The most common way of determining medical directorship compensation is to develop fair market value (FMV) benchmarks for the agreement in question. Benchmark data typically includes publicly available survey results for the specific specialty and generally are at or below the compensation level paid to clinicians for equivalent work effort.
In some situations, there may not be enough publicly available data to develop a specialty-specific benchmark; therefore, it is possible to extrapolate the available data to develop a valid benchmark.
In these cases, it is important to rely on an independent, third-party, industry expert in hospital/physician relationships who has knowledge of the healthcare industry and laws to develop a benchmark that is appropriate and indisputable.
Once an appropriate benchmark is determined, a range of appropriate payments can be established based on the benchmark. In general, a proposed payment should satisfy FMV if the payment is within the range of the identified benchmark, which is generally considered to be less than the 75th percentile of the survey data. Special circumstances might exist at the hospital or within the specific market that might warrant a payment that is higher than the benchmark.
Remember that medical directorship agreements must adhere to the anti-kickback statute, Stark laws, and §501(c)(3) of the Internal Revenue Code.
Physicians at Greensboro, NC-baed Carolina Pediatrics are part of a movement toward electronic health records. Members of the movement say such systems will reduce costs, improve efficiency, and reduce medical errors. But change has been slow in coming because some physicians, particularly those in small practices, say the systems are too expensive.
Key elements of Medicare's Physician Quality Reporting Initiative must be improved so that physicians can successfully participate and use the information to increase the quality of patient care, according to an American Medical Association's survey of physicians who participated in the PQRI during its first year of implementation. More than six out of 10 physicians surveyed rated the program difficult, and only 22% were able to download the PQRI feedback report for their practice.
Pennsylvania Gov. Ed Rendell is driving physicians out of the state, according to this physician-written opinion piece in the Wall Street Journal. Rendell wants to create a universal program for the state, but to fund it he plans on pulling money from M-Care, a supplemental malpractice insurance program that pays malpractice claims that exceed the required basic liability coverage.
Manoj Jain, MD, writing in the Washington Post, says doctors should avoid talking politics with patients. “For one, I'm in an authoritative position: When I talk about antibiotics, my patients listen and usually do as I advise. As a result, they might give inappropriate weight to my political pronouncements. For another, I fear that no matter how carefully I tread in these conversations, a disagreement could leave a dead zone in our relationship.”
Physicians in group practice are concerned about profitability. Indeed, their compensation formulas focus heavily—often totally—on producing revenue. This focus encourages the current work effort to offset declining reimbursement patterns and increasing expense outlays. To a large extent, cash is king.
But that's not why most doctors entered the profession. They want to support themselves and their families well, of course, but they also care deeply about that amorphous factor, quality.
Quality factors
Quality is an important factor for doctors in several areas, such as:
Clinical excellence (e.g., when confronting difficult diagnostic problems)
Personal characteristics (e.g., whether in handling patients and staff members or in simply being a compatible partner)
Commitment level (e.g., the willingness to assume full or even greater responsibilities for the benefit of the group)
Quality features like these affect a group's profitability as well but, unfortunately, they are more remote and longer term than producing current revenue.
Your group's legal documents likely make no more than casual reference to quality standards. Still, it's important to encourage standards and, more importantly, to discourage your members from violating them. Traditional protests such as, “No one can tell me how to do my work,” simply don't cut it any more. A partner's shortcomings or weaknesses cannot go unchecked indefinitely.
Performance evaluation
One way to handle this concern is to subject your physician-partners to the same type of test that, ideally, your office manager uses for your nonphysician staff: the annual performance evaluation.
Since critiquing colleagues and being reviewed by them may rankle doctors, establishing the idea calls for careful leadership. It is best to have such a program in place before a serious partner problem crops up, but sometimes groups adopt it almost specifically (although unstated) because of one member's bad characteristics.
A good physician-leader or executive committee might start by building up the partners' willingness to undertake the process. Consider installing a performance evaluation routine for one or more newly or soon-to-be hired doctors as a good first step.
Those younger physicians probably encountered enough evaluations in their training to be comfortable with—or at least accepting of—performance reviews. Even at the young-doctor level, involve all your members by seeking their input into setting up performance reviews. Rather than simply presenting a review format, ask them to consider which factors are most important for further group success. People respond better to a new idea when they are involved in deciding how it will work.
Group input
After getting preliminary group approval, distribute a questionnaire listing different performance attributes, asking your members to grade them as to importance. For example, the criteria might include purely clinical abilities, personality features, and levels of personal commitment to group success.
Upon receiving the replies, you or an outside source can draft a proposed evaluation form based on what you and your partners deem important standards. Present it to your partners for approval and also recommend a format for receiving, reviewing, distilling, and reporting the results.
The process should proceed to a private meeting between each evaluated doctor and the group's leader. With careful leadership in guiding your partners to approve the process, you should be able to handle quality issues, as well as immediate profitability.
Leif Beck advises on top-level group practice matters. Contact him at Leif C. Beck Consulting at 610/355-0797 or e-mail at leifcbeck@comcast.net. This column originally ran in the October issue of The Doctor's Office, a HealthLeaders Media publication.
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