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Physician compensation benchmarks to navigate the transition from volume to value

MGMA Stat - May 25, 2022

RVUs

Compensation & Benefits

Provider Compensation

Chris Harrop
Earlier this week, the 2022 MGMA DataDive Provider Compensation launched, offering access to one of the most comprehensive data sets in the industry around physician-owned and hospital-owned productivity and compensation data for physicians and advanced practice providers (APPs).

One of the more intriguing aspects of this data is its ability to help us gauge several industry trends, especially in the realm of physician compensation related to the ongoing shift from volume to value.



A May 24, 2022, MGMA Stat poll found that 42% of medical groups say that quality performance metrics are included in physician compensation plans, compared to 58% that do not. The poll had 513 applicable responses.

Prior to the COVID-19 pandemic, previous MGMA Stat polls on this topic showed a very slow growth in the inclusion of quality metrics in compensation plans:
  • Just more than one in four (26%) medical groups tied quality performance to physician compensation in 2016.
  • By July 2018, the share of groups with quality tied to compensation rose to 36%.
  • A March 2019 poll — the last such poll MGMA Stat conducted on this topic prior to the pandemic — found that nearly 4 in 10 (38%) of groups had tied quality performance to physician compensation.

Respondents to the latest poll tell MGMA that the share of physician compensation tied to quality performance has changed during the pandemic:
  • 35% report they have increased the share of compensation tied to quality in the past two years.
  • 62% of medical groups have the same share of compensation tied to quality.
  • Only 2% of respondents said they decreased the percentage of compensation tied to quality.

Do practices get what they pay for?

MGMA’s new data report, Provider Pay and the Pandemic: Realizing Recovery, offers insight into using the MGMA DataDive Provider Compensation data set to better understand physician compensation arrangement and incentive data — enough to reveal where medical groups are on the journey from volume to value.

As recently retired MGMA senior fellow David N. Gans, MSHA, FACMPE, explains in his article within the report, hospital- and health system-owned practices typically have a different basis for compensating providers than private practices, and the MGMA DataDive Provider Compensation data survey reports these varying compensation methods — 100% salary, 100% productivity, or versions of each with quality metrics included — among the demographic information collected in the survey.

Median total compensation by specialty, owner and compensation method












“Including quality metrics in the provider compensation formula is often in response to contracts with commercial and government payers that include bonus arrangements or penalties associated with meeting quality metric goals,” Gans wrote. “In many instances, quality metrics are included in the reporting requirements along with other goals tied to the cost of care, so it is not unusual to see similar incentives integrated into the provider compensation systems.”

As shown in Table 1, MGMA DataDive survey data from 2020 found that building incentives into physician compensation plans tied to quality metrics can result in improved median total compensation. “Physicians with the greatest compensation in their specialty category in physician-owned practices — where there is a limited revenue pool to be distributed — were paid under a compensation formula that rewarded productivity,” Gans wrote. “Hospital- and system-owned practices, even though they exist in a very different environment, report something similar: The doctors who are paid under a compensation plan that incentivizes production have greater compensation than those on salary.”

Figure 1. Percent of practices with compensation plans that include quality metrics, by owner

Quality metrics as a part of physician compensation plans, by ownership







As shown by MGMA DataDive data (Figure 1), the frequency of compensation formulas with quality metrics in hospital-/system-owned practices is relatively double that of the frequency of physician-owned practices, which Gans noted is consistent with how these systems are typically larger practices with the more sophisticated information systems needed to collect quality metrics. “Hospital- and system-owned practices are also more apt to have government and payer accountable care organization (ACO) contracts that reward the organization for meeting quality and cost-saving goals and could benefit by having similar quality metrics in their provider compensation plans,” Gans wrote.

For deeper insights into how doctors with quality metrics in their compensation methodology compare to their peers, access Gans’ full article or download the data report.

Learn more: MGMA DataDive Provider Compensation

Balance compensation with productivity with the most reliable data in the industry. MGMA DataDive Provider Compensation is your go-to resource for any physician or advanced practice provider (APP) compensation decisions. Use it to understand the unique differences among physician-owned, academic and hospital-owned practice benchmarks across multiple regions, practice sizes and provider experience levels. Benchmarks include:
  • Compensation (including total pay, bonus/incentives, retirement)
  • Productivity (work RVUs, total RVUs, professional collections and charges)
  • Benefit metrics (hours worked per week/year and weeks of vacation)

JOIN MGMA STAT

Our ability at MGMA to provide great resources, education and advocacy depends on a strong feedback loop with healthcare leaders. To be part of this effort, sign up for MGMA Stat and make your voice heard in our weekly polls. Sign up by texting “STAT” to 33550 or visit mgma.com/stat. Polls will be sent to your phone via text message.

Do you have any best practices or success stories to share on this topic? Please let us know by emailing us at connection@mgma.com

About the Author

Chris Harrop
Chris Harrop
Senior Editorial Manager MGMA

Chris Harrop, senior editorial manager, MGMA, serves as editor of MGMA's flagship print publication, MGMA Connection magazine, and oversees various association content publications while also serving as a contributing author for the organization. Prior to MGMA, he was managing editor of multiple news organizations in the Denver metro area. Email him.

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