August 28, 2019

“These are the top ten physician specialties that generate the most revenue for hospitals.”

During the height of his hosting career, comedian David Letterman made famous the highly popular “Top Ten” segment of his late-night shows.  Moving from ten to one, the audience would giggle after hearing each item in the list while simultaneously anticipating the last—the number one—item.  “Top ten famous last words . . . number five: ‘You’re in my parking space, Mr. Capone.’”  Number one, incidentally, involved a request for two scoops of Blue Bell ice cream.

From Punchline to Bottomline

While we cannot help but chuckle at some of the top ten lists that occasionally come to our attention, others are no laughing matter—especially when they involve a large institution’s financial well-being.  Take, for example, a survey conducted by physician staffing firm Merritt Hawkins.  Their 2019 examination of nearly 100 hospitals yielded a pattern pointing to specific physician specialties that are most valuable to the average American hospital.

Now that’s a list to take seriously, with the gravity and solemnity of a spectacled accountant laboring under a green-shade lamp.  Merritt Hawkins has performed similar surveys for 16 years, and so this 2019 effort—gathered from late 2018 data—contains a certain weight that comes from experience.  According to their analysis, physicians typically generate far more revenue to their hospitals than they earn in the way of salaries.  So, if you are a hospital CFO who is looking to more profitably staff your facility, you are going to want to know which physicians will best benefit the bottom line.

Cue the Drum Roll

Without further buildup, and moving in opposite order of Letterman’s lists, provided below are the top ten physician specialties that generate the most revenue for hospitals.  The list includes the average physician salary for each specialty.

While not containing the pith or punch of a late-night list, the above rankings should at least bring a smile to the face of your financial strategists.  Hospital CFOs will want to carefully compare this list with what they find in their own facility.  If these numbers appear plausible, do they, in fact, reflect the reality in your own hospital?  Might this listing prompt a reconsideration of your current staffing model, OR utilization priorities, and plans for that proposed new wing?

Meticulous Math Leads to Medical Mirth

Studies have confirmed that “a merry heart works like a medicine.”  Want to keep your facility’s board of directors in good humor?  Bring to their attention the growing benefits of directly employing providers who practice within one or more of the specialties listed above.  According to the 2019 Merritt Hawkins survey, the average hospital’s revenue that is derived from employed physicians increased by 52 percent from 2016 to 2018.

To drill down a bit deeper, the survey found that four categories of hospital-employed specialists—invasive cardiologists, neurosurgeons, orthopedic surgeons and cardiovascular surgeons—produced more than $3 million, each, in net revenue for the average hospital and/or their affiliated organizations in 2018.  For facilities that are able to make sense of the numbers and hammer out mutually beneficial employment agreements, direct employment of these specialists may translate into handsomer profits and healthier boardrooms.

Ending on a Serious Note

Surveys such as the one provided above are not only interesting from a benchmarking perspective, they can prove pivotal in redirecting the hospital’s focus relative to the efficient allocation of resources.  Our hope is that these articles will serve to assist you in better planning, leading to better financial and clinical outcomes—and that, my friends, is no joke.