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    Steven L. Delaveris
    Steven L. Delaveris, DO, FAAFP

    There are many aggregators of physicians and their practices. In fact, a 2021 study found that “70% of U.S. physicians are employed by hospital systems or other corporate entities.”1 The survey revealed that about 49% of physicians are employed by hospital-based health systems, while 20% of physicians are now employed by private equity and health insurers. Different types of organizations have different goals, but they have a common challenge of earning the physician loyalty necessary to help all parties work to develop and achieve mutually aligned and beneficial goals. 

    Physicians are influenced by their peers, data, evidence, and education, and strive to be the best. The profession comprehensively seeks a sense of partnership, rather than bosses who push policies, standard operating procedures and dashboards — none of which have clinical or personal professional relevance.

    Ultimately, physicians are seeking stability and security, and the COVID-19 pandemic has exacerbated other underlying disrupters of all practice models. Compensation, which is top of mind, needs to share the spotlight with other important factors, such as autonomy and culture. Salary is a “hygiene factor” that should be sufficiently fair and generous to not matter.


    Compensation is principally determined by the parameters of net income (profit) and available cash for physicians in private practice. There is a similar construct for owners of private group practices, while employed/non-owner physicians may be paid enough in recruitment incentives to immediately engage them. Owners may divide and reinvest the rest, simultaneously considering the prospect of ownership.

    Hospital-based health systems have effectively employed physicians directly or through subsidiary organizations to varying degrees for years. Typically relying upon survey data to define fair market value, a productivity-based methodology (evolving from gross charges and collections to a payer blind RVU-based model) predominates. Level salary methods — such as used by the Mayo Clinic — and other approaches are less prevalent. At the same time, changes in reimbursement, including bundle payments, penalties that replace cost of care for complications and readmissions, and site-neutral payments and rate changes due to federal budget neutrality requirements, are creating larger “losses” of hospital-owned and -operated medical groups.

    While physician compensation methodologies are a minor player in U.S. healthcare costs, such approaches are an easy and frequent target of regulators, and are a substantial risk for not-for-profit hospital systems. Private equity and insurance companies that have equity, shared savings, and other levers are not subject to many of the same regulatory restrictions that plague hospital systems.

    Physician employers and management operating organizations of all types need to join with physicians and develop a road map from current transactional relationship-defining compensation and decouple from consumption-based rewards. Adapting a Balanced Scorecard2 format that embeds Alliance Mapping3 provides a framework by which incentives and satisfying compensation challenges are aligned — the Centers for Medicare & Medicaid Services (CMS) model for physician payment reform4 can be a starting point or construct around which organizations may define and align incentives to achieve the aspirations of value in all scenarios.

    Stakeholders, including physicians, may define a broader view of physician “outputs” not limited to RVU production and downstream contribution margin. Those iterative measures of physician output should include quality, resource utilization, evidence-based best practice adoption and value (total cost of care), in addition to guiding principles of patient experience and care team engagement. While reduction of clinical variation correlates with waste elimination and improved outcomes, we must focus on what Hubert Joly describes as conditions that support engagement and motivation: autonomy, mastery, and purpose.5 In essence, these conditions promote a shared understanding that no “formula” will sufficiently capture the complexities of a real physician/provider/care team workforce. Only transparency, dialogue and judgment can make sense of what is fair. As leaders, it is our responsibility to increase the humanity, vitality and adaptivity of the system, not limited to, but including, compensation.


    After compensation, the matter of autonomy is top of the list of physician concerns. The need for prior authorizations and drug formulary compliance negatively impact a sense of clinical autonomy, while schedule templates, productivity targets and onerous tasks contribute to the dissatisfier. The opportunity, however, is to reframe a view of autonomy, such that it supports a system/group/enterprise construct.

    Quantum theory is the manner in which things influence each other, or, in the view of many in the physician community, a patient outcome. We must demonstrate that in the continuum of care and health of a population there is value that no individual can create or accomplish alone, thereby establishing a culture of collaborative medicine supported by quantitative evidence that “it works” and inaugurating the purpose of improving health and providing the right metrics and pure analytics that allow us to learn and continuously improve and support the idea. Adapting Esther Wojcicki’s TRICK (Trust, Respect, Independence, Collaboration, Kindness) may support in achieving the goal of “creating self-responsible people in a self-responsible world.”6

    The three primary reasons that the 8,000-plus surveyed physicians state cause them to feel less love of their profession are EHRs, regulatory/insurance requirements and loss of clinical autonomy. Interestingly, it’s the EHRs and regulatory/insurance interference that physicians say are a big part of what’s keeping them from giving their patients the best care possible.7


    After compensation and autonomy, our road map leads to culture and the goal of our operational teams to act as support services, whose purpose is to nurture the personal and professional success of our physicians and care team members, rather than a management team that drives policy mandates and standard operating procedures, conducts purposeless meetings, and fails to effectively communicate with and engage providers. As Joly writes, “The role of our support services teams is to foster an environment that supports a life of meaning and dignity.”8 We recognize that EHRs and task-laden workflows are a major physician dissatisfier and contributor to burnout, so we should focus on the business of creating an EHR application that supports, rather than defines, workflows and encourages reduction in care variation.

