Becker's Hospital Review

65 Executive Briefing: Physician Compensation The healthcare world cumulatively likes to say it is moving away from fee-for-service. However, Mr. Thomas says volumes will likely not go away for any type of reimbursement, hospitals and physicians both included. "All things being equal in quality, the doctor who sees more pa- tients is going to demand more pay," Mr. Thomas says. "You're still going to have a component of volume." Setting the "draw" for physicians Knowing that there is no "one-size-fits-all" model for physician compensation plans, hospitals can begin to tailor their plans for their specific needs. An essential starting point, according to Mr. Thomas, is defining what "performance" is and making that defini- tion both clear and consistent. For example, hospitals may want to compensate physicians based on how many emergency department visits their diabetic patients had in the past 90 days. Other common metrics include turnover, or time between surgeries, in the operating room, as well as metrics that measure the health of a large population. From there, hospitals will want to set the "draw" for physicians. Mr. Thomas suggests taking the median income for a physician specialty and put at least 25 to 40 percent of that benchmark on performance outcomes to drive real behavioral changes. "The in- centives need to be big," he says. However, hospitals have to focus on the metrics, not the dollar amounts, if they want to gain full buy-in from their physicians. If a pay-for-performance plan results in fewer dollars for a physi- cian due to quality metrics, Mr. Thomas says hospitals have to give physicians an opportunity to control their situation through another metric. Keeping physicians invested in their patient care, and the business of their care, is paramount. "Divorcing doctors from the economics of practice is not a good decision," Mr. Thomas says. "They should be accountable and have a stake in their practice. It's what they want." Keys to success: thoughtful planning and communication Value-based physician compensation can work well within hos- pitals and systems if the right mix of diligence, forethought and economics is used, according to Mr. Thomas. Most importantly, Mr. Thomas stresses that physician compen- sation plan negotiations are a journey. They require consistency, transparency and communication — everyone involved in the pro- cess has to understand exactly what the deal involves and how it works. Further, communication should be frequent, and feedback should operate in a continuous loop, especially if plans are rene- gotiated every two years. "You need to have an active dialogue about the compensation contracts and information with physicians on a regular basis," Mr. Thomas says. "There should be no surprises." What pay-for-performance means for hospital-physician relations Hospitals and health systems that have built up their physician base have likely increased their patient market share. Maintaining that market share requires hospitals leaders to make a concerted effort toward pay-for-performance models. An effective physician compensation model is crucial to success from a macro level, but it's also important to ensuring individu- al physicians are happy and that they are focusing on the right goals: high-quality patient care and positive outcomes. "Hospitals and physicians today both have significant incentive to provide high-quality care in the marketplace, and align them- selves to make the patient the prime customer," Mr. Thomas says. "Paying doctors in a meaningful way — to make a difference to- day — is going to require time and commitment." n "divorcing doctors from the economics of practice is not a good decision. They should be accountable and have a stake in their practice." — John R. Thomas, CEO, MedSynergies MedSynergies partners with healthcare organizations and physicians to coordinate care by providing an alignment strategy based on its MSIGHT solutions suite. Leveraging its knowledge and experience in physician practice operations and health system consulting, MedSynergies improves processes, optimizes technology and builds on trusted patient relationships, enabling hospitals and physician practices to offer quality health care. Founded in 1996, MedSynergies is privately held and headquartered in Irving, Texas. MedSynergies currently partners with hospitals and health networks and serves 9,300 providers and 56 specialties across the United States. For more information, please visit www.medsynergies.com/solution .

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