Jordan Ellis
Making money in a hospital setting is a complex topic with many variables, from the type of patient care to the number of procedures performed. Hospitals make money in unusual ways compared to other businesses, relying on intricate algorithms and formulas based on insurance companies' reimbursement schemes. Physicians and medical students can increase their income through various avenues, such as taking on outside work, investing wisely, maximising reimbursements, and focusing on efficient patient flow. This topic is multifaceted, and different strategies apply depending on one's role in the hospital ecosystem.
| Characteristics | Values |
|---|---|
| Work as an independent medical examiner | Expert witness, independent medical examiner, freelance healthcare writer, EMT, phlebotomist |
| Work outside of the hospital | Moonlighting in a neighbouring state, working in a nursing home or hospice, writing a blog |
| Take on a different job | Take on outside work, work as a tutor, work as a consultant |
| Work during holidays | Holiday rate of $2000 a day, weekday rate of $1800, working a Thanksgiving weekend pays $8000 for roughly 24 hours of work |
| Keep patients moving | Shorter stays are better than longer ones, patients who overstay require documentation, hospitals lose money on patients with no place to go after their care is completed |
| Focus on profitable departments | Cardio or general surgery, pharmacy, gift shop |
| Manage staff | Cured patients bring money, staff take money, hire a surplus of nurses, remove unnecessary staff |
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What You'll Learn
- Hospitals make more money when patients undergo more tests, procedures, and operations
- Hospitals lose money when patients overstay their targeted length of stay
- Physicians can take on outside work such as expert witnesses or independent medical examiners
- Physicians can take on part-time jobs outside their practice to earn extra income
- Medical students can work as EMTs, phlebotomists, or tutors to make money during school
Hospitals make more money when patients undergo more tests, procedures, and operations
Hospitals have been described as having "unusual and arcane" methods of making money, which can be confusing to understand. There are various factors that influence how hospitals make money and how profitable they are. One of the main ways hospitals make money is through patient insurance plans. Hospitals and physicians will make more money from patients with better insurance plans. Hospitals also benefit from physicians who admit better-insured patients.
Additionally, hospitals make more money when patients undergo more tests, procedures, and operations. Surgical patients are more profitable than medical patients as the procedures are reimbursed at a higher rate. The more surgical patients a hospital has, the more money it makes. Hospitals also generate revenue through technical and professional fees associated with tests and procedures. The hospital usually receives the technical fee, while the physician overseeing the test gets the professional fee.
The involvement of multiple players with different agendas, such as governments, employers, insurance companies, and individuals, contributes to the complexity of hospital finances. Hospitals also have to navigate constantly changing reimbursement regulations and insurance company guidelines. Some hospitals have been criticized for profiting while their patients struggle with medical debt. However, it is important to note that many hospitals are nonprofit institutions that provide free or discounted care and are required to offer charity care to maintain their tax-exempt status.
The COVID-19 pandemic significantly impacted how hospitals made money. For example, the Mayo Clinic, a top-ranked hospital, lost millions of dollars a day when it stopped non-emergency medical care to focus on coronavirus patients, postponing lucrative surgeries. The pandemic highlighted the financial challenges hospitals face when they have to suddenly shift their focus away from profitable elective procedures to accommodating a high volume of emergency patients.
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Hospitals lose money when patients overstay their targeted length of stay
Hospitals make money in unusual ways compared to most other businesses. The money they make is based on complicated algorithms and formulas that depend on the insurance company paying the bill. The more things that happen to the patient (tests, procedures, and operations), the more money the hospital makes.
However, hospitals lose money when patients overstay their targeted length of stay. This is because hospitals are incentivized to keep patient stays short through payment schemes that reward shorter stays within specific diagnoses. Hospitals may even be penalized for lengths of stay that exceed the guideline for a particular diagnosis. Patients who overstay their targeted length of stay require documentation from the attending physician explaining the reason for the extended stay. These patients may also be preventing the hospital from receiving another, better-paying patient.
Additionally, hospitals lose money when they have patients who do not have a place to go after their care is completed, often the underinsured and indigent. These patients may linger in the hospital, costing the hospital money as their ongoing care needs do not justify their stay.
Furthermore, hospitals have been losing money due to a variety of other factors. During the COVID-19 pandemic, hospitals struggled with acquiring personal protective equipment and experienced a decrease in lucrative elective procedures. Hospitals also spend a significant amount on medical equipment lifecycle costs, and they may be losing money due to a lack of internal resources and specialized expertise. The employment of prestigious physicians who perform complex procedures can also be a financial burden.
