Beyond the Benchmarks – Call Coverage and the Road Ahead

Quantifying the true value of call coverage demands careful and comprehensive analysis.  Published benchmarks and surveys provide limited insight into the national market, but hospitals must plan for the future as they address the coverage demands of today.

What does the future of call coverage arrangements look like, and how can hospitals prepare themselves for the changes ahead?

With an increasing number of call coverage arrangements being implemented nationwide – and no indication this trend will change anytime soon – we believe our clients will continue relying on stipend agreements to maintain adequate medical staff coverage.  But ensuring these arrangements will withstand regulatory scrutiny and make financial sense for a hospital remains a challenge.  Take national surveys, for example.  They’re slowly catching up to this market shift, but they remain limited in their ability to take into account a host of relevant considerations affecting the appropriate level of payment.  And with the high degree of variability inherent in these types of arrangements, it is unlikely that any survey will ever fully capture the many factors that influence the true value of coverage services.  Indeed, sole reliance on benchmarks in establishing a payment level may cause hospitals to either undervalue or overvalue coverage services.

Independent, third-party fair market value (FMV) opinions that rely on client-specific data will remain a fixture among prudent hospital leaders who wish to both shield themselves from legal concerns and ensure the execution of a fair and reasonable professional arrangement.

Rather than viewing FMV analyses as little more than a box to be checked in physician compensation dealings, healthcare administrators are encouraged to view these reports as a component of their overall business and to benefit from the insights that an appropriately rigorous FMV analysis can provide.

To learn more, read the Diagnostic available on our Web site.

This entry was posted in Call Coverage, Fair Market Value, Legislative & Regulatory Issues, Physician Compensation and tagged , , , , , , by Adam Klein. Bookmark the permalink.

About Adam Klein

Adam is the head of ECG’s Valuation Services practice. Since 1997, he has conducted valuations and appraisals of business enterprises, physician and executive compensation arrangements, accountable care funds flow arrangements, and capital and intangible assets, as well as conducted economic damages assessments, for taxable and tax-exempt entities. His valuation studies are presented in a manner that allows parties to clearly understand how and why conclusions were reached so that they are best able to achieve fair and defensible agreements. He has conducted industry-leading research on drivers of physician compensation and speaks regularly on a variety of healthcare valuation topics. Adam is a Certified Valuation Analyst (CVA) with the National Association of Certified Valuators and Analysts, a member of the American Society of Appraisers, and qualified by the Institute of Business Appraisers to perform business appraisal reviews. He received a master of business administration degree from the UCLA Anderson School of Management and a bachelor of arts degree in econometrics from the University of Massachusetts Amherst.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s