In the provider compensation space, we often think of cost of care in relation to the way our organizations are paid. Most of us rely heavily on volume and a little bit on quality and value, and our comp models reflect that. However, as we look towards the future of healthcare and the headlines coming across our laptop screens every day, there are other seismic shifts in the industry that we should be incorporating into our compensation models to reflect the modern approaches to care that are unfolding in real time. Four underrepresented levers that can – and should – be factored into each organization’s bespoke compensation model are: science and technology, consumer behavior, facility type, and payor methods.
Science & Technology
From 3D printing to robotic surgery to nanotechnology and MRNA (in which we are now all extremely well-versed), medical science and technology grows in leaps and bounds every year. With that development comes investment in expensive tools (the medical device industry alone is expected to be worth $603B next year)[1], machines, software programs, and medicines. The technology investment varies by organization and is driven by many factors, but the constant remains: these investments are made to optimize care, and the goal is to use them to their fullest potential.
The adoption of a new technology isn’t easy. Take surgical robots for example: they are high-ticket items, and at the outset, have a high cost to the individual surgeon as well. There is training and certification required, and robotic surgeries often take longer than open or laparoscopic procedures, at least while the surgeon is becoming facile with the tool. Yet this technology investment was made to differentiate both the facility and the surgeon in the market, and to provide exceptional care. If this is a true strategic or operational priority to help the surgeon get over that learning hump, it’s important to consider whether compensating for robotic surgery in some way (volume, efficiency, quality, or a blend) will convey the importance of this goal, offset any potential compensation loss the surgeon may be wary of otherwise, and encourage the surgeon to reach the desired level of aptitude and robotic surgical volume.
Consumer Behavior
With the arrival of person-centered care has come a call for physicians to transition from trusted expert to thoughtful partner on our healthcare journeys. Guidelines for doing so were developed by the American College of Physicians (ACP), and include the following four principles[2]:
- Treat patients and their families with respect and dignity.
- Include patients and families as active partners in care planning.
- Patients and families should play a role in reforming and improving delivery systems.
- Bring the patient voice into medical training and education.
Embracing patients as partners has shown marked increases in patient satisfaction scores and clinical outcomes[3]. What does the community want from their care and how could we design a compensation model that addresses those factors? From evening clinic hours to telehealth to lifestyle alterations rather than medical management, there are many ways providers can be compensated for calibrating their practice to account for consumer preferences.
Facility Type
Each facility type has its own clinical and administrative limitations and priorities. Academic medical centers are best suited and funded for highly specialized and complex care, while more routine care should be prioritized to take place in the community and lower-cost settings; multi-state regional providers may make service/specialty or administrative decisions on a corporate level; financial flexibility is often limited in rural and community hospitals. Understanding these nuances by facility type, applying them to compensation to ensure clinical work is optimized for the facility type, and clearly conveying these limitations and priorities to providers (with special attention given to base compensation) is an undervalued component of compensation planning.
Payor Methods
As the provider role is changing in nature from advisor to partner, the way we pay for healthcare is shifting as well. Our existing fee-for-service model has created a revenue machine directly contributing to physician skepticism, provider burnout and issues with retention. As compensation specialists, we started to address this problem through the RVU. While this has helped, there is still more work to be done in transitioning compensation plans to value-based pay, even in advance of the payers making the transition.
These four levers have broad impacts on how, where, when, and to whom an organization delivers care, and are core to the way funds are allocated internally. It is only fitting that they also factor into provider compensation, to align and inform providers of the tenets that drive the way their institution delivers healthcare, both now and looking to the future.
Amy Jackson – Statera
[1] https://www.globenewswire.com/news-release/2020/10/27/2114984/0/en/Global-Medical-Device-Market-2020-Size-To-Increase-Due-To-Rising-Infectious-And-Chronic-Disease-Cases-As-Per-The-Business-Research-Company-s-Medical-Devices-Global-Market-Opportuni.html
[2] https://www.fiercehealthcare.com/hospitals-health-systems/acp-4-guiding-principles-for-making-patients-partners-their-healthcare
[3] https://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/patient-centered-care-and-experience-scores.html?id=us:2em:3na:chs3339:awa:chs:051117&ctr=textlink&sfid=0031400002wbnjRAAQ
