Creating a physician compensation plan is a difficult thing for healthcare systems to do, but if you keep it simple, transparent and straightforward, you’ll have a better chance of success said hospital-physician alignment expert, Susan Stowell, during an education session offered earlier this month by the Maine chapter of the Healthcare Financial Management Association.
[See also: Bringing the romance back to hospital-physician partnerships.]
What are some things organizations can do to achieve successful physician compensation plans? Stowell, a partner at Stroudwater Associates, a healthcare consulting firm with corporate headquarters in Portland, Maine, offered these suggestions:
• Engage your doctors. Doctors and the healthcare systems that employ them often have competing views of what the physician compensation plan should look like, said Stowell, so get started on the right foot and include them in the design process.
• Determine which compensation models work best for your organization and recognize that your compensation plan will have to be somewhat fluid in order to meet internal and external changes over time.
• Move away from percentage-based compensation models to incentive-based models.
• For every incentive, there must be a valid way of measuring performance. Keep in mind that having too many incentives diffuses their value.
• Structure your compensation plans around your organization’s overall goals.
• Understand your local market.
• Understand what are your organization’s capabilities and limitations. If your organization’s technology systems are not set up to support your compensation plan, you won’t be able to meet your goals or properly implement the plan.
• Tell your doctors where you expect them to spend their time.
• Continually monitor your compensation system and measure and report data.
• Share data with your doctors. They can’t change their behavior if they don’t know what needs changing.
“Accept the fact that you will not have a perfect compensation system,” Stowell advised. “You’re always going to have unintended consequences that you don’t want, and you’ll have to work through those.”
Follow HFN associate editor Stephanie Bouchard on Twitter @SBouchardHFN.