Physicians are major drivers of hospital revenue, generating about $2.4 million each year, according to a new survey from Merritt Hawkins.
That average is up more than 50 percent from 2016, according to the physician search firm. Merritt Hawkins is also a company of AMN Healthcare. For hospitals, the return on investment is high––family physicians have an average starting salary of $241,000 and generate nine times as much revenue, the survey found. Even for a higher salary, the return is still huge; orthopedic surgeons with an average annual salary of $531,000 returned six times as much revenue.
The findings come at a time when healthcare jobs are some of the toughest to fill, thanks to rising demand for services and a tighter employment market. Physician employment in 2018 surged with the demand.
Of physician specialties, cardiovascular surgeons generate the most net revenue for hospitals, about $3.7 million on average per year. Invasive cardiologists generate an average of $3.5 million, while neurosurgeons generate $3.4 million and orthopedic surgeons netted $3.3 million.
Average revenue generated by physicians increased across all specialties since 2016––the last time Merritt Hawkins conducted the survey. Beyond specialists, family physicians generate an average of $2.1 million in net revenue annually and general internists generate almost $2.7 million.
The survey asked hospital chief financial officers to quantify how much revenue physicians in 18 specialties generated for their hospitals in the previous 12 months, including net inpatient and outpatient revenue.
“The value of physician care is not only related to the quality of patient outcomes,” Travis Singleton, Merritt Hawkins executive vice president, said in a statement. “Physicians continue to drive the financial health and viability of hospitals, even in a healthcare system that is evolving towards value-based payments.”
What is helping drive up revenue is the higher cost of a hospital stay, according to Singleton. This has occurred even as inpatient stays have remained relatively flat in recent years. The number of outpatient stays, however, has more than tripled since 1975, the survey read, and the cost has grown, too.
Furthermore, costs are going up as patient acuity rises and demographics change with an aging population.
“Demographics are our destiny,” Singleton stated. “New delivery models that promote prevention, population health and fee-for-value are laudable innovations, but they don’t change the basic facts. People get older and require more medical care, with much of it ordered by or directly provided by physicians.”