Adding Value to Physician Compensation Strategy: Gaining Physician Buy-In

Contemplating adding value to your physician compensation plans? Physician involvement in the planning process is crucial. The two essential elements of that involvement: physician education and a collaborative process.

Physician Education

“This is my compensation. Why are you tinkering with it?”  

Those were some of the first words uttered by a physician leader during a recent meeting with administrators and physicians. Healthcare Strategy Group sees similar concerns each and every time we embark on new compensation planning projects, underscoring the need to provide proactive education to your physicians. Physicians and advanced practitioners must understand the new reimbursement programs driving the much-discussed “transition to value,” such as:

• The Merit-Based Incentive Payment System (MIPS) announced as part of the SGR fix
• Hospital-based programs such as Value-Based Purchasing and penalties for readmissions and hospital-acquired conditions
• Voluntary Alternative Payment Models (APMs), such as Value-Based Care Organizations (ACOs) and Medicare Shared Savings Programs (MSSPs)
• Bundled Payments

Use emails, webinars, newsletters, meetings, and informal conversations to bring your providers up to speed with the changing reimbursement and compensation landscape. Explaining these programs may seem daunting, but will help your physicians realize the transition to value is no longer an abstract, far-off concept. And they will also understand the importance of changing their own compensation plans.

Collaborative Process

Keep your physicians involved in the plan design process by forming a compensation committee that includes physicians respected and trusted by their peers. To drive implementation of the final plan, these physicians must address their colleagues’ concerns and gather support. Picking the right physicians is therefore very important!   During the planning process, we advocate for and use an approach that encourages the compensation committee to take ownership of the plan design. For each component of the plan, we present a recommended approach based on best practices and organizational realities. We then present alternative approaches and outline the advantages and disadvantages of each. Together, the committee builds the plan by selecting the best approach for the organization in three key areas:

• Physician leadership: How will you encourage key physicians to lead quality improvement programs or other important initiatives?
• Quality incentives: How will you measure and pay for quality? What proportion of compensation should be attributed to quality and how should this be phased in?
• Team-based approach: How will you encourage physicians to work together to manage populations that include shared patients? How will you develop a group culture?

By answering these questions through a structured process that includes the right physician leaders, you will develop a compensation plan that is politically feasible to implement and prepares your organization for success under value-based reimbursement.