10th Anniversary Webinar Series: The Definitive Guide to Emergency Call Coverage

Editor's Notes

• #2: Hello and welcome to the MD Ranger webinar today! I’m excited you could join us, and I’m so jazzed to share this very special content with you today. We’re calling this webinar today the definitive guide to emergency call coverage, and it is the first in a series of webinars that we’re going to host across this spring and summer that highlight the analysis we have done on our now ten year old database of physician arrangements with hospitals. Look forward to a webinar on medical direction and physician administrative trends, as well as hospital based services, later on this year. But now, the matter at hand. Before I jump in today, I wanted to go over a few housekeeping items that are important to cover. First, my colleague Erik is on the line to help with any incoming questions or comments. If you have any, please feel free to type them into your GTW console. If erik is unable to follow up with you during the webinar, he will return your message by email or phone very soon. If you have feedback or questions to share with me, I will show my contact information at the end of the webinar so we can be in touch. I’d love to hear from you. We will send everyone a copy of the presentation by early next week, and we’ll make a video available within a week too.
• #3: We have folks on the line who are familiar with me and with MD Ranger, but we have some new people too—welcome! I wanted to do a quick introduction so that you iknow my background and where I’m coming from. Over the past nearly eight years I’ve been leading the charge to help make physician contracting more data-driven and less of a headache at MD Ranger. Prior to joining MD Ranger, I was on the leadership team of Crimson Market Advantage, a business intelligence platform that helps hospitals better understand physician relationships and referral patterns.  I’ve led over 70 educational webinars for healthcare professionals, including HCCA-sponsored webianrs, and has been published in Becker’s Hospital Review. I’m also speaking at HCCA’s compliance institute this year, so if you’re attending, please come find me and lets chat. When I’m not in the office, I enjoy spending time with my husband and two young children here in the beautiful bay area—preferably outside! I also spend time contributing to causes that I am passionate about. I serve on several board initiatives with the Marfan Foundation, and president of the Big City Parents Organization, which helps San Francisco families in need cover early education costs.
• #4: Here’s how we’re going to spend the next 25 or so minutes. I want to tell you a little more about the 10th anniversary series and what you can expect to hear today, as well as in the future. Then I’ll dive into ED call coverage analysis and key findings. Then we’ll talk about some trends, as well as a few best practices to negotitating and documenting ED call agreements at your organization. Lastly, I want to take a few minutes to share some exciting news from MD Ranger: we lmade some major changes to our product last month and can’t wait to tell you more about how the new MD Ranger can save your organization time and resources by providing benchmarks for a wide spectrum of physician arrangements—including employment and salary information not previously available.
• #5: MD Ranger was founded by a group of valuation consultants a decade ago when they saw a huge business problem that wasn’t being solved. When their hospital clients needed a valuation for ED call agreements or medical directorships, they found it impossible to get high quality data from market surveys. They also knew that many of these positions didn’t need a sophisticated cost analysis to establish FMV—what they REALLY needed was a huge database full of verified data from hospitals that could be benchmarked so that organizations could use market data themselves to set payment rates for these services. The idea caught on, and over time, our company and database grew to what it is today. Because our methodology includes collecting holistic contract data from hospitals, we have the unique opportunity for some special analysis, including trending over time. Given our growth, we have over 300 benchmarks across the services you see on this graph (read)—that number does not include all of the data slices we offer, as well as facility totals benchmarks and more. Today we will review call coverage, but don’t worry—there is more analysis to follow.
• #6: We benchmark over 50 call coverage services alone, all of which from 2019 are on this screen. You’ll see a lot of these specialties pop up during the course of the presentation.
• #7: Now that you know the bavkground, let’s dive into our key findings.
• #8: With ever shrinking margins and the pressures on hospitals and health systems, costs are a huge concern for leaders. Costs go up as reimbursement…well…does not. We see costs increasing on the physician side of the house over time. Physician payments for emergency department call coverage comprise an estimated 37% of total hospital physician contract expenditures, excluding payments for salaried physicians. In 2019, the average annual call coverage expenditure for a hospital was $3.1 million, ranging from $2.4 million. for non-urban hospitals to $23 million for trauma centers and hospitals with more than two hundred average daily census. The median expenditure across all facilities was $2.8 million. These numbers are taken from a sample of approximately 80 acute care hospitals across the US. In 2016, call coverage payments were the largest category of non-salary physician expenditures but by 2019 hospital-based services eclipsed call payments. Total hospital call coverage expenditures have not changed significantly in the last three years, though rates for specific services have risen. We’ll get into that more during the course of this presentation today.
