Physician Compensation Incentives Shifting

“I believe there will always be productivity measures [for incentives]; however, there will continue to be a growing use of quality and patient satisfaction scores as incentives in compensation models,” says Alan Kaplan, MD, vice president and CMO at Iowa Health System in Des Moines. With annual revenues of $2.3 billion, Iowa Health System is the sixth-largest nondenominational health system in the United States.

Additionally, 47% of survey respondents are incentivizing physicians for participation in administrative duties, and 23% are doing so for chart completion.

“These days, physician leadership, particularly in integrated systems and hospitals trying to integrate, is a key to accomplishing organizational objectives. You need their leadership and partnership,” says Anderson.

Physicians are not only being incentivized to participate in administrative time, for nearly half of survey respondents it is part of the overall compensation package: 47% count administrative time as a separate pay rate or bonus, while 48% of healthcare leaders don’t factor this time into the compensation model but still expect physician participation.

“We are finding more frequently that we [administrators] need physicians to participate in administrative discussions because they help us drive our goals to meet the future demands of healthcare reform,” says Limbocker.

He notes that prior to the demands brought about by healthcare reform, hospitals used perhaps 2%–3% of a physician’s time to assist with administrative discussions, something they wouldn’t have incentivized.