Operations: Dancing With the Stars

Highly productive physicians - the ones who see more patients, bring in more cash, and rack up more work relative value units (RVUs) than their colleagues - can be a blessing to your bottom line. However, ultra-high achievers can also often be a bit of a bother to a practice’s other physicians. Hyper-production can even pose a danger to medical quality and patient satisfaction.

Administrators and consultants agree that keeping high performers in check is just as important - and can be just as tricky - as getting a practice’s lower performers to increase their productivity.

“A physician can work harder and produce more than everyone else but not meet expectations for things like patient service, timeliness, resource utilization, teamwork, and other practice goals,” says Deborah Walker Keegan, a compensation specialist with Boehm Walker Associates in Surfside, Calif.

Sometimes the physicians who are ringing up the most charges or bringing in the most collections cherry-pick to nab new patients, hog lucrative procedures, or actively pursue patients with higher-paying insurance. Or they may be working longer days, causing staff overtime to spike.

Of course, if your practice has a high producer on board he or she may simply be a very efficient practitioner whose outstanding clinical and time-management skills are matched only by a sterling bedside manner that pleases patients and referring physicians alike.

Either way, high performers - those who truly outpace their colleagues on key measures including production, volume, collections, and other benchmarks - can also be those most disenchanted about how their practice divides its revenues and expenses.

Restless physician syndrome

Perhaps nothing influences your perception of your own worth more than knowing you work harder and bring in more cash than your colleagues, says Greg Mertz, president and CEO of the Horizon Group, a Virginia Beach, Va.-based practice management consulting firm.

“The high producers figure that since they put more on the books for the practice, they ought to get more in return, and some might even argue that their overhead costs per incremental dollar should go down,” says Mertz. “Pretty soon, everybody’s unhappy.” 

Over the years, Lucien Roberts, administrator for Richmond, Va.-based Neurological Associates, has seen the good and bad times that can result when one or two physicians outshine the rest.

“Physicians can work just as hard but may be not as smart as each other - people aren’t all wired the same way,” says Roberts. “As dollars get tighter, the old Three Musketeers’ ‘one-for-all-and-all-for-one’ mindset of compensation and reward starts to go away.”

Roberts says her practice recently abandoned an equal-share compensation plan after more than three decades of using that model. The first change the practice made was to base 20 percent of each physician’s earnings on personal production. But soon the practice upped its production bonus to 50 percent of salary. Basing production on physician work RVUs rather than collections or patient volume can help even out the salary disparities that can arise when physicians have different payer mixes or areas of subspecialization, says Roberts.

But “eat-what-you-kill” 100 percent production-based compensation systems tend to diminish group practice cohesiveness and overemphasize internal competition, says Keegan. To compromise, many groups are adopting plans that provide a base salary to keep lower producers in business while also giving incentive bonuses to encourage everyone to ratchet up the level of effort.

Formulas for splitting practice revenues and costs are growing more complex partly because of a growing diversity of needs among physicians. Younger physicians want a life outside the office while older physicians want to wind down, and women physicians may seek more flexible schedules for child-raising.

“These plans are emerging because money is tight, and physicians want to be rewarded for working harder and being more efficient,” Keegan opines.

“Compensation plans are one of those things that whatever you’ve got, the perception is that there’s a better way to do it,” adds Mertz. “Maybe no one’s ever happy with their compensation plan.”

What they do right

There are lessons to be learned by examining why high performers do so well, says Mertz. They may be more adept at the following tasks:

• Customer service. Some physicians are so skilled at personal communication that patients demand to see them even if it means waiting longer.

• Front-desk relations. Physicians who don’t growl whenever a scheduler asks them to work in an extra patient will be asked to see unexpected patients more often, increasing their patient base.

• Hands-off schedule management. Physicians who refrain from micromanaging their schedules often end up seeing more patients by avoiding the black holes or snarls in their schedules that can result if patients don’t show up or if they cancel at the last minute.

• Training staff. Physicians who take time to train clinical staff to always have the right tools, the proper supplies, or the necessary forms handy tend to stay on schedule more often and are consequently able to work in extra patients.

• Habitual huddling. Some physicians have learned that a five-minute meeting each morning with their nurses, medical assistants, and front-desk staff can help their team better prepare for patients with special needs, allowing time to squeeze in more patients at the end of the day.

• Efficient dictation and documentation. Inefficient documentation can waste time that could be spent seeing more patients. It can also lead to under-coding, over-coding, or denied claims.

• Empowering staff. Efficient physicians rely on staff members who feel empowered to knock on exam room doors when a visit runs long or take other steps to keep the physician on time.

“I don’t see many lazy physicians,” says Mertz. “The highly productive physician is someone who has found his formula, while the low producer either doesn’t know how or won’t permit others to coach him.”

Timothy Boden, manager of Northwest Mississippi Kidney Center in Greenville, says the problem is that the days of a practice’s senior physician closely mentoring - or even goading - young physicians into efficient work habits and higher productivity are over. “There’s less time for collegiality and mentoring,” he explains. “Now it’s every man for himself, sink or swim.”

Production that doesn’t pay

Physicians who consistently trail the pack in terms of production and volume may actually do more work than what appears on their financial and volume spreadsheets.

Sometimes practices retain by design physicians who produce different levels of output, Keegan says: “The practice might want to have a Dr. Finance, a Dr. IT, and a Dr. Community Relations to position itself for long-term goals like expansion or dealing with new competition.”