• #9: I want to review our most important findings with you over the next two slides, and then we’ll get into the data itself. Not only have rates for ED call gone up, more services have been paid by hospitals to physicians over time. For example, a hospital may have started paying only 2-3 specialities to take ED call back in 2010, but now they pay more than 10 specialities for ED coverage. Since 2010 we’ve seen a cumulative increase of 34% for ED coverage rates, but spread over time it averages out to less than 4% of an increase year over year. Now, it really varies by speciality, as you can see with the example of the rise of psychiatry coverage vs. the fall of general peds coverage. Now, keep in mind that more than 80% of call agreements do not have rate changes annually, and most contracts in our database do not contain inflation adjustments. This is reflective of contract length ; the average contract term in our database is 2.4 years. Now,
• #10: Now for some more qualitative findings and analysis. We’ve seen big upticks in rates in a few services, and the increases really do correspond to changes and evolution in medical care—for the better of us all really. Costs rise when new Stroke or other accreditation standards take effect. Quality initiatives to improve, say, door to balloon time, cost money. Because of the patient mix that typically presents in the ED, services like behavioral health and pysciatrcy are crtiticlaly important to have. Meanwhile other market forces have impacted the increase of ED call rates. Physician shortages and docs unwilling to take call or extra call on top of what is required are the norm for many organizations. We’ve also seen a small handful of specialities really demanding and obtaining higher rates over the years. Now, the hospital-based service factor really is quite interesting. There is also a growing divide between hospital based vs. office based physicians and the prolifieration of hospital based specialities including the new guys like laborists and surgicalists has really grown. This has impacted call panels for orthopedics and OB and more given the nature of the hospitalist role.
• #11: Let’s dive into the numbers.
• #12: Payment methods for coverage services are dominated by per diem payments, however, hospitals do use a variety of payment methods as show in this slide. The vast majority of call agfreements are structured as per diem payments, with fewer than 10% including a second method of payment. Note that this is defined as a different method of payment and NOT a payment differential for weekends or holidays. The most common second pay method is per episode, followed by per activation. Now, speaking of weekends and holidays, Only 8% of MD Ranger coverage contracts include rate differentials for weekends and holidays. On average, the rate differentials impact not only the weekend/holiday rate but also the base rate paid for weekdays. For rates with that differential, The Weekday rate falls to 19% below the standard benchmark And Weekend/Holiday rate pays 148% more than that revised weekday rate On a weighted basis, the average rate paid is approximately the same as the benchmark for a single rate for all days. A best practice and key take away here is that, it is important to consider the appropriate payment rates for each type of day when negotiating a differential payment structure for call coverage.
• #13: Okay, so I think this is a really neat visual representation of changing and not changing rates. So as we’ve discussed, payment rates for call coverage have risen steadily over the past ten years. The typical ED call contract is 2.4 years in length with no inflation adjustment factors. As I mentioned, 83% of contracts in our database do not change rates year over year, but when rates do change, the average increase in ED Coverage payment rate is 20%. \increases tend to occur only when contracts are renegotiated, on average every three years. The vast majority of ED call agreements in our database, as seen here, do not have year over year changes. Furthermore, that 80/20 rule HAS HELD OVER TEN YEARS. Fascinating, right?
• #14: We haven’t always been able to report 50+ ed call services because 10 years ago, many hospials werne’t paying as many services as they do now. But, For services that MD Ranger has benchmarked in each of the last ten years we found that median per diem rates for medical specialties rose faster than surgical specialties, although rates for surgical specialists remain significantly higher than medical specialists. This graph shows not only that rate increase on the medical specialty side, but also the higher rates and more stability on the surgical side. Another thing to note is the range or difference btween the percentiles. The bell curve for medical specialities is relatively small, with the market range being tight. It’s more of a spread on surgical specialties. This could reflect how call burden and other factors impact surgical specialities more, as well as things like whether or not the facility is a trauma center.
• #15: By specialty, rates of change varied dramatically, from a small decrease in average payments for pediatrics to a 148% increase in per diem rates for psychiatry. Aggregated over ten years, the overall rate increase has been nearly 34%. The services with the largest percent increases are psychiatry, plastic surgery, urology, orthopedic surgery, OB/GYN, vascular surgery, and obstetric anesthesia. Psychiatry, in particular, had the most dramatic increase rising from a median of $121 per diem to $300.
