2002 Physician Inpatient/Outpatient Revenue Survey

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2002 Physician Inpatient/Outpatient Revenue Survey


Merritt, Hawkins & Associates is a national physician search and consulting firm representing over 2,000 physician search engagements annually.

As part of our effort to monitor trends in health care, we conduct an ongoing series of surveys covering topics such as physician compensation, physician practice patterns and physician demographics. This report summarizes Merritt, Hawkins & Associates’ first survey of the inpatient and outpatient revenue generated by physicians for their affiliated hospitals. The survey is intended to provide benchmark data hospitals can use to develop a

“quantitative analysis” of their physician recruiting programs. A quantitative analysis as defined by the U.S. Internal Revenue Service (IRS) establishes the financial benefits that newly recruited physicians will bring to a hospital. These benefits may support the hospital’s mission of providing quality care to the community by creating revenue streams necessary to its continued or its enhanced operation. A quantitative analysis therefore may serve as part of a hospital’s physician recruiting compliance plan by demonstrating the financial benefits to the hospital of physician recruitment. It should be noted, however, that a compliance plan also should include a “qualitative analysis” demonstrating how newly recruited physicians will enhance quality of care in the community.

Survey data also may be used in setting physician compensation levels or recruiting

incentives through a costs/benefits analysis comparing the aggregate expense of recruiting to the average revenue generated by physicians in various specialties.


Merritt, Hawkins & Associates developed a survey that was mailed to 4,000 hospital chief financial officers (CFOs) nationally. The survey could be taken anonymously or CFOs could identify themselves and their facilities. The survey asked hospital CFOs to indicate the combined net inpatient and outpatient revenue generated for their facilities by full time

equivalent (FTE) physicians in a variety of specialties. The survey provided various revenue ranges and CFOs selected the most appropriate for each specialty.

Using the midpoint of this range, a weighted average was determined for each specialty. Volume of responses varied by specialty and the survey was self-selecting. Revenue ranges therefore cannot be expected to reflect the experiences of all hospitals.



Questionnaires were mailed to 4,000 chief financial officers at hospitals throughout the country. Over 1,200 categorical responses were generated by CFOs at 153 hospitals participating in the survey.

Hospital Type

* The majority of responses (85%) came from private, not-for-profit facilities, which represent some 75-80% of all non-government acute-care hospitals.


*The largest categorical response (47%) was from hospitals of 101 beds or less, while hospitals of 101 beds or more comprised 51% of responses.

Not-For-Profit 85% For-Profit 12% N/A 3% Less than 100 47% 101-200 19% 301 or more 18% 201-300 14% N/A 2%



* The largest categorical response (41%) came from hospitals serving populations of 50,000

or less, while 28% of responses came from hospitals serving mid-sized to large service populations of 250,000 or more.


$1,540,181 $1,272,862 $1,587,355 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000

All Specialties Primary Care Specialties

*Primary care is considered to be family practice, general internal medicine, and pediatrics

*The net revenue associated with admissions is influenced by a variety of factors for primary care and specialty physicians, including length of patient stay, ancillary services used, and the hospital’s cost structure and payor mix.

50,000 or less 41% 50,001-100,000 13% 100,001-250,000 17% 250,001-500,000 16% 500,001-1million or more 12% N/A 1%


$809,523 $892,361 $1,017,857.00 $1,030,303.00 $1,123,697 $1,138,059 $1,246,428 1,278,688 $1,643,028 $1,559,482 $1,569,000 $1,704,326 $1,810,546 $1,835,470 1,858,944 $1,879,870 $2,216,463 $2,364,864 $690,104 $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 Pediatrics Ophthalmology Otolaryngology Physical Medicine Neurology Urology Psychiatry Gastroenterology Pulmonary OB/GYN Family Practice Internal Medicine Nephrology Hematology/Oncology General Surgery Orthopedic Surgery Cardiology Vascular Surgery Neuro Surgery Cardiovascular Surgery In/Out-Patient $ REVENUE BY SPECIALTY


AVERAGE REVENUE BY BED SIZE FOR ALL SPECIALTIES $1,329,310 $1,729,597 $1,448,169 $1,775,382 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000

Less than 100 101-200 201-300 301 or More

$ by # of Beds


Specialty Revenue Avg. Starting Salary*

Cardiology $1,879,870 $267,000

Cardiovascular Surgery $3,134,615 N/A

Family Practice $1,559,482 $136,000 Gastroenterology $1,246,428 $219,000 General Surgery $1,835,470 $216,000 Hematology/Oncology $1,810,546 $219,000 Internal Medicine $1,569,000 $145,000 Nephrology $1,704,326 $205,000 Neurology $1,030,303 $174,000

Neuro Surgery $2,364,864 N/A

OB/GYN $1,649,028 $227,000

Ophthalmology $ 809,523 N/A

Orthopedic Surgery $1,858,944 $287,000

Otolaryngology $ 892,361 $212,000

Pediatrics $ 690,104 $131,000

Physical Medicine $1,017,857 N/A

Psychiatry $1,138,059 $154,000 Pulmonary $1,278,688 $175,000



This survey will be conducted periodically, allowing Merritt, Hawkins & Associates to track physician inpatient and outpatient revenue over time. Because this is the first survey of its kind that we have conducted, we are unable to identify trends relative to previously acquired data.

The average net inpatient and outpatient revenue generated by all physician categories was $1,540,181. The average annual revenue generated by primary care physicians (family practice, internal medicine, pediatrics) was $1,272,682, while average annual revenue

generated by non primary care physicians was $1,587,355. CFOs responding to the survey indicate that the majority of medical specialties (85%) generate over $1million in annual revenue for their affiliated hospitals. Only three specialties (pediatrics, ophthalmology, and otolaryngology) generate less than $1 million annually for their affiliated hospitals. Two specialties (vascular surgery and neurological surgery) generate over $2.2 million and $2.4 million respectively, while one specialty (cardiovascular surgery) generates over $3 million annually for affiliated hospitals.

Revenue figures generated by surgical specialists may reflect the high volume of procedures currently being performed at hospitals participating in the survey. These volumes may be driven by population aging or by behavioral patterns leading to severe and expensive cases, coupled with technical innovations that make more complex procedures possible. The survey indicates that physicians affiliated with hospitals of 100 beds or less generate less revenue on average than do physicians affiliated with hospitals of 101 beds or more. This may be attributed to the fact that many smaller facilities do not handle high volumes of complex procedures.

It should be noted that the majority of survey responses were received from hospitals of 200 beds or less serving areas of 250,000 people or less. A possible reason for this is the relative ease with which CFOs at smaller hospitals may be able to calculate physician revenue compared to CFOs at larger hospitals. Physicians in smaller communities tend to affiliate with one hospital, whereas physicians in larger communities often affiliate with

multiple hospitals. It therefore may be more difficult for CFOs at larger hospitals to determine revenue generated by full-time-equivalent physicians. Average revenue figures in primary care may be particularly affected by the relatively high response rate from hospitals serving communities of 250,000 or less given the broad practice scope primary care physicians often enjoy in smaller communities. In addition, revenue figures for pediatrics may have been affected by the inclusion of pediatric-sub specialists in this category.

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5001 Statesman Drive Irving, TX 75063

800-876-0500 www.merritthawkins.com





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