Physician Compensation Embraces Satisfaction, Quality Metrics

How soon will physicians at your practice have to embrace compensation based on quality improvement over volume? If you believe the latest survey from ECG Management Consultants based on nearly 21,000 healthcare providers interviewed in the spring, the answer might be pretty darn soon.

Physician compensation plans are already beginning to reflect quality and patient satisfaction scores key performance indicators, according to the 13th annual Provider Compensation, Production, and Benefits Surveys from ECG Management Consultants, Inc.

According to the survey:

• Compensation for primary-care physicians decreased slightly by 0.4 percent, while specialists saw a 3.4 percent gain over 2012;

• Compensation for primary-care physicians increased by 1.4 percent over 2012 medians in terms of work relative value unit (RVU) production. This increase results from compensation remaining relatively flat on declining work RVU production of 2.1 percent, according to researchers; and

• While the majority of organizations (91 percent) continue to utilize physician production to determine physician compensation, nonproduction-based metrics such as quality and patient satisfaction are being adopted rapidly, at 63 percent and 47 percent of organizations, respectively.

Researchers say Medicare reimbursement "that encourage better quality, increased patient satisfaction, and efficiency" have led to many healthcare organizations to modify physician compensation plans to incorporate these metrics.

"The main goal of Medicare is really sustainability," Jim Lord, a principal at the healthcare consulting firm, told Physicians Practice. "How they are going to get there is to encourage and improve care management, so that's the idea of getting people healthy versus treating people when they are sick."

In other words, if you treat Medicare patients, you can expect more focus on whether patients actually improved overall, and were treated as efficiently as possible.

"We simply have, in the past, paid people for doing more," said Lord.

The group's second, pediatrics-based survey, based on responses from 4,500 providers at 32 children's organizations across the country, revealed similar trends toward value-based compensation. Among them:

• Pediatric organizations have modified their physician compensation plans to balance a combination of incentives focused mainly on productivity and quality;

•The overall percentage of compensation at risk increased dramatically, from 11.9 percent to 19.4 percent in 2013; and

•One-third of survey organizations have tied physician compensation to quality indicators, yet despite the significant increase in the prevalence of quality in compensation plans since the 2011 survey (when quality was utilized by just 17 percent of organizations), it represents only 1.8 percent of total compensation on average.

A physician's best move for adapting to the change? Embracing it.

"There might be some who would say 'I prefer to know everything I'm paid for and take a salary,'" says Lord. "But that's not really an option. The organizations, the hospitals, their own practices are getting paid on these metrics."