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Study deconstructs physician-generated hospital revenue

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Despite the recent growth of value-based reimbursement,  the average net revenue each physician generates for his or her hospital rose 7.7 percent, to $1,560,688 at the start of 2016 from $1,448,458 in 2013, says a new report from physician-search firm Merritt Hawkins.

“The 2016 survey suggests that emerging global/value-based payments have yet to reduce the revenue-generating power of physician specialists,” the report stated. The fee-for-service model remains overwhelmingly dominant. It has helped make the U.S. healthcare system by far the world’s most expensive.

The money involved included net inpatient and outpatient revenue derived from patient referrals, tests, prescriptions and procedures performed or ordered in the hospital.

Medscape summarized part of the report:

“Four types of procedural specialists — orthopedic surgeons, invasive cardiologists, neurological surgeons, and general surgeons — all generated more than $2 million a year in net revenue for their hospitals in 2016….At the top were orthopedic surgeons, who generated an average of $2,746,605 on behalf of their affiliated hospitals, which is up slightly from the 2013 figure.”

“Just behind the orthopedic surgeons were invasive cardiologists, who generated an average net revenue of $2,448,136 in 2016, compared with $2,169,643 in 2013. Neurosurgeons racked up an average net of $2,445,810, which is a big jump from $1,684,523 in 2013. …General surgeons contributed $2,169,673, which is a marked increase from $1,860,566 in 2013.”

But net revenue generated by primary-care physicians  fell 10.5 percent from 2013. Hospital revenue from family practices dropped more than 38 percent  and from pediatricians more than 18 percent.

However, general internists’ contribution to hospital net revenue stayed virtually unchanged.

Merritt Hawkins said that the decline in primary-care physicians’ contributions to revenue “may be a result of risk-bearing reimbursement models, where primary-care physicians and their employers are penalized for exceeding budgets.”


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