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Re-evaluate application fees

Credentialing Resource Center Connection, October 8, 2003

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Dear Credentialing Colleague,

Today, the majority of urban or semi-urban hospitals levy an application fee against physicians applying for membership to the medical staff. These fees range from a low of $20-$30 to a high of $400. It is unclear whether such fees reap substantial benefits. After all, 50 applications per year would bring in only $10,000--not much more than the revenue associated with a few procedures in the ambulatory surgical unit.

One wonders whether the hospital's management has carefully considered the possibility that application fees might actually dissuade physicians from applying. With projections suggesting that the nation could face a shortage of up to 150,000 specialists by 2020, it might be prudent to reassess the pros and cons of application fees.

Many colleges and universities are now reconsidering application fees and substituting them with a two-part application process. Part one is an assessment of the applicant's intent and commitment, and part two involves an evaluation of academic potential. Perhaps such a mechanism might be useful within the health care industry. Medical staff application "part one" might concentrate on the physician's intended practice plan and commitment to the hospital. "Part two" would permit an evaluation of competence and qualifications.

Here are some questions to consider:

1. What is the intended purpose of the application fee?
   
2. Is the fee a significant revenue generator?
   
3. Does the fee dissuade potential applications to the determent of the hospital?
   
4. Does the fee offset the cost of processing the application, or does it fall short or accrue to the medical staff fund?
   
5. Does the hospital charge fees simply because they always have in the past?

That's all for this week.

All the best,

Hugh Greeley

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