• #16: Surgical and hospital-based specialties have experienced the greatest increases in absolute dollar payments while medical subspecialty services have experienced the highest percentage gains, This is why you see so many surgical specialities dominating this chart of the absolute median dollar change in ED call per diems over time. Now primary care specialties the lowest rates of change. This is likely due to the fact of the growing prevalence of general and pediatric hospitalist programs, We see fewer and fewer hospitals maintaining distinct primary care call panels.
• #17: I mentioned earlier some of those speciality specific rate changes that were really driven by the evolution of quality and care models. We’ve seen a huge uptick in nternventional services as regulatory and and industry standards have changed for both stroke and cardiac emergency care. Interventional neurology averaged more than 1k per diem Interventional Cardiology and STEMI panels commanded nearly 50% higher rates than non-interventional cardiology panels. Lets also consider the impact of telemedicine. It’s become an increasingly prevalent tactic for hospitals who are struggling to address all of their emergency coverage needs; however, this does not come cheap.
• #18: While I acknowledge that of course each hospital in the US is different and unique there are certain demographic characteristics of hospital facilities that really do have an impact on ED call coverage rates. With ten years and more than 18,000 call contracts in the MD Ranger database, we have analyzed the data to identify what hospital and community characteristics have a statistically significant impact on individual service payment rates. Usually hospitals who have to pay call believe that they have to pay the most call, but sometimes that isn’t true relative to other types of organiszations. The facility demographic factors with strong statistical significance include trauma status, hospital size, number of facilities covered and restricted status. Of course, physician speciality definitely plays a role in the rate. A snapshot of 2019 total facility payments for emergency call coverage and the number of paid call service positions by hospital size illustrates the strong correlation of both total payments and number of paid services with bed size. The same relationship holds for average daily census.
• #19: Trauma status has a significant impact on physician rates. Designated trauma hospital call coverage per diem rates are on average 25% higher than non- trauma hospitals. This payment differential applies both to individual services as well as the scope of services paid, hence both total payments for all coverage services and payments for individual services are higher. The difference holds across both medical and surgical specialties. Interestingly, between 2010 and 2019, call spending rose the most for medical services and non-trauma hospitals, likely reflecting the increasing prevalence and scope of paid services at non-trauma hospitals. Lesson here? Trauma centers pay more, but all you other guys are catching up.
• #20: Trauma centers pay for more coverage services than non-trauma hospitals as shown in this comparison of percent of MD Ranger subscribers paying for services based on trauma status for a selection of call services. Trauma hospitals on average pay for 21 services compared to 12 for non-trauma hospitals. Additionally, the average total paid for all coverage services is 33 percent greater at trauma hospitals.
• #21: When it comes to beds and average daily census…size matters. Our ten year analysis found that for each additional one hundred patient increase in hospital average daily census (ADC), call coverage rates increase 15%. Total payments also vary by size because of the broader scope of services that are typically paid as we discussed in the previous slide. Key takeaway? small hospitals typically pay for fewer services, and at lower rates, than larger hospitals. However, let’s be aware that given differences in the bottom line between these small and large hospitals often makes it feel like the smaller hospitals are paying just as “much”—if not more—because there are so far fewer dollars and resources.
• #22: Some geographies and population densities enable a single call panel to cover multiple emergency departments, i.e. one physician covers multiple hospitals simultaneously. For less populated regions or specialties with lower call volume such as ophthalmology or plastic surgery, this can be advantageous. Our data found an average 35% savings per campus compared with single-campus coverage arrangements is realized. This translates into the following benchmark calculation guidelines for multi-campus arrangements provided by a single physician.
• #23: let's talk about the characteristics that are not statsistically significant in influencing rates. A number factors were found not to be significant across the entire database and all services and some are counterintuitive for sure. Urban versus rural geography Now, let’s be clear, rural hospitals do spend less on physician agreements, and the correlation between size and number of services generally accounts for the large difference in total hospital physician contract expenditures for urban versus non-urban hospitals because urban hospitals are typically larger than their rural conterparts. However, where they are located doesn’t have a statistically significant impact on the individual rates themselves. Payer mix as measured by percent Medicare, Medicaid and uninsured This one is counterintuitive for most folks. But here’s how I see it, or at least an explanation for it that makes sense to me. For profit versus nonprofit ownership status also doesn’t matter. There isn’t an impact for System versus independent hospital, either, though through the years we have seen a shift here from being impactful to not being impactful. With respect to major US geographic region: MD Ranger has not identified statistically stable and significant factors related to geography. This could be the consequence of geography itself being comprised of several, possibly conflicting elements such as cost of living effects, market concentration, regional physician shortages, etc. The example I like to give is Stanley, ID—it’s the smallest town in the state with fewer than 100 people—is classified in the same geographic region as Palo Alto, CA. The two markets couldn’t be more different. As our database continues to expand, MD Ranger will mine the richness of our unique data so that we can provide new insights to physician contracting trends.   
