A look at the changing ROI of employing doctors

Click to access MerrittHawkins_PressRelease_2019.pdf

A recent report from Merritt Hawkins provided an opportunity for us to test out a new, interactive tool for data visualization this week. The recruiter surveyed hospital Chief Financial Officers about the “return on investment” (ROI) they expect from employing physicians. The report compared average salaries paid to key specialties with the anticipated “downstream” revenue each physician is expected to produce for the hospital or health system.

To explore the data, click on the graphic below—you’ll be able to see where each specialty ranked, and (by clicking between tabs), see how the expected ROI has changed since the last time the survey was conducted in 2016. We’ve grouped the doctors into three categories: primary care; medical specialists; and proceduralists.

A few interesting highlights from exploring the data: employed physician salaries rose for every single specialty across the past three years. While specialists may bring in more revenue per doctor, primary care physicians continue to have the highest return on investment of physician salary dollars.

But take a look at the change in size of the bubbles, representing ROI, between 2016 and 2019. ROI remained pretty stable for both adult primary care and the specialists who support high-margin services like orthopedics, neurosurgery and obstetrics.

In contrast, the highest ROI growth is seen in pediatrics and psychiatry—suggesting systems are finding new ways to link these specialties to downstream services. Let us know what you think of this interactive tool, and what other kinds of analysis you think might be interesting using it. (We think it’s pretty nifty.)