    The AMA has engaged partnerships with Dartmouth-Hitchcock, RAND, MedStar Health’s National Center for Human Factors in Healthcare, The Pew Charitable Trusts and AmericanEHR, and is represented on the advisory committee of the SMART Initiative, compiling tools and ideas that may be immediately applied to realize this goal.9

    Our aforementioned road map includes:

    • The creation of value through active learning.
      • We recognize that physicians:
        • Respond to data and are motivated by evidence and proof
        • Respond to data-driven processes
        • Respond to transparent group dynamics and are motivated by recognition
        • Are patient champions
        • Prefer less bureaucracy and desire a forum for communication and inclusion
        • Are open to solving broader issues
        • Develop and define shared measures of success
        • Have a willingness to collaboratively participate.
    • A data-driven, evidence-based approach is made up of:
      • Statistical tools and applied theory
      • Commitment to objective data
      • Analysis free of impugning motives or professional capability
      • Evidence-based best practices that produce higher quality at lower cost.

    Social media platforms have demonstrated the power to drive behaviors, with Cambridge Analytica and Facebook perhaps reigning as masters of that universe.10 Survey and rounding tools should be designed adapting the principles of nudge,11 choice architecture, and behavioral science to nurture alignment with system goals. While we teach and engage, the survey and rounding tools support value and a call to action in support of the organizational goals. The framing of choice is applied to affect the outcome of the physician decisions, action and behavior.

    Before we survey physicians, we should have a sense of our goal/target condition. How we frame a question or query can inform and guide the respondent’s behavior, supporting a transition of the mental model of autonomy from the individual to the shared goals of the group.

    Survey and rounding tools will be iterative, advancing the understanding and alignment of goals. The initial survey is to achieve level setting — enumerating concepts of group autonomy and guiding principles that support collaboration and a continuum of care. Subsequent surveys and beyond act as a foundation for the action plan: “In the last survey we learned that …. can we improve?”

    We mitigate concerns related to our motives through our guiding principle of transparency, whereby adequately respecting capacity for rational deliberation. As Thaler and Sunstein write: “Our goal, in short, is to help people make the choices that they would have made if they had paid full attention and possessed complete information, unlimited cognitive ability, and complete self-control.”12

    Fundamentally, we are employing the Socratic method to promote patient-centered, valued-based care: to teach, to lead, to develop, to nurture.

    Our mental model and approach to physician alignment should eliminate prescriptive triggers, mandates, and rules that rely too heavily on volume targets, as well as prescriptive analytics that do not allow for human synthesis of information and contextual awareness to support decision-making. Over-engineering administration of key capacity management processes could lead to sub-optimal decisions and impact our ability to respond to a dynamic situation.

    The early wins of increased reimbursement in fee-for-service rates, decreased costs facilitated by centralized backroom functions, and increased access to technology platforms fall short of achieving sustainable benefit of clinical and financial value of relationships among the stakeholders. Establishing partnerships with physicians is essential to any enterprise format’s long-term success.

    As a disciple of philosophies that correlate patient experience, as measured by HCAHPS and related surveys, and patient-reported clinical outcomes, I advocate support for the literature that links physician and care team engagement with the patient experience. Enterprises, whether venture capital-backed, insurance companies, integrated health systems, or others, will fall short of realizing the value of their efforts without establishing a sense of partnership with physicians.

    Our hope and expectation are to leverage humanity, human strengths, and intuition in sponsorship of a relationship that allows physicians to value the culmination of personal benefits, as well as the feeling of pride and purpose that comes from supporting the common goal of improving the health of each person and ultimately, the health of our population.


    1. Physicians Advocacy Institute. “COVID-19’s Impact on Acquisitions of Physician Practices and Physician Employment 2019-2020.” June 2021. Available from:
    2. Kaplan RS, Norton DP. “The Balanced Scorecard — Measures that Drive Performance.” Harvard Business Review. January-February 1992. Available from:
    3. Kaplan RS, Norton DP, Rugelsjoen B. “Managing Alliances with the Balanced Scorecard.” Harvard Business Review. January-February 2010. Available from:
    4. Mechanic R, Perlman A. “Medicare Physician Payment Reform — Enhancing Incentives for Value-Based Care.” N Engl J Med. 2021 Aug 19;385(8):675-677. doi: 10.1056/NEJMp2106852.
    5. Joly H. The Heart of Business: Leadership Principles for the Next Era of Capitalism. 2021. Harvard Business Review Press.
    6. Wojcicki E. How to Raise Successful People: Simple Lessons for Radical Results. 2019. Mariner Books.
    7. The Physicians Foundation. “2018 Survey of America’s Physicians: Practice Patterns & Perspectives.” 2018. Available from:
    8. Joly.
    9. AMA. “Improving electronic health records.” Available from:
    10. Amer K, Noujaim J. “The Great Hack.” 2019.
    11. Thaler RH, Sunstein CR. Nudge: The Final Edition. 2021. Penguin Books.
    12. Ibid.

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