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Physicians can take on outside work such as expert witnesses or independent medical examiners
Physicians can take on outside work as expert witnesses or independent medical examiners, which can be a lucrative way to boost their income. Expert witnesses are among the most important participants in malpractice litigation, and their role is to determine whether a standard of care has been met and, in cases where a breach occurs, to quantify the consequences. They are ethically and legally obligated to tell the truth and must provide truthful testimony to avoid criminal prosecution for perjury and civil suits for negligence.
To become an expert witness, physicians typically need to be board-certified and have an active medical license. They should also be familiar with the accepted standard of care and have been actively involved in the clinical practice of the specialty of the case. Expert witnesses may be called upon to review all relevant medical information and depositions in a case and testify to its content fairly, honestly, and in a balanced manner. They should also be prepared to distinguish between negligence and an unfortunate outcome in the context of appropriate care.
Physicians can find work as expert witnesses in a variety of cases, including medical malpractice, workers' compensation, and personal injury. They can also provide testimony in non-medical malpractice niches such as life expectancy, life care planning, product liability, and patent cases. Attorneys often look for expert witnesses in directories, such as the SEAK National Expert Witness Directory.
In addition to the financial benefits, some physicians find that expert witness work is professionally rewarding, as it requires them to stay up-to-date with the latest literature and advancements in their field. It also allows them to apply their medical knowledge and experience in a legal context, which can be a challenging and stimulating experience.
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Physicians can take on part-time jobs outside their practice to earn extra income
Another option is to take on administrative work in addition to their clinical schedule, which can boost income. Physician leaders may be compensated more than some clinicians, and utilizing their clinical knowledge in a different capacity can be lucrative. This can include consulting, disability evaluations, expert testimony, and more. Physicians can also monetize hobbies or side hustles, such as blogging or handyman services.
For those looking to stay within the medical field, there are several options for part-time work. These include case reviews and utilization reviews, which can be done remotely and involve reviewing medical charts and assessing the appropriateness of medical treatments, respectively. Coaching medical students or residents is another option, which can involve reviewing personal statements, conducting mock interviews, or providing career advice. Physicians can also consider switching specialties or pursuing a second residency to increase their income. For example, moving from family practice to radiology or joining the military for a second residency.
It is important for physicians to review their primary employer's policy on outside work and examine their liability insurance before taking on any part-time jobs. Additionally, investing time in developing business skills and networking can pay off in the long run, helping physicians get better-paying jobs or start their own practices.
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Medical students can work as EMTs, phlebotomists, or tutors to make money during school
As a medical student, you can take up side hustles to bring in some extra cash. Here are three options to consider:
- Working as an EMT: Being an EMT can provide valuable experience that will be useful in medical school and beyond. You will learn physical diagnostic skills, initial patient management, and how to remain calm in challenging situations. Additionally, you will gain experience in life-saving techniques for medical and trauma emergencies, such as CPR, physical assessments, and administering medications. The EMT license can open doors to various opportunities, including volunteering in emergency departments and gaining insight into what first responders do before patients arrive at the hospital. The flexibility of the role makes it a great option for balancing work and studies.
- Becoming a Phlebotomist: Phlebotomy offers excellent exposure to a diverse range of patients in a hospital setting. It helps develop good manual skills and provides a basic understanding of lab values. While some hospitals may have nurses or PCAs drawing blood, phlebotomist experience is highly valuable in doctor office settings and can even be useful in emergency departments. Most states don't require a license for phlebotomy, and training is often provided on the job.
- Tutoring: As a medical student, you possess valuable knowledge that others are willing to pay for. There is a high demand for tutors, and you can charge $100 or more per hour for your services. You can tutor college students preparing for the MCATs or offer support to your fellow medical school classmates. Working as a tutor allows you to set your own schedule and work around your classes and rotations. You can find tutoring opportunities through education companies or by advertising your services locally.
These three options can provide not only a financial boost but also valuable experience and skills that will enhance your medical education and career.
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Frequently asked questions
There are several ways to make money as a medical student. You could take up tutoring, work as an EMT, or find work as a phlebotomist.
Doctors can take on part-time jobs outside of their practice, such as working as an expert witness or independent medical examiner. Doctors can also take on outside work in nursing homes, hospices, or writing blogs for online physician communities.
Hospitals make money based on complicated algorithms and various formulas applied based on the insurance company paying the bill. The more tests, procedures, and operations that happen to a patient, the more money the hospital makes. Shorter patient stays are also better for the hospital's bottom line.
Doctors can make more money by investing in themselves, such as by attending conferences to improve their skills and network with other professionals. Doctors can also increase their income by taking on higher-paying work or moonlighting in neighbouring states.
