On-Call Payments To Physicians Reach Critical Mass

Sixty-two percent of physicians in group practices receive on-call compensation from hospitals, according to a survey by the Medical Group Management Association (MGMA). That includes 58 percent of providers in non-hospital-owned practices.

More hospitals are compensating physicians for coming in on an emergency basis, and they’re paying more for those services, the MGMA says. The highest-compensated are neurosurgeons, who receive $2,000 per day for on-call services. By comparison, pediatricians receive $895, anesthesiologists, $800, urologists, $500, and family physicians, $300, on average. There are some large regional variations: For instance, general surgeons in the East are paid $500 daily, while their peers in the Midwest get $1,000. Physicians in nonsurgical specialties earned more than twice as much in the West as in the South.

As the recession deepens, hospitals are hearing more requests from physicians for financial support, including employment and practice buyouts. According to an AHA survey conducted last fall, more than half of hospital CEOs reported such requests. Of those executives, 83 percent said that physicians wanted more pay for on-call and other services. These demands, which hospitals can ill afford to ignore, are weighing down some institutions. For example, Maryland hospitals, which reported a negative 13.5 percent margin in the fourth quarter of 2008, paid $120 million to physicians for on-call and other services. That was double the amount they paid five years earlier.

The problem is that physicians—and particularly higher-paid surgeons and medical specialists–don’t want to come in to treat emergent patients who may be uninsured or on Medicaid. They may not get paid much or at all for these services unless the hospital reimburses them—and they may also be sacrificing income that they could be earning in their offices or surgery centers. The old implicit contract of performing these services as a community benefit or in return for hospital privileges seems to be unraveling in many areas, although some hospitals still enforce bylaws that require doctors to take call without extra payments.

Physicians have hospitals over a barrel because the facilities need particular specialties to take care of patients. An AHA survey in 2007 found that while emergency-department visits were increasing, 55 percent of hospital administrators reported difficulties in providing specialty coverage. While some of this was due to physician shortages, much of it reflected the reluctance of physicians to take call.

One response of hospitals has been to employ more and more physicians, including both primary-care doctors and specialists. While many other factors have helped produce this trend, a recent study in Health Affairs flatly states,

“Hospitals employ specialists [partly] because of the increasing difficulty of finding specialists to take call for the ED and admitted patients who need consultation. Some hospital respondents stated that they recently decided to hire physicians in certain specialties in part because they believed that this would be less expensive than continuing to pay them $1,000 or more per day simply to take call.”

This is one more example of how everything in healthcare is related to everything else. As the number of uninsured and poorly insured people rises, physicians are less willing to treat them, either in their offices or the hospital. As a result, hospitals are forced to hire more physicians, changing the balance of power between them and doctors. It will be very interesting to see how this dynamic shifts if insurance coverage is dramatically expanded.