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Physician compensation in transition. The market-based alternative
1Management Consulting Services, East Englewood, CO 80112, USA.
Medical Group Management Journal
|December 9, 1995
Summary
Current healthcare compensation models are failing. Market-based compensation, linking pay to productivity and outcomes, offers a viable alternative for physicians navigating evolving healthcare systems.
Area of Science:
- Health Policy
- Medical Economics
- Healthcare Management
Background:
- Existing physician compensation systems are inadequate for emerging healthcare models.
- Factors like healthcare consolidation, regulatory changes (Stark legislation), market dynamics, and managed care influence compensation.
- There is a need for alternative compensation strategies that align with current healthcare realities.
Purpose of the Study:
- To explore the limitations of current compensation systems in healthcare.
- To introduce and define market-based compensation as a potential solution.
- To outline the key components of future market-based compensation plans.
Main Methods:
- Analysis of current trends influencing healthcare compensation.
- Definition of market-based compensation, emphasizing the link between productivity and pay.
- Identification of key elements for future compensation models.
Main Results:
- Market-based compensation is gaining traction due to external pressures.
- This model defines compensation as a relationship between productivity and external benchmarks.
- Future plans will integrate productivity (dollars or RVUs), resource utilization, outcomes, service ratings, and physician 'citizenship'.
Conclusions:
- Traditional compensation systems require reevaluation.
- Market-based compensation offers a structured approach to align physician pay with evolving healthcare demands.
- Future compensation models should holistically incorporate productivity, resource management, quality outcomes, patient satisfaction, and physician engagement.
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