The Millionaire Doctors Club

Note: This post has been updated with 2012 compensation data from Franciscan Alliance. The original version of this post used 2011 data from Franciscan, because the 2012 data was not available. — J.K. Wall

After I wrote last month about the profits at central Indiana hospitals, some hospital executives said those figures were overstated, in no small part because of the losses hospitals have suffered from their employed physicians.

Those losses are real—and they're spectacular.

Using data from fiscal year 2012, the same year I examined when looking at hospital profits, Indiana University Health's employed-physician practices lost $95 million, Community Physician Network's lost $103 million and the St. Vincent Medical Group's lost $104 million. The fourth major hospital system operating in Indianapolis, Franciscan Alliance, does not break out financial results for its employed physicians.

Some of these losses are due to accounting. For instance, patient visits to primary care physicians don't bring in much money in themselves, but often a primary care visit is the first step in a process that leads to highly lucrative imaging services, lab tests or even surgery. Texas-based Merritt Hawkins estimates that referrals from primary care physicians generate an average of $1.57 million in annual revenue for hospitals.

Some hospitals give their primary care physicians credit for those referrals in their accounting, and some do not.

For specialists, the average revenue generated is $1.42 million, but neurosurgeons, heart sureons and orthopedic surgeons each generate more than $2 million annually, on average, for hospitals. The most productive surgeons generate even more money for their hospitals, and are often paid accordingly.

Some of the physician losses are due to declines in productvity that typically occur when physicians go from being independent to being salaried. Some studies have estimated this producitvity drop at 25 percent.

But that said, the simplest reason hospitals are losing money on physician practices is that they're paying very handsome compensation to the doctors, particularly specialists. Physician pay went up sharply, starting in about 2008, when hospital systems started vigorously competing to employ their most valuable surgical specialists.

It seems that the highest bidder has often been Community Health Network. When you look at the numbers below, note that Community, which is the smallest of the four major hospital systems operating in Indianapolis, accounts for nine of the 13 millionaire physicians. That's startling.

1. Tahir Ali Naqvi, Community, oncology: $2,811,150
2. Deepak Guttikonda, Community, vascular surgery: $1,724,843
3. Preetham Jetty, Community, cardiology: $1,527,389
4. John Cummings, Community, neurosurgery: $1,489,776
5. Jeffrey Pierson, Franciscan, orthopedics: $1,426,424
6. RoseMarie Jones, Community, bariatric surgery: $1,410,323
7. David Hall, Community, neurosurgery: $1,365,146
8. Louis Metzman, Franciscan, orthopedics: $1,228,798
9. Jill Donaldson, Community, neurosurgery: $1,219,719
10. Krishna Malineni, Community, cardiology: $1,186,111
11. Ed Harlamert, IU Health, cardiology: $1,033,912
12. Dipen Maun, Franciscan, colorectal surgeon, $1,028,911
13. Michael Robertson, Community, cardiology: $1,005,580

In addition to that, I found three dozen physicians receiving at least $500,000 in compensation in the 2012 fiscal year. You can see them below:

1. Nadeem Ikhlaque, Franciscan, oncology : $993,953
2. Ramarao Yeleti, Community, cardiology: $968,581
3. James Lingeman, IU Health, urology: $950,903
4. Charles Hughes, Franciscan, plastic surgery: $937,639
5. Deon Vigilance, IU Health, thoracic surgery: $923,515
6. Russell Dilley, Community, vascular surgery: $918,701
7. Kenneth Stone, IU Health, cardiothoracic surgery: $887,252
8. Michael Kaveney, St. Vincent, orthopedics: $821,929
9. Sami Assar, IU Health, cardiology: $820,652
10. Joseph Hubbard, IU Health, orthopedics: $817,555
11. Blair MacPHail, IU Health, cardiology: $817,102
12. Lawrence Klein, IU Health, cardiology: $817,030
13. Michael Ball, St. Vincent, cardiology: $811,454
14. Ryan Loyd, IU Health, anesthesiology: $787,293
15. James Sumners, St. Vincent, maternal-fetal medicine: $770,034
16. Marvin Vollmer, Community, sleep medicine: $764,888
17. Hany Haddad, Community, sleep medicine: $758,980
18. Art Coffey, IU Health, thoracic surgery: $747,816
19. Jeffrey Morgan, St. Vincent, gastroenterology: $745,486
20. Nighat Tahir, Community, rheumatology: $732,061
21. Frank Covington, Community, psychiatry: $705,073
22. Waqar Aziz-Chaudry, St. Vincent, orthopedics: $703,040
23. Adil Keskin, IU Health, sleep medicine: $697,781
24. Cheng Du, IU Health, neurology: $693,217
25. Peter Seymour, IU Health, orthopedics: $676,357
26. Stephen Henson, IU Health, head and neck surgery: $654,554
27. William Didelot, St. Vincent, pediatric orthopedics: $637,356
28. Joseph Bellflower, St. Vincent, pediatric orthopedics: $636,629
29. Sabah Butty, IU Health, radiology: $614,262
30. Ronald Steele, IU Health, urology: $604,007
31. Susan Maisel, St. Vincent, pediatric gastroenterology: $597,814
32. Gianvita Salerno, IU Health, radiology: $562,866
33. Heath Spence, St. Vincent, anesthesiology: $525,336
34. Jeffrey Ramkaransingh, IU Health, radiology: $524,041
35. Brooks Davis, IU Health, radiology: $505,001
36. Mark Gorrie, IU Health, radiology: $502,270

A couple of notes about these figures. They represent total compensation—salary, bonus, benefits, perks, everything. All data come from the numerous 990 reports the four major not-for-profit hopsital systems file with the Internal Revenue Service. Those reports include compensation information for the 20 highest-paid employees of each legal entity that is part of the hospital system, a fair number of whom are physicians.

Excluded from this list are any physicians whose jobs are primarily administrative, not clinical. For example, I excluded all the chief medical officers of the hospital systems, even if some still see patients a few hours a week.

It should be noted that some of the physicians in this list are no longer with the organizations they worked for in 2012.

I'm highly interested to see if these compensation levels change when we get a peek at 2013 and 2014 data. Many physicians' contracts were set to expire in those years, and at least two hospital CEOs—IU Health's Dan Evans and Franciscan's Kevin Leahy—told me last year that some physicians' pay would have to go down. The financial struggles that hospitals went through last year almost guarantee that.

We'll have to see if the Millionaire Doctors Club expands its membership, or becomes more exclusive than ever.