CFO Council. Physician Compensation Trends. Survey Challenges
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- Cameron Mildred McKinney
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1 CFO Council Physician Compensation Trends 1 Survey Challenges Many healthcare organizations use surveys in their compensation plans. Some to set specific targets and benchmarks and others to determine the compensation conversion factors i.e. compensation/wrvu ratio. To use the surveys effectively one must understand: The limitation of the various surveys, The market place from which data is collected, and How to balance local, regional and national market data. 2 1
2 Market Trends and Directions 28 th Annual AMGA Provider Compensation Survey Data on clinical compensation, work RVU, net collections, gross productivity, comp to productivity ratios, visits, benefits 134 Physician Specialties, 27 Other Provider Specialties NP and PA breakdowns Survey Group Responses Providers Average size Percent Single Specialty AMGA , % 3 AMGA Survey Participants 4 2
3 Total Compensation Median Physician Compensation Percent Percent Percent Dollar Change Specialty Change Change Change Medical Specialties Allergy/Immunology 281, , % 270, , % 4.84% 12,984 Cardiology 452, , % 420, , % 5.16% 22,185 Cardiology - Cath Lab 588, , % 547, , % 12.23% 64,179 Dermatology 453, , % 411, , % 14.23% 56,539 Endocrinology 241, , % 234, , % 9.27% 20,526 Family Medicine 225, , % 223, , % 2.98% 6,537 Gastroenterology 506, , % 432, , % 16.29% 70,902 Hematology and Medical Oncology 407, , % 350, , % 16.90% 58,843 Hospitalist - Internal Medicine 263, , % 241, , % 11.42% 27,000 Hypertension and Nephrology 309, , % 277, , % 11.18% 31,066 Infectious Disease 247, , % 242, , % 7.78% 17,851 Internal Medicine 239, , % 226, , % 6.93% 15,551 Neurology 280, , % 255, , % 12.39% 30,876 Pediatrics & Adolescent - General 233, , % 222, , % 5.88% 12,966 Psychiatry 246, , % 224, , % 13.49% 29,306 Pulmonary Disease (without Critical Care) 335, , % 300, , % 10.18% 31,027 Rheumatologic Disease 247, , % 240, , % 7.88% 18,061 Urgent Care 251, , % 239, , % 3.94% 9,535 Surgical Specialties Cardiac / Thoracic Surgery 596, , % 525, , % 9.66% 52,550 Emergency Medicine 324, , % 301, , % 8.91% 26,515 General Surgery 390, , % 373, , % 5.53% 20,457 OB/GYN - General 321, , % 312, , % 6.06% 18,397 Ophthalmology 401, , % 372, , % 8.05% 29,939 Orthopedic Surgery 572, , % 525, , % 11.06% 57,031 Otolaryngology 419, , % 383, , % 12.05% 45,113 Urology 433, , % 424, , % 4.26% 17,710 Radiology/Anesthesia/Pathology Anesthesiology 416, , % 394, , % 10.26% 38,719 Radiology - Non-Interventional 483, , % 453, , % 5.33% 24,474 Weighted Average (by phy count) 2.61% 5.96% 7.68% 23,785 5 Primary Care by Region 6 3
4 Work RVUs Median Work RVUs Specialty Percent 2014 Change Percent Percent Unit Change Change Change Medical Specialties Allergy/Immunology 4,020 3, % 4,033 3, % 4.29% 165 Cardiology 7,414 7, % 7,150 6, % 6.92% 480 Cardiology - Cath Lab 9,541 8, % 8,491 8, % 14.97% 1,242 Dermatology 7,570 7, % 7,389 7, % 3.96% 288 Endocrinology 4,737 4, % 4,463 4, % 7.85% 345 Family Medicine 4,863 4, % 5,010 4, % -0.54% -26 Gastroenterology 8,427 8, % 7,947 7, % 5.45% 436 Hematology and Medical Oncology 4,679 4, % 4,630 4, % 6.51% 286 Hospitalist - Internal Medicine 4,273 4, % 4,013 4, % 6.26% 252 Hypertension and Nephrology 6,643 6, % 6,418 6, % 7.86% 484 Infectious Disease 4,579 4, % 4,742 4, % 6.51% 280 Internal Medicine 4,873 4, % 4,723 4, % 3.31% 156 Neurology 4,820 4, % 4,790 4, % 2.19% 103 Pediatrics & Adolescent - General 5,411 5, % 5,425 5, % 5.86% 299 Psychiatry 4,109 4, % 3,737 3, % 21.54% 728 Pulmonary Disease (without Critical Care) 5,611 6, % 6,129 6, % -7.36% -446 Rheumatologic Disease 4,800 4, % 4,557 4, % 2.97% 139 Urgent Care 4,905 5, % 5,271 5, % -5.97% -312 Surgical Specialties Cardiac / Thoracic Surgery 9,595 9, % 9,229 9, % 1.00% 95 Emergency Medicine 7,009 7, % 7,216 7, % -0.90% -64 General Surgery 6,857 6, % 6,942 7, % -2.41% -170 OB/GYN - General 7,032 6, % 6,706 6, % 8.59% 556 Ophthalmology 8,636 8, % 8,813 8, % -0.15% -13 Orthopedic Surgery 7,792 8, % 7,886 8, % -2.91% -233 Otolaryngology 6,955 6, % 6,828 6, % 0.93% 64 Urology 7,536 7, % 7,317 7, % 1.07% 80 Radiology Anesthesiology 11,350 11, % 11,095 11, % -0.61% -70 Radiology - Non-Interventional 8,605 8, % 7,892 7, % 15.92% 1,182 Weighted Average (by phy count) 0.44% 1.68% 3.62% Net Collections Median Net Collections Percent Specialty Change Percent Percent Dollar Change Change Change Medical Specialties Allergy/Immunology 671, , % 547, , % 28.27% 148,004 Cardiology 546, , % 546, , % -5.29% -30,528 Cardiology - Cath Lab 598, , % 587, , % -2.50% -15,341 Dermatology 956, , % 953, , % 8.88% 77,987 Endocrinology 417, , % 367, , % 9.59% 36,545 Family Medicine 434, , % 440, , % 1.46% 6,254 Gastroenterology 770, , % 746, , % -0.96% -7,455 Hematology and Medical Oncology 349, , % 336, , % -1.03% -3,637 Hospitalist - Internal Medicine 220, , % 207, , % 4.18% 8,851 Hypertension and Nephrology 465, , % 427, , % 9.92% 42,049 Infectious Disease 280, , % 301, , % -1.53% -4,363 Internal Medicine 455, , % 410, , % 