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MGMA poll: Fewer than half of respondents say physicians feel satisfied with compensation plan

By Kenneth T. Hertz, FACMPE
June 8, 2017
Body of Knowledge Domain(s): Financial Management

Are your doctors happy with their compensation plan – and this might be a slightly different answer than if you asked them if they were happy with their salary – or are they all a little bit unhappy? I’ll come back to the unhappy part in a minute.

With increasing cost structures and evolving and declining reimbursement trends, the nexus of the two trend lines often results in declining compensation for physicians. Respondents of a recent MGMA Stat poll who answered that physicians are not satisfied with their compensations plans cite that their current reimbursement simply is not enough compared to the administrative burden. Some report that physicians, “don't like the productivity component due to EHR. They feel the administrative inputting they must do inhibits how many patients they can see per day, thus limiting opportunity to bring their compensation up to median standards.” Nobody likes to earn less year after year.

Practice administrators can influence the situation through thoughtful and rigorous financial management and payer negotiations, as well as ensuring efficient and effective practice operations. Administrators also should ensure that they have the “right” compensation plan in place and that it is thoroughly understood by the physicians and accurately administered.

There are three things to know about compensation plans. When you’ve seen one, you’ve seen one. And it’s probably best if everybody is just a little bit unhappy with the plan. Why? Because that’s likely the best way to develop a plan that is equitable for everybody. Finally, most groups are in one of three stages with a plan – adopting a new plan, living through a plan or deciding to change their plan.

Here are a few tips as you develop a plan:

  • Talk with your physicians about your current plan and before you decide to change your plan. Ask questions, and listen to the answers.
    • a.    Are you happy with the current plan? Why?
    • b.    What do you like most about the plan?
    • c.    What do you like least?
    • d.    If we were to change the plan, what would be a deal breaker?
    • e.    What would you like to change in the current plan? 
  • Before discussing the math behind the plan, thoroughly discuss the concept, what you want to accomplish, deal breakers, etc. Once an agreement is reached, then do the math. 
  • Model the new plan against previous periods of compensation to provide a benchmark for the plan’s impact on salary.
  • There will likely be numerous iterations and tweaking before a new plan is finally adopted. Once adopted, give it time. Monitor how it’s working. Listen to the physicians.
  • Don’t be afraid to revisit the concept, goals and process if the new plan isn’t working.

Compensation plans aren’t easy. Sometimes we make the process more difficult than it needs to be. Communication goes a long way toward resolving issues.

Want to receive timely industry data like this every week? MGMA Stat is a simple way to get real-time healthcare data all through text message.

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Kenneth T. Hertz, FACMPE, principal consultant, MGMA Health Care Consulting Group

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