• #24: Now I want to talk about some alternatives to the traditional ED coverage per diem. Per episode and per activation rates are most frequently paid for specialties with low ED demand, hospitals with lower overall ED volume or specialties that are called in for a procedure. Specialties most frequently paid on this basis are psychiatry, ophthalmology, urology, and GI. Per episode payments are made on a per patient basis, with average 2019 payment rates of $310 for medical subspecialties and $600 for surgical subspecialties. 6% of MD Ranger contracts included per episode payments either as the sole payment method or as a supplemental method. Per activation payments are made for a physician called into the ED, regardless of the number of patients seen. The 2019 average payment for activation rates was $920, with only 2% of MD Ranger contracts including a per activation payment method, primarily for surgical or procedural specialities. Per episode and per activation payments are often cost effective payment strategies, either as the only payment or as a secondary payment to a lower per diem rate, particularly for smaller hospitals. 
• #25: While telemedicine has existed for several decades, it is becoming more mainstream with mass market adoption and more insurance providers covering the costs of virtual visits. Hospitals are increasingly turning to telemedicine for emergency coverage as well, particularly for psychiatry and neurology services. While some telemedicine companies directly employ physicians, many contract with medical groups or networks to provide professional services University and tertiary medical centers are using telemedicine to provide specialty consultations to outlying areas while health systems are using telemedicine to connect rural and community hospitals with urban specialists. In 2019, MD Ranger published its first telemedicine benchmarks for physician per-episode payments and monthly telemedicine hospital contracts. There are two common payment methods for telemedicine services at hospitals: all-inclusive monthly fees that include both technology and professional services and monthly-plus per episode contracts that have a fixed monthly payment plus a per-episode payment when the physician is accessed. ] According to our benchmarks, the mean per-episode payment for all telemedicine services is $190 while the mean monthly payment is $12,490.  
• #26: Payment for emergency call coverage continues to be a major expense for hospitals across the country, with increases in both the number of paid services and the amount being paid Paying too much for services or paying for services without enough evidence can lead to compliance risks Market data can provide insight into how much and when to pay, whichis key negotiating contracts and documenting compliance MD Ranger has many free resources on mdranger.com that address best practices from a legal and compliance perspective.
• #27: I do want to very quickly share a very useful, five step process for negotiating and documenting FMV with benchmarks.
• #28: Thank you so much for listening—I hope you learned something helpful that you can use at your organization. Now I want to take a few minutes to talk about an exciting new development for our company.
• #29: If you’re familiar to MD Ranger you know that for the past ten years, we have been the go to resource and product based solution for benchmarking non clinical, non salaried physician services like ED coverage, medical directorship, and more. I’m so excited to share that we have moved into a new era for our company and are now offering salary and productivity benchmarks, making us the one stop shop for all your physician compensation benchmark needs. We offer 1500 benchmarks across the widest and deepest variety of physician services and specialties out there. We are used in all kinds of healthcare organizations from hospitals and medical groups to FMV consultants.
• #30: Here is an overview of the two surveys we integrate into our product. We use Gallagher, formerly known as integrated healthcare strategies, for our salary and productivity benchmarks. This survey has been around for five years and is one of the top surveys in the physician compensation market. READ HERE The other survey we use is, of course, our own. Over the past 10 years we have amassed tens of thousands of agreements from across the US that cover all different types of hospitals.
• #31: There are different ways to structuring your physician compensation policies and guidelines; MD Ranger offers healthcare organizations a unique product based approach to solving business challenges. Not only do we have more benchmarks than other surveys and products, we have larger sample sizes too. We offer instant market rate documentation reports in an easy to use format that can be used to show your organization’s adhereance to internal guidelines re: commercial reasonableness and fair market value. We offer tools and analytics for auditing agreemetns as well as organization-wide spending, all backed by expert support.
• #32: There are many ways to use MD Ranger but here are the three most common ways our product is used.
• #33: It’s easy to integrate MD Ranger into existing guidelines or policies at your organization, or use it to create a new more streamlined policy.
• #34: For those of you more progressive organizaitons who want to take things to the next level, MD Ranger can support your initiatives too.