Why call pay is still an issue at many healthcare organizations

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A few years ago, call pay was a hot topic in the healthcare community. Today, the issue has fallen off many people’s radar. Is this because the crisis was solved? Our observations suggest otherwise. Reimbursements in the fee-for-service model continue to decline for physicians, and call pay is still on the rise at many facilities. Furthermore, we’re beginning to see some of the long-term effects of the mismanagement of call pay. Many facilities have seen costs associated with call pay outpace the rise of operating margins. And perhaps more damaging, physician/administrator relationships are strained by the issue. 

 

There are many contributing factors to the ongoing nature of the call pay crisis. While every healthcare organization is unique, we’ve noticed a few common trends that we believe have impeded the resolution of the issue. 

 

The perception of unfairness

Many physicians feel that their call pay is inadequate given the size of their workload. This is particularly true at community hospitals where it’s not unusual for a healthcare provider to be on call 1 in 2. Between covering their own patients and taking unassigned call, these physicians are stretched thin. But community hospitals have to rely on independent practitioners to cover the ER due to their unique circumstances. For these hospitals, the alternatives are too expensive. This is in part due to the rising competition for physicians, which is now nation-wide and more expensive than ever. This environment contributes to physicians’ sense of unfairness surrounding call pay, and their demands for more money. 

 

The lack of transparency and consistency

A lack of transparency and consistency in the handling of call pay arrangements erodes trust between administrations and medical staffs. Inconsistency in how groups are compensated deepens the existing sense of unfairness among physicians. And there is often very little transparency regarding how call pay arrangements are determined. This gives the impression that the specialty groups with the most political sway end up with more than their fair share of the budget. In our experience, total transparency and the implementation of a process-driven approach that’s applied to every specialty on the call panel increases trust in a low-trust environment. 

 

The lack of impact

On call compensation rarely impacts the lives of physicians. Oftentimes, it amounts to too little or gets absorbed by practice overhead. Since there are regulations in place that govern the amount of pay a physician can receive for taking call, it might seem like nothing can be done to make this compensation more meaningful. But there are strategies hospitals can use to do just that. For example, our Physicians’ Advantage Plan allows participants to invest their call pay on a pre-tax basis. The distribution of their accounts can be linked to life events such as paying for college education or retirement. This ensures that their call compensation has a significant impact on their lives. 

 

A decade after call pay began its meteoric rise, the same issues that contributed to the crisis are still plaguing hospitals, continuing to have a negative effect on organizations’ financial wellness and the satisfaction of their doctors. Time has shown that ignoring the crisis only deepens its threat. There are creative strategies that can be used to solve the problem of call pay and turn it into an asset that distinguishes you in the marketplace. 

 

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