An incentive management plan for hospital-based physicians

Arthur D. Little, Inc., has developed an incentive management program for salaried, hospital-based physicians. The program is based on the tracking of physician productivity through the assignment of work units for both routine inpatient care and all medically performed tests and outpatient procedures. A monetary pool based on increases in the hospital's profitability over a base year is divided among physicians on the basis of their relative productivity throughout the year. Administratively assigned work units can be used to give physicians credit for activities which benefit the institution but which are not revenue producing. The system puts incentives in place for physicians to increase revenues while holding down costs. The main feature of the incentive system is a bonus pool, the size of which is based on hospital net income. A reporting application was developed that downloads data from the hospital's service bureau data-processing vendor, preprocesses the data through a C program, and produces reports through an extremely user-friendly, menu-driven, spreadsheet-based program.