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    Chris Harrop
    Chris Harrop

    A new age of healthcare is reshaping how medical group practices look at physician compensation matters.

    To that end, Justin Chamblee, CPA, MBA, FACMPE, senior vice president and director of operations for Coker Group, recently joined MGMA senior editor Craig Wiberg, MLS, MBA, for an MGMA Insider podcast to discuss his upcoming, three-hour preconference session, “Compensation Planning for the New Age of Healthcare,” at MGMA19 | The Data Conference on May 16 in Orlando, Fla.

    Chamblee says his presentation will underscore just how important physician compensation planning is amid the changing dynamics in the industry, including best practices for taking a step-by-step redesign of a physician compensation plan and the ways to ensure it works in the future.

    Chamblee notes two primary drivers in today’s healthcare industry for taking a fresh look at compensation models:
    1. Financial viability of the organization, to ensure it can afford a compensation model that it has long term.
    2. The addition of value-based incentives into compensation models to align with shifting reimbursement.
    “Most physician arrangements have some element of value-based incentives right now,” Chamblee says, which means that it’s crucial for a health system or medical group to understand their specific markets. For a rural Minnesota practice, “MIPS may be the only thing that they're focusing on right now,” he says, if commercial payers haven’t pushed for a shift to value-based care. But in an urban market such as Boston, payers may be more focused on value-based care. “Then they need to be a little bit more aggressive and restructuring their compensation strategy to meet the changing dynamics of the players in that market.”

    That said, Chamblee notes that practices can push for improvements in quality of care by tying dollars to it before payers begin pressing for that. Meanwhile, physician compensation is still volume-driven with a big focus on collections or work RVUs (wRVUs) — “those are still very much in vogue and used heavily.” Those metrics are supplemented by incentives based on panel size and management in primary care that may not generate wRVUs.

    Organizations just starting out with value-based incentives oftentimes focus on what Chamblee calls process-based metrics, measuring completion of certain tasks that will lead to higher quality care. More robust value-based initiatives then see a shift from process-based metrics to “focusing more on the actual outcomes,” Chamblee says.

    Another key concern in building a new compensation model is how to reward improved quality. Chamblee says in his experience working with health systems and medical groups, there historically have been bonuses and other incentives for physicians to attend certain meetings that don’t relate back to the new realm of value-based care outcomes desired. He instead recommends making some of those expectations part of a minimum work standard that is then supplemented with incentive “carrots” tied to key objectives in care outcomes.

    Practice leaders who design new compensation models also need to be mindful not just of what incentives are reasonably achievable, but also what they might expect from new, younger physicians who might prefer more work-life balance than previous generations of physicians. “The expectations of call and other activities that typically we just assumed by a different generation of physicians are not the norm anymore,” Chamblee says.

    No matter how you structure a new compensation model, Chamblee notes that it is an exercise in change management. “If we don’t have an effective strategy to get from Point A to Point B, the Point B is not ever going to be effective,” he says. “A lot of that is working with physicians to educate them on the new model and demonstrating how they will perform on the new model prior to the implementation of the new model so that there's a level of comfort prior to full implementation.”

    Chris Harrop

    Written By

    Chris Harrop

    A veteran journalist, Chris Harrop serves as managing editor of MGMA Connection magazine, MGMA Insights newsletter, MGMA Stat and several other publications across MGMA. Email him.

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