Health systems want physicians to be more productive, and physicians want to be paid fairly for the work they do.
Somewhere between those two goals, many compensation models break down — either rewarding volume at the expense of everything else or offering so much guaranteed pay that productivity has no meaning.
Westchester Medical Center Health Network, based in Valhalla, N.Y., is working through that tension now. The system is building a new physician compensation structure as it expands its medical group, which includes roughly 1,100 to 1,200 academic and community practitioners, and shifts from an inpatient-centric mix close to 80/20 toward something nearer 50/50 or 60/40 ambulatory.
Sean Tedjarati, MD, executive vice president, chief physician ambulatory officer and CMO of WMCHealth’s medical groups, told Becker’s the process starts with national benchmarks from sources such as the Medical Group Management Association, which give academic and community physicians a reference point. But those benchmarks are not a formula that applies the same way to every physician or specialty.
“You have to look at the composite of those national benchmarks that allows folks to know that here’s where their starting point is, and the compensation package needs to involve both some level of security, but some level of, for lack of better terms, skin in the game of what productivity looks like,” Dr. Tedjarati said.
That skin in the game runs both ways. Dr. Tedjarati said asking physicians to carry productivity risk assumes the organization has made its own commitment to provide an environment where they can be productive, whether that means access to the OR or operational efficiency in the outpatient setting. The model also needs real quality and patient satisfaction measures, so productivity is not the only thing being counted.
Transparency is what holds the arrangement together. Physicians should know the benchmarks they’re being measured against and be able to track their own performance as it happens, not just at the end of a fiscal year.
“They can have access to their data. They can have access to their benchmarks. They can have access to where they are on a day-to-day basis,” he said.
The productivity conversation is new territory for some physicians. Academic physicians historically chose their roles for teaching, research and an academic environment, and many understood their clinical output would be measured differently than in community practice. As WMCHealth builds out its ambulatory medical group, Dr. Tedjarati said leaders now have to walk those physicians through what relative value units look like, while making clear they are valued for more than RVUs alone, including their quality, their patient satisfaction and how they train and retain residents and fellows.
National benchmarks can also lag the market. In specialties such as radiology, where remote work and new technology have reshaped expectations, he said the benchmarks don’t always keep up with where the specialty actually is. Generational expectations add another variable: Newer physicians weigh time at home and how they are measured, not just pay.
“It’s not always salaries; also about the time that they would have at home and what kind of metrics they have,” Dr. Tedjarati said.
Productivity incentives also have to make room for the work that doesn’t generate RVUs. For physician-researchers, that means thinking in multiyear terms about protected time while they pursue grants, and buying down clinical time appropriately for physicians with leadership roles or positions in residency programs.
“If it’s research, how do you support them for the next three years for them to bring on additional funding? Funding has changed as well,” he said.
The risk in any productivity-based model, Dr. Tedjarati said that physicians start to feel like a cog in a machine. The structure has to signal that the organization still values them for who they are and what they bring, and that they remain part of a larger mission. Because institutions are constantly competing for the same physicians, he said, getting that balance wrong carries a real cost.
“It’s really about agility. It’s about agility and creating comp models that people can understand,” he said.
When those pieces are in place, Dr. Tedjarati said, the incentive structure becomes something physicians can see themselves succeeding in rather than something imposed on them.
“I think people do well when they know where they’re starting and where they’re going to, and that if they happen to be more productive and more efficient, maintaining the quality that is required, then they should be appropriately rewarded and compensated,” he said.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
