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
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 251 73,006 291 1.14% 3 AMGA Survey Participants 4 2
Total Compensation Median Physician Compensation 2012-2015 2014-2015 2013-2015 2012-2015 2012-2015 Percent Percent Percent Dollar Change Specialty 2015 2014 Change 2013 2012 Change Change Medical Specialties Allergy/Immunology 281,100 267,338 5.15% 270,904 268,116 3.76% 4.84% 12,984 Cardiology 452,500 425,000 6.47% 420,991 430,316 7.48% 5.16% 22,185 Cardiology - Cath Lab 588,910 544,733 8.11% 547,112 524,731 7.64% 12.23% 64,179 Dermatology 453,909 419,146 8.29% 411,499 397,370 10.31% 14.23% 56,539 Endocrinology 241,926 233,769 3.49% 234,258 221,400 3.27% 9.27% 20,526 Family Medicine 225,899 229,607-1.61% 223,810 219,362 0.93% 2.98% 6,537 Gastroenterology 506,022 471,336 7.36% 432,616 435,120 16.97% 16.29% 70,902 Hematology and Medical Oncology 407,000 367,404 10.78% 350,268 348,157 16.20% 16.90% 58,843 Hospitalist - Internal Medicine 263,500 249,599 5.57% 241,250 236,500 9.22% 11.42% 27,000 Hypertension and Nephrology 309,000 288,661 7.05% 277,449 277,934 11.37% 11.18% 31,066 Infectious Disease 247,362 247,342 0.01% 242,447 229,511 2.03% 7.78% 17,851 Internal Medicine 239,968 237,548 1.02% 226,833 224,417 5.79% 6.93% 15,551 Neurology 280,126 268,096 4.49% 255,004 249,250 9.85% 12.39% 30,876 Pediatrics & Adolescent - General 233,609 232,097 0.65% 222,827 220,644 4.84% 5.88% 12,966 Psychiatry 246,500 232,750 5.91% 224,878 217,194 9.62% 13.49% 29,306 Pulmonary Disease (without Critical Care) 335,928 304,367 10.37% 300,646 304,901 11.74% 10.18% 31,027 Rheumatologic Disease 247,112 239,112 3.35% 240,250 229,051 2.86% 7.88% 18,061 Urgent Care 251,680 245,606 2.47% 239,733 242,145 4.98% 3.94% 9,535 Surgical Specialties Cardiac / Thoracic Surgery 596,637 569,073 4.84% 525,944 544,087 13.44% 9.66% 52,550 Emergency Medicine 324,015 316,739 2.30% 301,000 297,500 7.65% 8.91% 26,515 General Surgery 390,481 380,778 2.55% 373,478 370,024 4.55% 5.53% 20,457 OB/GYN - General 321,747 322,423-0.21% 312,541 303,350 2.95% 6.06% 18,397 Ophthalmology 401,926 380,600 5.60% 372,552 371,987 7.88% 8.05% 29,939 Orthopedic Surgery 572,790 538,123 6.44% 525,000 515,759 9.10% 11.06% 57,031 Otolaryngology 419,500 393,287 6.67% 383,141 374,387 9.49% 12.05% 45,113 Urology 433,308 434,563-0.29% 424,603 415,598 2.05% 4.26% 17,710 Radiology/Anesthesia/Pathology Anesthesiology 416,094 398,240 4.48% 394,734 377,375 5.41% 10.26% 38,719 Radiology - Non-Interventional 483,660 476,013 1.61% 453,216 459,186 6.72% 5.33% 24,474 Weighted Average (by phy count) 2.61% 5.96% 7.68% 23,785 5 Primary Care by Region 6 3
Work RVUs Median Work RVUs 2012-2015 Specialty 2015 2014-2015 Percent 2014 Change 2013 2012 2013-2015 2012-2015 2012-2015 Percent Percent Unit Change Change Change Medical Specialties Allergy/Immunology 4,020 3,952 1.74% 4,033 3,855-0.30% 4.29% 165 Cardiology 7,414 7,335 1.08% 7,150 6,934 3.70% 6.92% 480 Cardiology - Cath Lab 9,541 8,804 8.36% 8,491 8,298 12.36% 14.97% 1,242 Dermatology 7,570 7,333 3.24% 7,389 7,282 2.45% 3.96% 288 Endocrinology 4,737 4,601 2.97% 4,463 4,393 6.15% 7.85% 345 Family Medicine 4,863 4,975-2.25% 5,010 4,890-2.94% -0.54% -26 Gastroenterology 8,427 8,349 0.94% 7,947 7,992 6.04% 5.45% 436 Hematology and Medical Oncology 4,679 4,652 0.57% 4,630 4,393 1.05% 6.51% 286 Hospitalist - Internal Medicine 4,273 4,156 2.81% 4,013 4,021 6.47% 6.26% 252 Hypertension and Nephrology 6,643 6,390 3.97% 6,418 6,159 3.51% 7.86% 484 Infectious Disease 4,579 4,754-3.69% 4,742 4,299-3.44% 6.51% 280 Internal Medicine 4,873 4,708 3.51% 4,723 4,717 3.18% 3.31% 156 Neurology 4,820 4,639 3.90% 4,790 4,717 0.63% 2.19% 103 Pediatrics & Adolescent - General 5,411 5,448-0.69% 5,425 5,111-0.26% 5.86% 299 Psychiatry 4,109 4,169-1.43% 3,737 3,381 9.98% 21.54% 728 Pulmonary Disease (without Critical Care) 5,611 6,120-8.30% 6,129 6,057-8.45% -7.36% -446 Rheumatologic Disease 4,800 4,558 5.31% 4,557 4,662 5.34% 2.97% 139 Urgent Care 4,905 5,184-5.38% 5,271 5,217-6.94% -5.97% -312 Surgical Specialties Cardiac / Thoracic Surgery 9,595 9,700-1.08% 9,229 9,500 3.97% 1.00% 95 Emergency Medicine 7,009 7,664-8.54% 7,216 7,073-2.87% -0.90% -64 General Surgery 6,857 6,782 1.11% 6,942 7,026-1.22% -2.41% -170 OB/GYN - General 7,032 6,974 0.82% 6,706 6,476 4.86% 8.59% 556 Ophthalmology 8,636 8,460 2.08% 8,813 8,649-2.01% -0.15% -13 Orthopedic Surgery 7,792 8,133-4.19% 7,886 8,026-1.18% -2.91% -233 Otolaryngology 6,955 6,775 2.67% 6,828 6,891 1.87% 0.93% 64 Urology 7,536 7,344 2.61% 7,317 7,456 2.98% 1.07% 80 Radiology Anesthesiology 11,350 11,207 1.28% 11,095 11,420 2.30% -0.61% -70 Radiology - Non-Interventional 8,605 8,463 1.68% 7,892 7,423 9.03% 15.92% 1,182 Weighted Average (by phy count) 0.44% 1.68% 3.62% 202 7 Net Collections Median Net Collections 2012-2015 2014-2015 Percent Specialty 2015 2014 Change 2013 2012 2013-2015 2012-2015 2012-2015 Percent Percent Dollar Change Change Change Medical Specialties Allergy/Immunology 671,466 626,034 7.26% 547,393 523,462 22.67% 28.27% 148,004 Cardiology 546,068 506,979 7.71% 546,389 576,596-0.06% -5.29% -30,528 Cardiology - Cath Lab 598,013 577,444 3.56% 587,543 613,354 1.78% -2.50% -15,341 Dermatology 956,141 998,357-4.23% 953,342 878,155 0.29% 8.88% 77,987 Endocrinology 417,454 387,185 7.82% 367,575 380,909 13.57% 9.59% 36,545 Family Medicine 434,560 458,748-5.27% 440,651 428,306-1.38% 1.46% 6,254 Gastroenterology 770,361 802,444-4.00% 746,861 777,816 3.15% -0.96% -7,455 Hematology and Medical Oncology 349,312 341,184 2.38% 336,965 352,950 3.66% -1.03% -3,637 Hospitalist - Internal Medicine 220,662 209,334 5.41% 207,768 211,811 6.21% 4.18% 8,851 Hypertension and Nephrology 465,824 409,810 13.67% 427,900 423,775 8.86% 9.92% 42,049 Infectious Disease 280,685 302,477-7.20% 301,677 285,048-6.96% -1.53% -4,363 Internal Medicine 455,062 439,379 3.57% 410,976 408,165 10.73% 11.49% 46,897 Neurology 398,801 360,453 10.64% 383,833 395,534 3.90% 0.83% 3,267 Pediatrics & Adolescent - General 558,550 561,253-0.48% 503,707 466,373 10.89% 19.76% 92,177 Psychiatry 251,776 251,648 0.05% 230,960 211,945 9.01% 18.79% 39,831 Pulmonary Disease (without Critical Care) 416,953 408,942 1.96% 416,926 414,510 0.01% 0.59% 2,443 Rheumatologic Disease 462,540 397,797 16.28% 401,310 414,586 15.26% 11.57% 47,954 Urgent Care 519,910 525,019-0.97% 533,962 495,214-2.63% 4.99% 24,696 Surgical Specialties Cardiac / Thoracic Surgery 564,651 610,575-7.52% 596,113 626,425-5.28% -9.86% -61,774 Emergency Medicine 328,695 331,562-0.86% 324,380 341,377 1.33% -3.71% -12,681 General Surgery 532,918 564,093-5.53% 586,061 597,620-9.07% -10.83% -64,702 OB/GYN - General 703,100 667,077 5.40% 633,558 651,510 10.98% 7.92% 51,590 Ophthalmology 920,016 860,596 6.90% 824,562 789,467 11.58% 16.54% 130,549 Orthopedic Surgery 876,607 846,216 3.59% 874,626 836,221 0.23% 4.83% 40,387 Otolaryngology 776,119 744,636 4.23% 770,602 724,936 0.72% 7.06% 51,183 Urology 752,231 787,802-4.52% 760,689 790,826-1.11% -4.88% -38,595 Radiology/Anesthesia/Pathology Anesthesiology 427,364 471,292-9.32% 490,692 458,091-12.91% -6.71% -30,727 Radiology - Non-Interventional 690,818 691,625-0.12% 654,634 640,034 5.53% 7.93% 50,784 Weighted Average (by phy count) 0.53% 3.47% 4.58% 20,694 8 4
Base Salary 9 Production Models 10 5
Incentive Pay 11 Incentive Pay Average quality incentive as a percent of overall compensation is 5.4% 12 6
Ranking Median Compensation (n>200) Other than FM with OB, PCP Spec. are not moving up the list. 13 Determinants of Compensation 14 7
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
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
Compensation Plan Evolution 19 The Foundation of Physician Compensation 20 10
Principles of Compensation to Consider 21 Successful Physician Compensation Plans 22 11
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)226-5353 tdobosenski@amgaconsulting.com AMGA Consulting Services 24 12
Appendix Normality of Survey Data 25 Normal Distribution 26 13
Family Medicine Curve 27 Family Medicine Curve 28 14
Trend Line Standard Deviation 29 Comp/wRVU vs. wrvu 30 15
Comp/Collections vs. Collections 31 16