How Much Revenue Do You—and Your Practice—Generate for Your Hospital?

How Much Revenue Do You—and Your Practice—Generate for Your Hospital? Posted By:
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Merritt Hawkins, a large search firm specializing in physicians and advanced practice providers (APPs), has published their periodic survey report detailing the revenue generated by physicians for their affiliated hospital(s), and the numbers are both staggering and increasing significantly. Independent and employed physicians generated an average of $2.38 million each for their affiliated hospitals, a 52% increase from the $1.56 million reported on the last Merritt Hawkins survey in 2016.

This survey focuses on both inpatient and outpatient revenues from admissions, tests, treatments, and procedures performed or ordered by physicians. Interestingly enough, it does not explicitly carve out those same functions generated by APPs, so it would appear that these are all credited to the physicians in these practices, clearly a flaw in their data. But by inference, PAs and NPs can extrapolate their value to a healthcare system from these data.

Of the 18 specialties included in the survey, cardiovascular surgeons generated the most revenue, generating an average of nearly $3.7 million a year each on behalf of their affiliated hospitals. This was closely followed by three other high-revenue specialists: invasive cardiologists at $3.5 million each, neurosurgeons at $3.4 million, and orthopedic surgeons at $3.3 million.

A surprising piece of information was that family physicians (FPs) added an average of $2.1 million in net revenue annually for their affiliated hospitals, while general internists generated almost $2.7 million—more than the average revenue generated by some nonprimary care specialists, such as nephrologists, neurologists, ophthalmologists, otolaryngologists, and psychiatrists.

What was particularly interesting to me was the fact that Merritt Hawkins examined average salaries for each specialty and compared that to average revenue generated. FPs and general internists more than pulled their weight in terms of these ratios. For example, while employed FPs were paid an average starting salary of $241,000, they generated nine times that much in hospital revenue. By comparison, orthopedic surgeons who averaged $533,000 in starting salary generated six times that much in hospital revenue.

At least based upon these ratios, primary care physicians—and by inference, primary care APPs—may actually be significantly undervalued on many levels in our current healthcare system.

Reference
  • Merritt Hawkins. Survey: physicians generate an average $2.4 million a year per hospital. www.merritthawkins.com/uploadedFiles/MerrittHawkins_PressRelease_2019.pdf. Accessed March 4, 2019.

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Filed under: Practice Management/Career

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