It’s About Value, Damn It!

By  |  September 20, 2010 | 

Mike Radzienda writes…

At a time when there is increasing pressure on hospitalists to adhere to strict external mandates on quality and safety, concerns in academia regarding more rigid work-hour restrictions, and a palpable need for hospitalists to be more engaged in non-clinical value-added work, I am dismayed at some interpretations of the recently released MGMA/SHM compensation survey.

On Monday, before I was able to even read my copy of the report, several news stories pounced on one bite from the survey. This take may, unfortunately, precipitate some blow back on those of us trying to build programs that transcend the myopic “entrepreneurial approach” to HM practice. My corporate office sent this to me Monday, just days after we finalized new contracts (and before I had even received my copy of the survey):

A Better Way to Pay Hospitalists?
There are some interesting—but hardly surprising—findings in a report from the Medical Group Management Association and the Society of Hospital Medicine that show that base salary impacts both productivity and overall compensation for hospitalists.

In plain English, the report shows that the more a hospitalist receives in base pay as a percentage of overall compensation, the less incentivized he/she is to add to his/her workload. Of course! They have nothing to gain monetarily by improving productivity. If anything, they are disincentivized—as any employee would be—to do more work for the same money.

A further breakdown of the data showed that median wRVUs were higher for physicians in practices that were not hospital-owned than for physicians in hospital-owned practices. Physicians working in practices that provide on-call coverage at night generated more wRVUs than physicians working in practices that provide on-site care at night.

In my humble opinion, the new report conveys great news for hospitalists vis-a-vis salaries; but if not interpreted from a global stance, it has the potential to undermine efforts by those trying to get “(hospitalists’ salaries)” out of the “loss” column of the CFO’s ledger and into the “operations” column.

As we move towards a value-based-purchasing model, the success of a hospitalist group will rarely be measured in terms of productivity. It will be measured by its ability to provide high quality, low cost care…period.

In the next iteration of the comp survey, I would like to see a column juxtaposed to the productivity metric that reads “VALUE.” Perhaps, by then, SHM’s “IQ>260 Committee” will develop a multivariable logistic regression analysis that estimates V (VALUE).

Here’s my Simple Caveman stab at it:

V= {[LOS/COST)] CMI +[CORE MEAS(PRESS GANEY)/readm rate]} 
          {[salaries/1-turnover rate]+(HAC)3}mortalities

Note that wRVU is NOT a variable.


  1. […] higher patient satisfaction, and a host of other issues that Mike referred to a few weeks back on September 20th.  But that will probably cost more on the blessed bottom […]

  2. M. Eugene Pruitt January 25, 2011 at 10:34 am - Reply

    Dear Mike

    After last Sunday’s performance, of how much value is the Chicago Bears third string quarterback? What do you think happened to Cutler’s knee? I think that he hyperextended it and therefore was not able to play because he could no longer back pedal without fear of falling.
    Marty Muntz and I are in mourning.
    Go Steelers!


    • Mike Radzienda January 26, 2011 at 4:21 pm - Reply

      Oh Doctor Pruitt!
      Glad to see you are still stirring the pot.
      I am confident Mr Cutler’s Q/C ratio will be questioned in the off season.
      Go Steelers!!

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