Hospitals latching onto physician staff with pay, employment

Three-quarters of hospitals and health systems report increased physician staffing last year and plan to continue the trend in 2012, according to consulting firm SullivanCotter. Healthcare providers over the past 12 months reported adding an average 12 specialists and nine primary care physicians to their staff. Three-quarters of them also said they plan to increase physician staffs and mid-level providers during the next 12 months.

"These data are consistent with the labor market shift in physician employment that has been occurring over the past few years," SullivanCotter Practice Leader for Physician Compensation Kim Mobley said in a press release today.

Physician employment soared 32 percent from 2000 to roughly 212,000 physicians in 2010, FierceHealthcare reported yesterday. That means hospitals employ almost 20 percent of all physicians. In addition, hospitals and health systems are reacting to the trend, as two-thirds (67 percent) of hospitals and health systems are seeing more requests from independent physician groups about employment, according to an October MedSynergies Inc. and HealthLeaders Media report.

"We expect this trend to continue for some time," Mobley said. "This shift in the labor market has resulted in what has become a highly competitive labor market for physicians as organizations and physicians align to provide services in a high quality, more efficient manner."

How are hospitals retaining and compensating physicians? The SullivanCotter report found that healthcare organizations are using sophisticated compensation plans, based on productivity as well as performance. For instance, most surveyed organizations said physician compensation incentives are tied to patient satisfaction (74 percent) and/or quality (72 percent). Although the amount of compensation typically tied to physician performance has been about 3 percent to 5 percent, it is expected to increase to about 7 percent to 10 percent of physician total cash compensation, according to the press release.

For more information:
- read the press release
- here's the report (sub. req.)

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