Incentives in Hospital-Based Agreements Continue to Grow

Unlike the majority of call coverage, leadership, and medical direction contracts, hospital-based agreements often include incentive payments. Having previously looked at what types of position are commonly contained within hospital-based agreements, let’s examine what sorts of incentives are most common to these hospital-based contracts using MD Ranger’s 2017 Physician Contract Benchmarks.


As we can see in the graph, the percent of hospital-based contracts that include incentive payments has nearly quadrupled since 2013, with almost 40% of contracts now including some type of incentive. The three most common indicators that hospitals use for incentive payments in hospital-based contracts are cost, quality, and patient satisfaction.

The data show significant spikes in all 3 main types of incentives from only 2016 to 2017. Cost component incentives jumped from 6% to 12%. Quality component incentives rose from 15% to 22%. Patient Satisfaction component incentives grew from 12% to 19%.

The increase in hospital-based agreements that include any incentive payments grew from 28% in 2016 to 39% in 2017. This serves as more evidence of the impact of pay-for-performance standards in hospital-based agreements.

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Hospital-Based Agreements Often Only Pay for Direction

We recently looked at both call coverage and medical direction analysis from MD Ranger’s 2017 physician contracting benchmarks. Let’s examine hospital-based service contracts and what components make up these sorts of agreements.


As the graph displays, the plurality of hospital-based service contracts for all services pay for only medical direction, with 33% of agreements involving only this component in the contract. However this component type breakdown varies significantly by service. For instance, stipends are the most common payment type for Hospitalists, Laborists, and Intensivists. For some services, such as Emergency, Pathology, and Radiology, agreements with only medical directorship payments or unpaid agreements are common.

The percent of contracts in each component combination have remained stable year over year in our benchmarks. The largest drop we have seen this year, when compared with 2016, is a drop in coverage only components from 16% to 8%.

Conversely, hospital-based contracts involving stipends saw slight increases since last year. Stipend only components jumped from 19% up to 23% while agreements containing stipends and other components rose from 13% to 17%.

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Research/Data Management Paces Leadership and Administrative Roles for Most Hours Worked

Last time, we tracked which medical directors worked the most hours annually by using MD Ranger’s 2017 Physician Contract Benchmarks. Let’s take a look at agreements for physician leadership and administrative roles and examine which services reported the highest median hours worked per year.


This graph shows the top six leadership and administrative roles with the highest number of annual hours. They are Chief of Staff, Utilization Management, Information Technology/EHR, Residency/Teaching, Case/Care Management, and Research/Data Management. Comparing the number of hours to benchmarks from previous years, you can see that there have been increases for several physician administrative roles in 2017, such as Residency/Teaching, Case Management, and Research/Data Management. However, after two years of increases, Chief of Staff hours have decreased from 2016 to 2017.

The set of leadership and administrative positions with the most annual hours remained relatively stable from 2016 to 2017. Quality Initiatives saw its annual hours dip in 2017 and is the lone service to no longer appear on the chart.

With the notable exception of Chief of Staff, most administrative and leadership positions have seen either a stabilization or a slight increase in the number of hours worked annually. This drives the trend in slight growth in annual payments made for these physician leadership and non-director administrative positions.

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Emergency Medicine Medical Directors Top the Charts for Most Hours Worked

Previously, we have investigated key trends in call coverage arrangements using MD Ranger’s 2017 physician contracting benchmarks. Now, let’s look at medical directorship agreements and examine which services reported the highest median hours worked per year.


This graph shows the five medical directorships with the highest median hours reported per year. They are Emergency Medicine, Ambulatory Services, Pathology, Trauma Surgery, and Cardiology - Heart Center. Comparing to the benchmarks from the past four years, you can see where hours have increased or decreased in scope. As you can see, the most dramatic changes are in Emergency Medicine, especially over the past two years.

The list of medical directorship positions with the highest reported hours remained mostly the same as last year, when Emergency, Trauma Surgery, Pathology, and Cardiology-Heart Center all also featured. Ambulatory Services, the only new service in the top 5, replaced Pediatric Surgery from the 2016 list.

One major trend we see is a continuing spike in hours worked in medical directorships in Emergency Medicine, well beyond the other top 5 services by hours per year. This stands in sharp contrast to the rest of the top services where the trends are leveling off or even decreasing.

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