Return on investment: Docs generate $1.6M each year for hospitals

Despite the push to transition healthcare to value-based care, physicians continue to generate millions of revenue for hospitals, according to an analysis from Merritt Hawkins. Indeed, the survey finds that each physician produces $1.6 million a year in net revenue for his or her affiliated hospital.

Surgical specialists are the biggest revenue generators for hospitals, with full-time orthopedic surgeons earning their hospitals an average of $2.7 million a year, according to the survey of 3,500 healthcare chief financial officers that asked about revenue generated by 18 specialties over the past 12 months. Family physicians also net their hospitals $1.49 million a year, according to the survey.

In theory, value-based models should result in lower volumes of physician services and therefore less revenue generated by those physicians. However, the survey numbers suggest the move toward value-based care as opposed to concentrating care in the more lucrative specialties is slow going thus far, Merritt Hawkins vice president of communications Philip Miller said in a statement to the press.  

"We are doing a better job with value-based care, bundled payment, medical homes or whatever model is in use, but the demand for healthcare services and utilization is up across the country," Merritt Hawkins Senior Vice President Travis Singleton told Forbes. "The volume is just a level that we have never seen."

Despite the hard deadlines set by the federal government, this is just the latest news suggesting sluggish progress for hospitals attempting to transition. Last October, a Government Accountability Office report found Medicare's value-based purchasing program, which ties financial penalties and rewards to care quality, has had minimal effect on outcomes in its first three years, FierceHealthcare previously reported. Hospital leaders have also been slow to adopt population health management strategies that are a vital part of the value-based transition, according to a February survey from Numerof & Associates.

To learn more:
- download the analysis (.pdf)
- here's the Forbes article