As the environment surrounding healthcare constantly changes, you are tasked with creating a sustainable, fair physician compensation program that will both benefit your organization and serve as a valuable recruitment tool. Now that more doctors are opting for the secure confines of hospitals and other healthcare facilities as opposed to private practice, you’d like to feel confident in your compensation model and your practice management techniques. A lack of due diligence here could cause your organization to suffer a dearth of quality employees.
Unfortunately, many healthcare professionals may still believe that effective compensation programs are all in the employment contract, and that this document is all that is needed to ensure a profitable enterprise. Instead, your emphasis should be on practice management, top quality indicators of physician compensation programs and other financial factors. You can’t manage people through a contract – it takes a more hands-on, dedicated approach.
As a leader of a healthcare provider, you’ve spent years honing your skills. At Clark Schaefer Hackett, we’ve spent decades in the industry working with small, medium and large healthcare organizations to improve their compensation programs and effectively manage their practices. As you are aware, working with the right advisors can make the entire process move much more smoothly.
Analyze data to identify weaknesses
The trick to a successful compensation program is using it to its full potential. Many healthcare providers don’t fully understand the true benefits of a competitive, sustainable model, such as its ability to improve practice management. A custom compensation program is required in order for maximum effectiveness. Before reaching that point, however, look inward and acquire the intelligence needed to make accurate decisions about the structure of your compensation program.
The crucial first step toward creating an effective solution is to locate all existing weakness within your organization. Problems can both jeopardize the implementation of a compensation program and prevent flexibility in the face of new data and trends.
In order to analyze potential problems, take a look at several key areas. These include:
- Patient volume for each physician
- Quality of patient visits
- Amount of new patients entering the organization
- Ability of physicians to excel in leadership roles
- Attendance of physicians in meetings
- Number of hours physicians are in contact with patients
Once this valuable data has been attained, you can then begin to strategize potential solutions to any problems that may appear. A benchmarking system can measure volume and quality information, which will help you make educated decisions. Then, you can move forward to identify a compensation program that is sustainable and beneficial for your healthcare organization.
Take full advantage of your compensation program
Not all physicians are created equal. With that in mind, create a compensation program that takes this factor into account. It is better to hire the best employees – not average ones. In some cases, this requires a reassessment of current staff members and the replacement of existing physicians. Once this is complete, you can create a program that will support your organization for years to come.
According to the Healthcare Financial Management Association, this can be achieved by creating comprehensive financial projections and defining thresholds for physician investment. These two elements will provide you a guideline to move forward. When crafting a new program, keep in mind that there are two main types: one that uses productivity-based metrics, and one that uses non-productivity- and value-based data. The former often uses relative value units, or RVUs, to gauge physician involvement. For some, it is best to create a compensation program that merges these two models. Starting out as primarily productivity based, and then incorporating more non-productivity metrics over time, can lead to more growth, stable finances and better fiscal management.
Use top quality indicators to ensure flexibility
The best compensation programs are the ones that are both flexible and adaptable. A number of factors can encourage change, such as improving physician performance and shifting economic conditions. In order to judge when it is the best time to make a change, pay close attention to top quality indicators of compensation modeling.
These include, but aren’t limited to:
- Patient satisfaction
- Wait time
- Lag time
- No shows
- Coding compliance
- Physician leadership
In addition to these indicators, other administrative duties can also help provide the information you need to develop an effective compensation program. For example, take the time to meet with administrators. Also, assess medical and financial operations and determine where any opportunities exist to enhance revenue. Better yet, build trust with your physicians to make the implementation process smoother.
Expert advice will provide relief
Without a firm grasp on the local market, as well as your limitations and capabilities, a physician compensation program could miss the mark. Professionals understand these nuances, and a trusted advisor can provide crucial guidance and advice that will avoid common problems. Experts can assist with fiscal needs, business solutions and provide assurances that the finances are on the right track.
When you’re looking to create a new, sustainable physician compensation program, make sure you engage with a dedicated team of experts with experience in the healthcare industry. Clark Schaefer Hackett works with clients on a regular basis to support administrators, office managers, CFOs and CEOs in their quest for more efficient compensation programs. We can help create a custom compensation program for you.
To assist you during this time, we offer a broad suite of services designed specifically for healthcare practices, such as expert advice regarding your tax burden, small-business solutions, bookkeeping and payroll counsel and other personalized expertise. Above all else, we are standing by with a dedicated team ready to work with you as you develop a quality compensation program for your healthcare organization.