Practice Management

Resetting your compensation

Using the State of Hospital Medicine Report to bolster your proposal


In the ever-changing world of health care, one thing is for sure: If you’re not paying attention, you’re falling behind. In this column, I will discuss how you may utilize the Society of Hospital Medicine (SHM) State of Hospital Medicine Report (SoHM) to evaluate your current compensation structure and strengthen your business plan for change. For purposes of this exercise, I will focus on data referenced as Internal Medicine only, hospital-owned Hospital Medicine Groups (HMG).

Dr. Paul Sandroni, director of operations, hospitalists, Rochester (N.Y.) Regional Health

Paul Sandroni

Issues with retention, recruitment, or burnout may be among the first factors that lead you to reevaluate your compensation plan. The SoHM Report can help you to take a dive into feedback for these areas. Look for any indications that compensation may be affecting your turnover, inability to hire, or leaving your current team frustrated with their current pay structure. Feedback surrounding each of these factors may drive you to evaluate your comp plan but remain mindful that money is not always the answer.

You may complete your evaluation and find the data could suggest you are in fact well paid for the work you do. Even though this may be the case, the evaluation and transparency to your provider team may help flush out the real reason you are struggling with recruitment, retention, or burnout. However, if you do find you have an opportunity to improve your compensation structure, remember that you will need a compelling, data-driven case, to present to your C-suite.

Let us start by understanding how the market has changed over time using data from the 2014, 2016, and 2018 SoHM Reports. Of note, each report is based on data from the prior year. Since 2013, hospital owned HMGs have seen a 16% increase in total compensation while experiencing only a 9% increase in collections. Meanwhile RVU productivity has remained relatively stable over time. From this, we see hospitalists are earning more for similar productivity. The hospital reimbursement for professional fees has not grown at the same rate as compensation. Also, the collection per RVU has remained relatively flat over time.

It’s simple: Hospitalists are earning more and professional revenues are not making up the difference. This market change is driving hospitals to invest more money to maintain their HMGs. If your hospital hasn’t been responding to these data, you will need a strong business plan to get buy in from your hospital administration.

Now that you have evaluated the market change, it is time to put some optics on where your compensation falls in the current market. When you combine your total compensation with your total RVU productivity, you can use the SoHM Report to evaluate the current reported benchmarks for Compensation per RVU. Plotting these benchmarks against your own compensation and any proposed changes can help your administration really begin to see whether a change should be considered. Providing that clear picture in relevance to the SoHM benchmark is important, as a chart or graph can simplify your C-suite’s understanding of your proposal.

By simplifying your example using Compensation per RVU, you are making the conversation easier to follow. Your hospital leaders can clearly see the cost for every RVU generated and understand the impact. This is not to say that you should base your compensation around productivity. It is merely a way to roll in all compensation factors, whether quality related, performance based, or productivity driven, and tie them to a metric that is clear and easy for administration to understand.

Remember, when designing your new compensation plan, you can reference the SoHM Report to see how HMGs around the country are providing incentive and what percentage of compensation is based on incentive. There are sections within the report directly outlining these data points.

Now that we have reviewed market change and how to visualize change between your current and proposed future state, I will leave you with some final thoughts regarding other considerations when building your business plan:

  • Focus on only physician-generated RVUs.
  • Consider Length of Stay impact on productivity.
  • Decide if Case Mix Index changes have impacted your staffing needs.
  • Understand your E and M coding practices in reference to industry benchmarks. The SoHM Report provides benchmarks for billing practices across the country.
  • Lastly, clearly identify the issues you want to address and set goals with measurable outcomes.

There is still time for your group to be part of the 2020 State of Hospital Medicine Report data by participating in the 2020 Survey. Data are being accepted through Feb. 28, 2020. Submit your data at

Mr. Sandroni is director of operations, hospitalists, at Rochester (N.Y.) Regional Health.

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