’s Acute Care Services. “In most markets, they are more likely to take a better base with less overall potential than a lower base with a higher overall potential. They are going to take the sure thing.”
In Dr. Gundersen’s experience, all hospitalists tend to be risk-averse, whether they’re just starting out or are seasoned veterans. That’s why salary surveys such as Today’s Hospitalist’s are essential in today’s market, notes Ryan Brown, MD, the medical director of the Carolinas Hospitalist Group in Charlotte, N.C.
“To be able to recruit, you have to be at the median compensation level,” Dr. Brown says. “Even if I am offering a greater upside” through productivity, quality, or leadership or experience bonuses and incentives, “people won’t come without those guaranteed dollars.” He also finds that hospitalists across all experience levels share that same attitude.
That’s not the case with physicians in many other specialties, Dr. Gundersen says, where doctors have historically accepted having their compensation linked to productivity and workload standards.
Every medical specialty has its reputation among recruiters, and hospital medicine is no different. Their reputation, according to several recruiters, is that when hospitalists compare offers, they look first and foremost at the money. For other specialists, the deciding factor may be the call schedule or operating room equipment and amenities.
But while the size of a base salary might be the deciding factor for recruitment, the same does not seem to hold true for retention. Although many new hospitalists may join a group for the money, “once they get here, they tend not to leave just because of money,” Dr. Brown says. “They tend to leave because of things like culture.”
The 2015 Today’s Hospitalist survey backs up that assertion. While hospitalists put compensation near the top of their list of factors that are most important when considering a new job, even more important to them is work schedule. Also essential are “collegiality,” quality of care and program location.
FAMILY MEDICINE-TRAINED HOSPITALISTS are a growing segment of hospital medicine, now making up about 15% of full-time adult-only hospitalists who responded to the 2015 Today’s Hospitalist Compensation & Career Survey. In 2012, they accounted for 8% of respondents.
According to our survey, however, family-medicine trained hospitalists earn on average slightly less than their colleagues who trained in internal medicine: $260,690 vs. $262,120. This is despite the fact that family-medicine trained hospitalists are less likely to work in academic centers or on teaching services, which pay less, and are more likely to work as nocturnists, which pays more.
Hospitalists who trained in family medicine also reported earning more from moonlighting on top of their full-time work. An average of 15% of their income came from working extra shifts, compared to 12% for hospitalists overall.
Family medicine hospitalists also reported working at smaller hospitals on average (240 beds compared to 300-bed hospitals reported by full-time adult hospitalists overall) and in smaller groups (12 FTEs vs. 16).
According to Jasen Gundersen, MD, MBA, president of TeamHealth Acute Care Services, and himself a family medicine-trained hospitalist, a small minority of hospitals remain “biased against” this training and still have staff bylaws preventing them from being credentialed.
“We have some programs we have been unable to staff that have turned away incredibly well-trained doctors because they trained in family medicine,” Dr. Gundersen says. “We have people who try to cross it out of our contracts. It doesn’t make sense, but it happens all the time.
NEW HOSPITALISTS “those who have worked in the profession for two years or less “differ from their senior colleagues in more ways than just the compensation they collect. Here are some of their traits as reported in this year’s Today’s Hospitalist survey:
- They are more likely to work for national hospitalist management or locum tenens companies and universities than full-time hospitalists treating adults in general. They are less likely to work for multispecialty/primary care groups or hospitals.
- Their compensation arrangement is much more likely to be a straight salary. Thirty-five percent of newbies say they are paid a straight salary, with no incentives, bonuses or productivity component.
- They are more likely to have trained in family medicine than hospitalists in general.
- They report doing less committee and quality improvement work, hospital leadership, group management and recruitment than their colleagues. On the other hand, their rates of involvement with informatics and teaching exceed that of more experienced colleagues.
- Their mean age in this survey was 35, while the mean age for hospitalist respondents overall was 44.”