11.49% 46,897 Neurology 398, , % 383, , % 0.83% 3,267 Pediatrics & Adolescent - General 558, , % 503, , % 19.76% 92,177 Psychiatry 251, , % 230, , % 18.79% 39,831 Pulmonary Disease (without Critical Care) 416, , % 416, , % 0.59% 2,443 Rheumatologic Disease 462, , % 401, , % 11.57% 47,954 Urgent Care 519, , % 533, , % 4.99% 24,696 Surgical Specialties Cardiac / Thoracic Surgery 564, , % 596, , % -9.86% -61,774 Emergency Medicine 328, , % 324, , % -3.71% -12,681 General Surgery 532, , % 586, , % % -64,702 OB/GYN - General 703, , % 633, , % 7.92% 51,590 Ophthalmology 920, , % 824, , % 16.54% 130,549 Orthopedic Surgery 876, , % 874, , % 4.83% 40,387 Otolaryngology 776, , % 770, , % 7.06% 51,183 Urology 752, , % 760, , % -4.88% -38,595 Radiology/Anesthesia/Pathology Anesthesiology 427, , % 490, , % -6.71% -30,727 Radiology - Non-Interventional 690, , % 654, , % 7.93% 50,784 Weighted Average (by phy count) 0.53% 3.47% 4.58% 20,
5 Base Salary 9 Production Models 10 5
6 Incentive Pay 11 Incentive Pay Average quality incentive as a percent of overall compensation is 5.4% 12 6
7 Ranking Median Compensation (n>200) Other than FM with OB, PCP Spec. are not moving up the list. 13 Determinants of Compensation 14 7
8 Advantage: Lower Cost Shifting money to other initiatives Disadvantage: Hard to attract new physician Hard to retain staff Dissatisfied physicians Market Position Choices Lag the Market Meet the Market 15 Lead the Market Advantage: Matching the competition Can provide incentives Disadvantage: May not be able to retain star performers May not be able to attract star performers Advantage: Ability to attract stars Helps with long-term retention Perception of employer of choice Disadvantage: Must have sustained financial performance to be able to afford Difficult to change if economics change Most compensation models today maintain a large productivity element. Quality/clinical outcomes have moved beyond process measures (for many). Patient satisfaction (or proxy) has become a standard measure, but it represents a small percentage of overall pay. Use of citizenship (expected behaviors) varies by organization. Few groups have 20% or more at risk for non-productivity metrics. Market Trends and Directions 16 8
9 Structures Methodology Pros Cons Best time to use A Pure salary Incents team work No incentive to increase productivity, may incent coasting B C Salary plus incentive bonus Productivity base compensation per wrvu Add incentive for quality, productivity, patient experience Purely production driven Increased complexity, more difficult to administer Single driver of performance. Challenge to add other incentive metrics without it feeling like a withhold. Specialties that cannot support another FT. Physicians in Start-up first year or two. Physician want predictable base compensation. Employers want to incent other performance. Organization s single focus is on drive additional volume. Must have enough market share for physician to achieve compensation goals. 17 Structures Methodology Pros Cons Best time to use D Percentage based Physician paid on set percentage of charges or collections E Tiered productivity based F Hourly pay Relatively simple allows for focus on production but also on payers. As productivity increases compensation increase at an accelerated rate. Reward higher producers. Simple and easy to administer Depending on the methodology the payer mix can have a significant influence on physician total compensation. Increased complexity, more difficult to administer does not consider cost. Requires increased education to implement. No additional metrics for quality, patient experience or efficiency Sometimes used when acquiring a practice. Effective in organizations with higher physician performance or a lot of performance variability. Medical directorships, call coverage, distinct service times or shifts. Some organization combine different approaches into one compensation methodology! 18 9
10 Compensation Plan Evolution 19 The Foundation of Physician Compensation 20 10
11 Principles of Compensation to Consider 21 Successful Physician Compensation Plans 22 11
12 Transitioning from a Productivity-Based Plan to a Value-Based Plan Plan Period Transition Implemented 100% Production Plan Continues Performance data collected and tested. Shadow reports created. Identification of nonproductivity metrics occurs. Education and communication strategy developed. Production Compensation Reduced Funding established for nonproduction measures. Nonproduction incentives grow every year and are continuously evaluated and approved. Transition Completed The combination of production, nonproduction, panelsize, and guaranteed salary components continues to be evaluated. Education and communication ongoing. 53 Questions? Tom Dobosenski, President (763) tdobosenski@amgaconsulting.com AMGA Consulting Services 24 12
13 Appendix Normality of Survey Data 25 Normal Distribution 26 13
14 Family Medicine Curve 27 Family Medicine Curve 28 14
15 Trend Line Standard Deviation 29 Comp/wRVU vs. wrvu 30 15
16 Comp/Collections vs. Collections 31 16
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