Productivity-Based Compensation Plans
Aligning Actions with Revenue
Front Life Emergency Care Specialists, Los Angeles, CaliforniaThe Opportunity Front
Line Emergency Care Specialists (FLECS), like most hospital-based practices, needed to accomplish more with less and saw productivity-based compensation (PBC) as one potential way to accomplish this. Some members of the group were skeptical that PBC would destroy the culture of mutual respect and camaraderie the group had enjoyed for more than 20 years while others had no idea how PBC worked or its pros and cons. The group needed additional information to be able to make an informed decision.The Action
FLECS retained Dr. Hellstern to analyze and benchmark the group’s performance, to estimate their potential upside with PBC, and to present an overview of PBC along with some specific recommendations for FLECS if it should decide to implement such a program. FLECS chose to embrace PBC, and Dr. Hellstern worked with their billing company to put the program in place.The Value
Productivity-based compensation enabled FLECS to:
- increase average productivity and revenue per visit
- attract more productive providers
- retain senior physicians
Medical practice management data clearly show that both productivity and patient service satisfaction are strongly influenced by provider compensation methodology. Fixed salary, hourly and productivity-based bonuses of less than 20% of total compensation consistently underperform compensation systems that are primarily productivity-based.
Finding the Balance
State of the art productivity-based compensation systems balance the volume of services delivered per unit time (RVUs/hour of staffing cost) with best practice compliance and statistically valid patient satisfaction scores.
The Value of Accuracy
Data accuracy is essential to any productivity-based compensation plan, but the greatest challenge is provider education and enrollment in the benefits of working in a productivity-based system. Hospital Practice Consultants has guided more than 100 practices in making this all important transition to a new level of practice excellence.
"Ron’s experience with productivity-based compensation systems went a long way toward reassuring our members that they had a complete picture of how such a system would work for them before deciding to do it. The iterative system design approach made us comfortable that we were in control and no one felt pushed to do anything they didn’t fully understand in advance. At the end of the day the new system is simple to use and has paid big dividends in increased attention to documentation and charge capture as well as our overall productivity.”
—Art Pelayo, MD, President
Front Line Emergency Care Specialists