|
Simply put, compensation modeling determines what is fair and feasible for physician salaries, benefits and bonuses. The main objective of a physician employment compensation plan is to assure physician compensation and productivity mirror industry standards. Numerous considerations and details go into the strategic planning of a physician compensation program, and it can be a complicated process that entails formulas and distribution arrangements. However, it is a system you should employ if your practice is to attract and retain top physicians.
Basically, designing a compensation program involves …
- Selecting the appropriate competitive market(s) for benchmark comparisons.
- Determining the desired mix between base pay, incentive/bonus awards, and benefits.
- Defining the performance criteria that will be used for base-pay adjustments and incentive/bonus awards.
Besides staying competitive in the marketplace, other major objectives of compensation programs are to …
- Offer physicians a base salary that will provide income security.
- Establish financial incentives to promote physician productivity and efficiency.
- Establish an objective methodology for calculating physician compensation.
- Design a plan that is easily administered.
- Provide a mechanism for physician performance measurement and feedback.
- Distribute a periodic bonus to physicians.
- Promote physicians’ long-term commitment to the practice or clinic.
Selecting an appropriate compensation “tool” depends on the type of organization you have: a private group practice with partners and physician employees; an HMO with employed physicians; an IPA contracted to provide services to a managed care organization; or, a hospital-based network of primary care physicians.
While the most prevalent compensation programs are based primarily on productivity, there are various models you can draw on when designing your compensation system. However, be aware that all compensation plans have drawbacks. Most run the risk of being too complicated, and all of them require a lot of up-front research, discussion, planning, and teamwork.
The challenge is devising a compensation plan that is not only acceptable to all of your physicians, but is also economically feasible for the whole organization. In other words, it has to be affordable. Determining this requires a detailed and realistic accounting of your current financial status, as well as projections of future income. As management consultants and accountants, BPCD&S can advise you on the best compensation plan for your group, and then help you implement and manage it.
|
