Family Physician Clinical Compensation in an Academic Environment: Moving Away From the Relative Value Unit

Primary care physician compensation structures have remained largely volume-based, lagging behind changes in reimbursement that increasingly include population approaches such as capitation, bundled payments, and care management fees. We describe a population health-based physician compensation plan developed for two departmental family medicine faculty groups (residency teaching clinic faculty and community clinic faculty) along with outcomes before and after the plan's implementation.

An observational study was conducted. A pre-post email survey assessed satisfaction with the plan, salary, and salary equity. Physician retention, panel size, and relative value unit (RVU) productivity metrics also were assessed before and after the plan's implementation.

Before implementation of the new plan, 18% of residency faculty and 33% of community faculty were satisfied or very satisfied with compensation structure. After implementation, those numbers rose to 47% for residency physicians and 74% for community physicians. Satisfaction with the amount of compensation also rose from 33% to 68% for residency faculty and from 26% to 87% for community faculty. For both groups, panel size per clinical full-time equivalent increased, and RVUs moved closer to national benchmarks. RVUs decreased for residency faculty and increased for community faculty.

Aligning a compensation plan with population health delivery by moving rewards away from RVU productivity and toward panel management resulted in improved physician satisfaction and retention, as well as larger panel sizes. RVU changes were less predictable. Physician compensation is an important component of care model redesign that emphasizes population health.