Renumeration of Physicians Rendering Services to the Hospital
Reynaldo O. Joson, MD, MHA, MHPEd, MS Surg
There are many schemes in renumerating physicians rendering services to the hospital. The schemes vary from historical/traditional to rationalized basis. The schemes vary from one sector or unit of the hospital to another. Lastly, the schemes vary from one physician or one group of physicians to another. Whatever be the scheme present in a hospital, it may end up in various unfortunate combinations, happy in one party and unhappy in another, advantageous in one party and disadvantageous, in another, or it may also end up in a fortunate ideal situation, where the physicians and the hospital administration are mutually satisfied with the arrangement and are working harmoniously to reach a common goal.
Needless to say, the best scheme will be one in which the physicians and hospital administration found mutually satisfactory. The questions - what is this best scheme and how is this arrived at?
Intensive search of the Internet yielded no answers to the
above questions. I just have to utilize
some basic management principles to answer the questions and I came out with
this general answer: the best scheme
will be one that is rationalized (with basis), standardized, and equitable.
I will expound on this answer by using a specific hospital (XXX Hospital) as a case study.
In XXX Hospital, there are hundreds of physicians contributing to its financial stability.
What are the different kinds of physicians with respect to hospital’s renumerating their services?
The physicians can be divided into the following based on several categories:
The following tables show the relative distribution of the different kinds of physicians:
Table 1: Relative distribution of physician-managers, hospital-employed physicians, and those receiving honoraria as to whether they are practicing medicine or not.
|
Practicing |
Nonpracticing |
Physician-managers |
+++ |
+ (rm, ba) |
Hospital-employed |
++ |
+ (rm, ba) |
With honoraria |
+++ |
- |
Table 2: Relative distribution of physician-managers whether they are hospital-employed or with honoraria.
|
Hospital-employed |
With honoraria |
Physician-managers |
+ |
+++ |
Not all the physicians in the hospital are entitled to renumeration.
Only those who rendered services for the hospital on an explicit request by or contract with the hospital administration are entitled to renumerations.
Physicians using the facilities of the hospital to practice medicine or their profession are not entitled to renumerations from the hospital unless they are explicitly employed or contracted by the hospital. Examples, internists, surgeons, pediatricians, obstetrician-gynecologists, radiologists, laboratory medicine specialists, pathologists, physiatrists and other specialists are not entitled to renumeration from the hospital when they practice their specialty unless they are explicitly employed and contracted by the hospital. They are given the privilege to practice their specialty given the facilities established by the hospital.
Physicians appointed, employed or contracted by the hospital to be managers of the hospital or a unit within the hospital should be renumerated either with salary or honorarium for services rendered.
In XXX Hospital, at present, there is no written policy on
physicians’ renumeration. The scheme
has been on a per need basis and perpetuation of a traditional practice whose
rationale is not clear. There is no
standardized hospital-wide scheme. It
is fraught with complaints of inequity and feeling of dissatisfaction from both
physicians and the hospital administration.
There is, therefore, a need to
come out with explicit policies on renumeration of physicians which should be
rational, standardized, and equitable.
To formulate policies on renumeration of physicians that will promote optimal hospital performance.
To formulate policies on renumeration of physicians that should be rational, standardized, and equitable.
Rational policies – means policies that are systematically arrived at and with sound basis.
Standardized policies – means policies that can be used across all units in the hospital.
Equitable policies – means policies that will as much as possible promote a scheme that is mutually acceptable by both physicians and the hospital administration in terms of reasonable compensation and operational expenses.
Rational, standardized, and equitable policies on renumeration of physicians that will promote optimal hospital performance in terms of quality service and financial stability.
The statements on which physicians should be renumerated.
Only those who rendered services for the hospital on an explicit request by or contract with the hospital administration are entitled to renumerations.
Physicians appointed, employed or contracted by the hospital to be managers of the hospital or a unit within the hospital should be renumerated either with salary or honorarium for services rendered.
Units where physicians are involved and where renumeration is an issue.
Category of unit |
Samples of units and positions |
Administration |
Medical Directors Assistant Medical Directors |
Clinical departments without a specific cost-unit |
Anesthesia, Surgery, Medicine, Family Med, Pedia, OB-GYN, ENT, Ophtha, Dental, Ortho |
Clinical departments with a specific cost-unit |
ER, IMSD, Rehab Med |
Ancillary service departments with a specific cost-unit |
Radiology, Nuclear Med, Laboratory and Patho, Heart station, Pulmonary Lab |
Committees |
Committee on Medical Services, Committee on Medical Education and Training, Committee on Research, Committee on Credentials and Membership, ORCOM, Infection Control Committee, Ethics Committee, Blood Transfusion Committee, Medical Records Committee, Quality Council |
Types of services that are usually rendered by physicians in the different units.