Bruce Johnson, an attorney with the Denver-based law firm Faegre and Benson, warns physicians against leaping into redesigning their compensation plans without considering the other factors besides collections that bring value to a practice.

“Some doctors have very average production but are stellar in terms of referring physician relationships and in terms of building the business,” says Johnson, who recently coauthored a book with Keegan on physician compensation. “That’s a different form of production, and a lot of people don’t have those skills.”

Some practices try to recognize and reward other intangibles, including:

• Commuting to work from satellite offices;

• Serving as the rainmaker for new services;

• Taking part in outreach activities to treat patients with less lucrative payers;

• Providing administrative leadership;

• Hitting patient satisfaction targets; and

• Serving as liaison between hospitals or other partners.

“You might want to recognize - give a stipend or incentive - to the ones who go out there and try to make things happen even if it can’t be measured in RVUs,” suggests Keegan.

Smoothing the bumps

Sometimes one physician will earn more than his practice partners because he’s figured out a profitable way to subspecialize within his specialty, adds Boden. He says an orthopedic practice he once managed had on staff one physician who handled lucrative arthroscopies and other sports medicine procedures for privately insured patients while his two partners felt stuck dealing with lower-paying but complex knee and hip replacements for Medicare patients. The physician bringing in more revenue resisted moving from the practice’s 100 percent productivity plan to one that combined a base salary with an RVU bonus.

“The sports guy earning the high pay didn’t realize the advantage he got by being part of the group’s brand and having someone to share his call,” says Boden.

Roberts adds that high-earning physicians may also need reminding that working in a group setting allows them to hand less lucrative cases off to their partners: “They have to understand that without the other partners, they might have to take a wider range of cases instead of just the ones that are the most interesting or bring in the most RVUs or dollars.”

Feelings of being treated unfairly often boil to the surface when it comes to splitting up practice costs. Boden, who has worked in several single- and multi-specialty medical groups, says a multi-pronged approach to expense sharing can help smooth ruffled feathers, especially when physicians do different work that may affect their productivity.

Boden recommends taking the following into account when splitting operating costs:

• Direct expenses - “Charge back to the physician the things that are under his or her direct control: the higher level of medical assistant he wants to use, the special equipment, the extra CME [continuing medical education] he needs to keep those skills up,” advises Boden.

• Fixed expenses - “About 80 percent of overhead costs are fixed anyway, so just equally split rent, utilities, telephones, maintenance, and capital investments like real estate and IT.”

• Variable expenses - “It’s easy to set up responsibility centers and expense out payroll …. according to each physician’s production,” says Boden. In other words, a physician who produces 30 percent of a practice’s collections or RVUs would shoulder 30 percent of the practice’s variable expenses.

Brian McCartie, regional vice president of business development for the physician recruitment firm Cejka & Co. in St. Louis, suggests viewing monthly reports that track each physician’s patient volume, charges, tests, surgeries, and procedures. “When there is unrest in a medical group about compensation, the first thing to do is evaluate if they really are being underpaid, and then you can look to see if they really are getting overcharged,” says McCartie. He recommends identifying high-performing physicians with industry and internal practice benchmarks and also noting how much time those physicians actually work per week and per year.

Johnson takes a simpler approach. “A subjective but pretty reliable way to spot the high performer is to just look around,” he says. “The extra activity you see will give you a good idea of who that is.”

How much is too much?

Physicians who are extraordinarily productive may be exhibiting an intense work style that can hurt patient relations and perhaps patient safety as well as violate coding regulations, says John-Henry Pfifferling, director of the Center for Professional Well-Being.

“I’m working with a two-partner dermatology practice where each physician was seeing up to 100 patients a day, and it was ruining their lives,” says Pfifferling, whose Durham, N.C., firm specializes in counseling physicians. “The staff fed that behavior like people who enable alcoholics, because keeping the production machine going meant their salaries were much higher than the market rate.”

To discourage such overwork, some practices limit total compensation. In doing so, “the group makes the decision that they don’t want their doctors burning out; they don’t want them to become too competitive,” says Johnson.

“Production limits are a practice’s way of saying, ‘We have other missions besides just maxing clinical production to infinity,’” adds Keegan.

Other medical practices try to discourage chronic overachievers by enforcing time-off policies and insisting that physicians travel to at least one out-of-town CME event per year. Posting the practice’s administrator as a watchdog helps too, says Roberts: “We should be the ones in the practice who really, really don’t care which individual earns more. We should be for what’s in the entire practice’s interest.”

Ultimately, a high performer’s real value should not be measured solely in terms of collections. Greater value often lies in their willingness to mentor new physicians, coach lower performers, and serve as rainmakers to bring in new business, Johnson says. “Actually, a medical group with a lot of average performers and maybe a part-timer or a lower-producing physician in the mix might get by just fine without an excessively high producer,” he adds.

In other words, a physician’s value to a medical practice isn’t entirely based on dollars. Common sense must be taken into consideration as well.

Bob Redling has written on practice management topics for more than 10 years. He has served as the practice management editor for Physicians Practice, Web content editor and senior writer for the Medical Group Management Association, speechwriter for the American Academy of Family Physicians, and government affairs reporter for United Press International. His work has been published in Physicians Practice and MGMA Connexion. He can be reached via editor@physicianspractice.com.
This article originally appeared in the January 2007 issue of Physicians Practice.