By Kurt Mosley
Kurt Mosley, VP of Business Development, The MHA Group
There is an old saying that I am fond of using when discussing the relationship between doctors and hospitals – “without doctors, hospitals are simply expensive hotels with no guests.”
Though healthcare delivery has changed dramatically in many ways – especially in recent years, one fundamental paradigm has remained the same – physicians still refer patients to hospitals and they are still the key drivers of both patient care and revenue throughout the health system. Indeed, the most powerful tool in healthcare remains the physician’s pen. Hospital patient admissions and discharges, tests, treatments, procedures – all require a physician’s signature.
That is why physician recruiting is a strategic priority for virtually every hospital in the United States. Physicians are the key providers of care and are obviously critical to any hospital seeking to offer quality medical services to their communities. However; they are also a vital source of revenue to hospitals. According to a 2009 survey by AMN Healthcare, 95 percent of hospital CEOs consider physicians to be a very important source of revenue for their facilities.
Just how important a source is underlined by a survey Merritt Hawkins periodically conducts, which tracks the average amount of revenue physicians in various specialties generate on behalf of their affiliated hospitals per year. According to Merritt Hawkins’ newly released 2010 Survey of Physician Inpatient/Outpatient Revenue, the overall average amount of annual revenue a single, full time equivalent physician generates for his or her hospital is $1.5 million. This includes revenue generated by patient referrals, tests, treatments and procedures conducted in the hospital.
The survey examined 17 different medical specialties and includes an average amount of revenue generated by one FTE physician in each specialty.
Neurosurgeons topped the list of specialists examined in the survey in terms of annual revenue generated. According to survey data, a single, full-time neurosurgeon generates an average of $2,815,650 a year on behalf of his or her affiliated hospital. Other high revenue generating specialists include invasive cardiologists ($2,240,366 a year), orthopedic surgeons ($2,117, 764 a year), general surgeons ($2,112,492 a year) and hematologists/oncologists ($1,485,627 a year). The survey also indicates that primary care physicians also generate substantial revenue for hospitals. According to the survey, a general internist generates $1,678,341 a year on average for his or her affiliated hospital, a family physician can generate $1,622,832 a year, and pediatricians only generate $856,154 a year.
Merritt, Hawkins last conducted the survey in 2007, when the average annual revenue generated per physician across all specialties was $1,496,432, a number slightly lower than the 2010 average. That average revenue increased even during a recession suggests that physicians continue to provide a high level of hospital-based services and are seeking closer ties with hospitals, including employment.
The survey also points to the importance of physician recruiters, who are responsible in many ways for the quality of care hospitals provide through the recruitment of well trained, motivated clinicians. These physicians also are essential to the financial well being of hospitals, and the survey quantifies the significant contributions recruiters make to the bottom line when they are able to secure revenue producing doctors.
The survey offers some interesting data for anyone interested in physician recruiting or the general topic of healthcare economics. I would be happy to email a copy of the survey to readers who send me an email at kurt.mosley@amhhealthcare.com.
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Kurt Mosley is Vice President of Strategic Alliances for AMN Healthcare, the nation’s largest healthcare staffing and management services company and the parent company of Merritt Hawkins and Staff Care. He can be reached at kurt.mosley@amnhealthcare.com.