Category of unit |
Samples of units and positions |
Type of services |
Administration |
Medical Directors Assistant Medical Directors |
Managerial (may be private clinicians at the same time) |
Clinical departments without a specific cost-unit |
Anesthesia, Surgery, Medicine, Family Med, Pedia, OB-GYN, ENT, Ophtha, Dental, Ortho |
Managerial for the officers (may be private clinicians at the same time) Private clinicians for the members |
Clinical departments with a specific cost-unit |
ER, IMSD, Rehab Med |
Managerial for the heads (may be private clinicians at the same time) Private clinicians for the members May be employed clinicians (ER, IMSD) |
Ancillary service departments with a specific cost-unit |
Radiology, Nuclear Med, Laboratory and Patho, Heart station, Pulmonary Lab |
Managerial for the heads (may be private clinicians at the same time) Private clinicians for the members May be employed clinicians |
Committees |
Committee on Medical Services, Committee on Medical Education and Training, Committee on Research, Committee on Credentials and Membership, ORCOM, Infection Control Committee, Ethics Committee, Blood Transfusion Committee, Medical Records Committee, Quality Council |
Managerial for the heads and members (may be private clinicians at the same time) |
Thus, physicians appointed by the hospital to the administration unit, clinical departments without a specific cost-unit, clinical departments with a specific cost-unit, ancillary service departments, and committees may have the following activities, singly or in combination:
1. Managerial functions
2. Private practice of their specialty
3. Employed practice of profession or specialty
The hospital should compensate for the managerial functions and employed practice of profession of the appointed physicians and NOT for the private practice.
Thus,
1.
The medical director and assistant medical directors should be
compensated for their managerial functions.
If they are allowed to do private practice in the hospital, there should
be no compensation for this privilege.
2.
The officers of the clinical departments without a cost-unit should be
compensated for their managerial functions.
. If they are allowed to do
private practice in the hospital, there should be no compensation for this
privilege.
3.
Clinical departments with a cost-unit (ER, IMSD, Rehab Med)
3.1
The officers of the clinical departments with a cost-unit should be
compensated for their managerial functions.
. If they are allowed to do
private practice in the hospital, there should be no compensation for this
privilege.
3.2
The other physician-staff of the clinical departments with a cost-unit
should be given renumeration if they are explicitly requested or contracted by
the hospital administration to render services. If they are allowed to do
private practice in the hospital, there should be no compensation for this
privilege.
4.
Ancillary service departments with a cost-unit (Lab, Radiology, Nuclear
Med, Pulmo Lab)
4.1
The officers of the ancillary service departments with a cost-unit should
be compensated for their managerial functions.
. If they are allowed to do
private practice in the hospital, there should be no compensation for this
privilege.
4.2
The other physician-staff of the ancillary service departments with a
cost-unit should be given renumeration if they are explicitly requested or
contracted by the hospital administration to render services. If they are
allowed to do private practice in the hospital, there should be no compensation
for this privilege.
4.3
The cost of an ancillary procedure should incorporate an agreed upon professional fee of the physician rendering
the service. For example, the cost of
an ECG should incorporate the cardiologist’s or reader’s fee for proper
renumeration. The cost of a chest-xray
should incorporate the radiologist’s or interpreter’s fee for proper
renumeration.
5.
The heads and members appointed to committees should be compensated for
their managerial functions and their tasks.
If they are allowed to do private practice in the hospital, there should
be no compensation for this privilege.
Hospital
administration has to make decisions on the following issues related to
compensation:
1.
Part-time or full-time managerial functions
2.
Part-time or full-time employment of physicians
3.
Terms of reference or job description for the physicians asked to render
services for the hospital
4.
Number of staff needed for optimal hospital or unit performance
5.
Selection on physician-manager and staff
a.
Competency
b.
Commitment to hospital
c.
As much as possible no other hospital or clinic affiliations
6.
Amount of compensation (to be negotiated with the selected
physician-manager and staff)
7.
Incentive schemes (may be considered)
Output
The scheme, if validated and hopefully, will be one that is rational, standardized, and equitable that will promote optimal hospital performance in terms of quality service and financial stability.