MD Ranger’s 2023 Report: New Benchmarks Suggest Upward Pressure on Hospital Physician Contracts

MENLO PARK, Calif.--(BUSINESS WIRE)--MD Ranger, Inc. (“MD Ranger”) today announced the publication of new physician compensation benchmarks based on 2022 data. New benchmarks illustrate the significance of payments to physicians as a major component of hospital spending. According to the MD Ranger database, the average hospital spends $9.6M annually on non-employment physician arrangements.

MD Ranger’s 14th year of reporting features thousands of benchmarks derived from a database of more than 50,000 contracts from over 225 hospitals and hundreds of health care providers across the US, making it the largest survey of non-salaried physician payments. Benchmarks include ED Coverage, Medical Directorships, Administrative Services, Hospital-Based Services, Medical Staff Leadership, Telemedicine, Diagnostic Testing, and Clinical Hourly Rates. Salary and productivity benchmarks are also available and will be updated in the coming months. This year, MD Ranger reports 17 new physician services, including per delivery payments, neuro-hospitalists, and trauma critical care payments.

While payment rates in the MD Ranger database are very stable, the company observed large increases in both hospital-based arrangements and ED call contracts in 2022. Market forces such as post-pandemic labor shortages, reduced Medicare payments, and increased patient load likely contributed to much larger than expected increases in many payment rates. Penny Stroud, Founder and CEO of MD Ranger states “The COVID-19 pandemic exacerbated the challenges associated with physician contracting. An aging workforce, increasing specialization, and the growing divide between inpatient and outpatient physician practice continue to drive payment rates up. Benchmarks have increased the most in ED call payments and hospital-based group arrangements, with specialties like ENT, Oral/Maxillofacial, and Pediatric Surgery increasing significantly. Payment for gastroenterology services continued to rise, with a 13% rise in median call pay and 34% increases in ERCP and other GI procedures. Trauma Surgery, Anesthesia, and General Hospitalist services command the highest annual median payments for hospital-based services, each costing more than $1.5M in total payments”.

Key findings from the 2023 benchmarks include:

• ED call payments experienced the largest increases in several years. Of the 54 call services, only 24% declined at the median while 67% increased, including 30% of services increasing more than 10%. However, for the services that declined at the median, most increased at the 75th percentile, indicating increasing spread between the median and 75th percentile. Services with more than 20% increases include ENT, Pediatric Surgery, and Obstetrics. According to the MD Ranger database, the average hospital spends just over $4M per year on ED coverage payments alone with the average hospital having 12 paid positions.
• Since 2018, payments for Critical Care/ICU have more than doubled, from a median per diem coverage rate of $1,880 to $4,050 in 2023. With recent changes in the Medicare Fee Schedule and an aging population, MD Ranger anticipates continuing pressure on these arrangements.
• MD Ranger observed increases in annual payments for administrators and committee members such as Credentials Committee, Practitioner Health and Wellness Committee, Peer Review, and Patient Safety Officer. Payments for Credentials Committee have nearly doubled since 2021. While more annual payments increased than decreased, annual payments overall remain relatively stable from last year to this year. Since the late 2010’s, MD Ranger has observed slight decreases in annual hours across services although there are exceptions.

Health care providers use MD Ranger to set payment rates, document fair market value, and comply with federal Stark and anti-kickback regulations. MD Ranger is used by hundreds of healthcare organizations, including hospitals, health systems, trauma centers, medical groups, LTACs, outpatient providers, and critical access facilities.

About MD Ranger

MD Ranger partners with leading health care provider organizations to provide comprehensive market data, simplify the FMV process and document physician transactions efficiently and cost-effectively.