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New Physician Pay Models Must Reward Quality, Outcomes

John Commins, for HealthLeaders Media, January 27, 2014

Until recently most physician compensation models focused on straight salary guarantees or pure productivity-based models. Those trends are falling by the wayside.

Physician compensation models are changing and evolving in practices and hospitals across the nation as providers transition away from fee-for-service reimbursements and toward value-based care and population health.

What's it going to take to make these models work?

Kristian Brokaw, a manager with the PwC's Human Resource Services practice, says the key constants for any physician compensation model include a focus on quality outcomes and building a sense of "citizenship" within the practice.

"Physician compensation is complicated and every changing. I realize that is a blanket statement but it really goes to the simple fact that these models need to be updated and changed every one, two or three years," Brokaw said at a PwC webinar this month.

Until recently most physician compensation models focused on straight salary guarantees or pure productivity-based models.

"Those tend to be going by the wayside," he says. "What we see now are more physician models that are designed to try to do everything. They are taking too many behaviors into account. At that point we get to the law of diminishing return. Because if there are 20 or 30 different metrics, that is way too much and there is nothing for physicians to truly put their focus on."

"Specifically, today's comp models are really designed for three key elements; first, to drive behaviors; second we need to build a culture; finally we need to ensure we are not just market-competitive. We want to be leaders in the market and attracting top talent."

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