Experiential Exercise: Chapter 11



Experiential Exercise: Chapter 11

Leslie Burgy

Siena Heights University

Human Resource Management

Dr. John Fick

February 23, 2014

Experiential Exercise: Chapter 11

Mapleton Family Medicine is a physician group practice comprised of eight physicians who practice family medicine, internal medicine and pediatrics. The practice is owned by two of the physicians and those two physicians are proposing to revise the current physician compensation package to an incentive based program that is focused on both productivity and quality indicators. The owners are proposing that “each physician will have a base salary equivalent to 75 % of their current salary and have the opportunity to earn up to 125 % of their base salary if they meet defined volume and quality goals”(Fried & Fottler, 2008, p. 315).

As with any new change to policies and in particular with compensation policies, the two owners will need to meet with the remaining six physicians and clearly define the new compensation package. The owners need to be specific with why they are instituting the changes and share with the other physicians that they are “concerned with productivity and quality in the practice”(Fried & Fottler, 2008, p. 315). The owners need to define both the productivity and the quality measures. They need to be clear that the productivity goal will be an increase in the amount of patients that they are seeing on a daily basis. Currently the physicians’ average 25 patient visits per day and the goal will be to increase to 30 patient visits per day with a stretch goal of 35 patient visits per day. The productivity goal cannot compromise patient satisfaction therefore; three quality indicators will be measured and obtained. The quality indicators that will be measured will be patient satisfaction surveys, child-immunizations and patient waiting times.

The owners propose to set quality goals biannually for each physician and the expectation is that each physician that achieves the proposed goals will earn their full salary and will receive a bonus for quality measures above their goals.

The proposed compensation package is a trend throughout the United States, “the days of physicians receiving a straight salary are coming to an end” (Stagg Elliott, 2010, p. 1). However, there is still a large variation in physician compensation packages. According to Stagg Elliott (2010), most compensation packages will use “financial and productivity benchmarks developed by organizations such as organizations such as the Medical Group Management Association (MGMA) or the American Medical Group Association., or use combinations of available data” (para 6).

Another common compensation formula is “based on relative value units (RVU) derived from the resource- based value scale used by Medicare and other insurers” (Stagg Elliott, 2010, para. 14). “This can take the form of either total RVUs, which account for all that physicians actually do, or work RVUs which take into consideration only patient-physician encounters” (Stagg Elliott, 2010, p. 14). As of 2010, “MGMA reported that 35 % of group practices were using RVU compensation/productivity formulas and 61% of physicians were compensated based upon RVU production” (Satiani, 2012, para. 1). According to Satiani (2012), “ a problem with tying physician compensation strictly on a per RVU or WRVU production is that when insurer payments change or groups have a bad year with a negative operating margin, the model may not be sustainable” (para. 4). According to Satiani (2012) both RVU and achieving benchmarks for chronic diseases, patient satisfaction, care coordination, and other important functions must be in the mix” (para 5). “This is becoming even more important with the medical home concept” (Satiani, 2012, para. 5).

Whatever the formula that will be used to determine the productivity for the physicians they must understand and agree to it. “The formulas tend to be complicated but the managing physicians should be able to provide examples of how the different levels of productivity will affect the compensation level” (Stagg Elliott, 2010, para. 15). The physicians may not be happy with the proposed compensation changes and some may actually choose to leave the practice. Not every physician will meet their targets and there will be some physicians that exceed their targets. However, failure to meet their targets will effect their compensation.

Sometimes, however, lower productivity may be an acceptable choice for all parties. According to Stagg Elliott (2010), “those who manage physician practices say some doctors choose to be less productive to have a better work-life balance” (para 22). In addition, hospitals and medical practices often glean other benefits from keeping a physician on, even if he or she is not highly productive. These may include maintaining a referral base or having more cover for call or time off. (Stagg Elliott, 2010, para. 22).

The physicians at Mapleton Family Medicine will most likely react with trepidation and apprehension when they are first introduced to the new compensation program. “Any compensation plan must align physician performance with the organization’s strategic business goals, mission and vision” (Navigant, 2014, para. 3). According to Navigant (2014), “achieving this alignment is likely to become more challenging as the market continues to move toward reimbursements based on demonstrated value (e.g., clinical outcomes, service, etc.) and efficiency rather than just productivity”(para 3).

The implementation of the new compensation package will not be successful unless the physicians support it. Hopefully the physicians of Mapleton Family Medicine will support the change if they are given, the specific reasons behind the change, a monthly dashboard so that they can follow their performance in regards to productivity and quality indicators and an opportunity to revisit the goals set for them in a timely manner to ensure that the goals are adequately measured and obtainable.

References

Fried, B. J., & Fottler, M. D. (2008). Human Resources in Healthcare, Managing for success (3rd ed.). Chicago, IL: Health Administration Press.

Navigant. (2014).

Satiani, B. (2012). Physician productivity measures should include more than RVUs. Retrieved from should-include-more-than-just-rvus/

Stagg Elliott, V. (2010). Negotiating your productivity target: The new payment structures. Retrieved from

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