MGMA: Physician Compensation Increasingly Based on Quality Measures
John Commins, for Health Leaders Media , June 14, 2013
Primary care physicians have 3% of their total compensation based on quality measures, but doctors will increasingly be tied to these metrics as reimbursement aligns more closely with quality and cost measures, Medical Group Management Association data suggests.
Quality measures are emerging as components in physicians' compensation, a trend is expected to grow as value-based reimbursements gradually supplant fee-for-service, volume-based models, a new survey from the Medical Group Management Association shows.
The Physician Compensation and Production Survey: 2013 Report Based on 2012 Data examined data on more than 60,100 physicians, and found that primary care physicians and specialists reported that 3% and 2%, respectively, of their total compensation was based on quality measures.
Although the percentages are small, MGMA's Todd Evenson says physician compensation will increasingly be tied to these metrics as reimbursement aligns more closely with quality and cost measures.
"Really what we are seeing is the very front end for many organizations as they start to address under the Affordable Care Act and the commercial environment value based reimbursement. Ultimately those components of quality and satisfaction will become an ever-emerging component of reimbursement," says Evenson, MGMA's director of data solutions."
Actually, Evenson says the survey is low-balling the extent of quality measures in compensation packages for some healthcare organizations.
"Clearly there are some groups that are much more dynamic in the way they have been able to apply that. It's not uncommon in the industry and in many of the large organizations or health systems for that number to be somewhat higher. I have talked to many colleagues in the industry and figures anywhere from 10% to 30% aren't that uncommon for those larger institutions," Evenson says.
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"As we look toward large healthcare institutions, the likelihood that they have decoupled compensation from collections is very high. And as a function of that in order to promote the behaviors around quality and satisfaction that they would like to see they want to incentivize their physicians in the appropriate ways to compensate them for those behaviors or activities. But overall, when we are looking at smaller organizations or medium-sized organizations then it is much more likely that there is that direct linkage."
Evenson says it's not necessarily a bad idea for some healthcare organizations to wait and watch before launching a quality component in their compensation packages.
 Physician/Specialists Compensation, 2008-2012 (PDF) |
"You don't want to be on the cutting edge. You want to be just behind the cutting edge as it relates to how you change your compensation strategies," he says. "It wouldn't be very effective if you were being paid 90% fee-for-service and paid 50% on quality to your teams of providers. The math wouldn't work in your favor."
Physician Compensation
The report also reaffirmed that median compensation for physicians fluctuated by specialty. Primary care physicians reported $216,462 in median compensation in 2012, and specialists reported $388,199 in median compensation. Evenson says the considerable gap in compensation could prove difficult to overcome, even with a concerted push to get more medical school students to take up primary care.
"The last data I had a chance to look at as I looked towards family practitioners just coming out of residency was something like 40% had over $200,000 in debt. And when we see that coupled with the median compensation for a family practitioner this year was right around that $205,000, it ends up being where there is definitely a constraint that is worth noting," Evenson says.
"We and others in the health industry understand the importance of this. The demand for primary care physicians is going to continue to increase but we have seen that kind of differential between primary care and specialty care compensation. We've even seen a number of advocacy efforts from a number of organizations (to improve primary care compensation) and that continues to evolve, but unfortunately it has remained at a static pace as a ratio of one related to the other. We did see some narrowing of that gap over the last few years, but I have seen that stagnate."
Evenson says the report verifies that healthcare organizations are moving toward an increasing reliance on physicians' assistants and nurse practitioners to make up for the shortage of primary care physicians. As a result, these highly specialized nurses are enjoying significant compensation hikes.
Over the past five years nurse practitioners' compensation has increased, on average about 13.4%, to the median of $92,717 in 2012. For physicians' assistances in the surgical suite that compensation increased by 9.6% over five years to a median of $112,689. For physicians' assistants in the primary care setting the compensation increased 10.4%, with a media of $96,834 in 2012, MGMA reported.
"When we look at their compensation this really underscores how the environment and the healthcare system is leveraging providers to the maximum of their license," Evenson says. "It shows how teams and organizations are dealing with that primary care shortage. They are looking towards the nurse practitioner and their role in the organization. Even if you're in a gastroenterology practice they are leaving the scope work to the physicians and the follow up visits to the practitioners. They are leveraging them to try to meet that demand."
John Commins is a senior editor with HealthLeaders Media.
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