Preparing to Change Physician Compensation: 10 Practical Steps

Why Change? Preparing to Change Physician Compensation: 10 Practical Steps

There is an adage that describes three physician compensation plans – “the plan you were on, the plan you are on, and the plan you will be on.” The point is that physician compensation is always under pressure due to constant changes in organizational dynamics and environmental conditions. While many physicians and organizations resist changing compensation plans, the need to do so often becomes inevitable for a variety of reasons.

Today the expected shift from volume to value in reimbursement is driving many organizations to evaluate and reset their compensation programs. However, there are many reasons that can propel change, including, but not limited to…

• Implementation of new services,
arrangements or relationships
• Better align compensation with market rates
• Respond to reductions (or just changes) in
reimbursement
• Addition of new physicians or practice
acquisitions
• Address compliance concerns (Stark, AKS, etc.)
• Improve clinical productivity or quality
• Minimize negative financial performance
• Redirect physician behaviors or conflicts
• Promote better recruitment and retention
• Support organizational missions and strategies

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