Practice efficiency and physician compensation: a case study

One of the major challenges facing today's health care executive is that of achieving maximum efficiency. The public also requires an efficient health care system. However, a problem occurs when the health care executive defines "efficiency" in a manner that is diametrically opposed to the public's definition. Maximum efficiency in the physician practice is defined by productivity equal to capacity. Maximum efficiency of the health care system is defined by lower health care costs. If the physician practice is achieving its goal of maximum efficiency, the market economy will likely force a failure in achieving the public's goal of a lower cost health care system! The following case study provides an opportunity to review this health care management conundrum and offers insights into a possible approach for some solution through attention to physician compensation.