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10 CFO / FINANCE 10 physician specialties that generate the most revenue for hospitals By Ayla Ellison T he average amount of revenue physi- cians generate for hospitals has jumped significantly in recent years, and a decline in patient volumes and elective pro- cedures due to the COVID-19 pandemic is putting hospitals and physicians in a fragile financial position. Independent and employed physicians gener- ate an average of about $2.38 million each for their affiliated hospitals, according to survey results released by Merritt Hawkins last year. at's up significantly from $1.6 million in 2016, the last time the survey was conducted. COVID-19 has created a cash crunch for many physicians, and hospitals across the nation are facing financial damage caused by the pandemic. Hospitals are losing more than $50 billion per month, and they're esti- mated to lose $200 billion between March 1 and June 30, according to a report from the American Hospital Association. More than $161 billion of the expected reve- nue losses will come from canceled services, including nonelective surgeries and outpa- tient treatment. A recent study showed pa- tient visits for heart attack symptoms, stroke and breast cancer were down year over year in March and April. e steep decline in patient volumes has forced hundreds of hospitals and physician groups to implement cost-cutting measures, including furloughs and layoffs. e amount of revenue physicians generate for hospitals varies across specialties, but the COVID-19 pandemic is likely to push those amounts lower this year. Below are the 10 physician specialties that generated the high- est average annual net revenue for hospitals and the average salaries for those specialties, according to the Merritt Hawkins 2019 Phy- sician Inpatient/Outpatient Revenue Survey. 1. Cardiovascular surgery • Average revenue: $3.7 million • Average salary: $425,000 2. Cardiology (invasive) • Average revenue: $3.48 million • Average salary: $590,000 3. Neurosurgery • Average revenue: $3.44 million • Average salary: $687,000 4. Orthopedic surgery • Average revenue: $3.29 million • Average salary: $533,000 5. Gastroenterology • Average revenue: $2.97 million • Average salary: $487,000 6. Hematology/oncology • Average revenue: $2.86 million • Average salary: $425,000 7. General surgery • Average revenue: $2.71 million • Average salary: $350,000 8. Internal medicine • Average revenue: $2.68 million • Average salary: $261,000 9. Pulmonology • Average revenue: $2.36 million • Average salary: $418,000 10. Cardiology (noninvasive) • Average revenue: $2.31 million • Average salary: $427,000 n Kaiser sees $1.1B loss in first quarter By Alia Paavola C iting hefty investment losses, Oakland, Calif.-based Kaiser Permanente saw its net loss reach $1.1 billion in the first quarter of 2020, according to its financial results. In the same period one year earlier, Kaiser reported net income of $3.2 billion. The health system reported operating revenue of $22.6 billion in the first quarter of this year, compared to $21.3 billion one year prior. The health system also saw its expenses rise to $21.4 billion, an increase of $1.6 billion from the first quar- ter of 2019. The system's operating income reached $1.3 billion, compared to $1.5 billion in the first quarter of 2019. The health system said its first-quarter loss was primari- ly driven by an investment loss of $2.4 billion in the first quarter of 2020. The investment loss in the first quarter of this year com- pares to a $1.6 billion investment gain in the first quarter of 2019. Kaiser said its first-quarter results also reflect costs to pre- pare for the COVID-19 pandemic, but noted that only a "small portion" of the financial effect of COVID-19 was felt this quarter. "During the first quarter we began establishing mobile hospitals and triage units, recommissioning retired units, increasing our available inpatient capacity, and acquiring additional equipment to prepare for the potential surge of COVID-19 patients," said Kathy Lancaster, Kaiser's execu- tive vice president and CFO. "Even with all this rapidly es- calating preparation and direct care delivery, only a small portion of the financial effects of the pandemic, in terms of lost revenue and increased costs, was experienced in the first quarter." n