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December 16, 2020

Helping physicians understand productivity-based compensation

Today’s graduating physicians are more likely than ever before to seek employment in a hospital or large organization than in a private practice.

Avoiding the details of the business side of medicine is one of the main reasons some doctors prefer employment. Ironically, though, today’s employment contracts often include productivity compensation components that require physicians to pay at least some attention to business details.

Some physicians instinctively shy away from such contracts altogether, making it harder to attract the right providers for an open position. And they may do so without realizing that productivity-based compensation may allow them to earn a lot more money. So what can you do to help open physicians’ minds about productivity-based compensation, and build their trust?

"Taking the time to communicate in detail" is invaluable, says Satish Prabhu, M.D., owner and medical director of Rainbow Kids Clinic in Clarksville, Tennessee. Giving as much detail as possible about payment structures builds trust that makes it easier for physicians to ask questions and dig into the calculations in depth.

Seger Morris, D.O., says recruiters can help physicians educate themselves about productivity-based compensation.

Seger Morris, D.O., internal medicine program director and division chief, Mississippi internal medicine programs at Baptist Memorial Health Care in Oxford, Mississippi, agrees. "It’s up to the recruiter to break it down. I hate to say you need to dumb it down, but most physicians just don’t have a desire or know where to get the information."

Morris advises giving physician candidates a very explicit explanation of how your compensation plan works. "For example, if it’s an RVU plan, the recruiters should benchmark per-encounter RVUs for that specialty and region and equate that to the number of patients per day the physician will be asked to see. Residents are worried about volume, because they’re used to seeing five to seven patients in a half day. They hear stories about’such-and-such sees 40 per day’ and think ’I can’t do that.’" These kinds of stories cause physicians to distrust productivity compensation from the start. "But if the recruiter can break it down and show exactly how it will work," Morris says, physicians can be reassured.

Andrew Hajde, CMPE, assistant director of association content at the Medical Group Management Association (MGMA), agrees. "Physicians can be intimidated when they hear specific metrics, like ’you’ll have to see 25 patients per day.’ But we know that some patients will take 45 minutes and some only 15. It’s the recruiter’s job to break this down, so candidates can see what’s reasonable and not be scared away."

"In my experience, a physician is often handed a contract and encouraged to ask questions, instead of the recruiter taking the time to walk them through examples or explain how calculations are performed," says SamuelGerhardt, D.O., MBA, chief resident of Methodist Hospital in Henderson, Kentucky. "A staff member who has a solid understanding of the employer’s compensation strategy should sit down with the physician to explain the contract and the implications for pay in clear terms, rather than rely on the physician or the physician’s advisers to explain it for them."

Sometimes, physicians’ fears and skepticism are a result of not understanding enough about who a recruiter works for. Transparency about that is key. In-house recruiters should be clear that they work directly for the potential employer, and try to provide actual data about how real physicians in your organization are making their productivity goals.

Recruiters can help physicians educate themselves and build trust by recommending books, websites, and benchmarking tools. Adds Morris: "Recruiters can say, ’I recommend you compare your options, and here are some resources.’ Point them in the right direction to do their own homework.”

Read PracticeLink articles by Laurie Morgan


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