In today’s unprecedented times, planning and strategic deployment of those plans become critical to the future of your health system and medical groups. One area that provider compensation and contracting professionals focus on, along with operational and financial leaders within health systems, is the benchmark data that highlights certain productivity and compensation information about healthcare professionals. These surveys represent a critical component to not only compensation planning, but also future financial and strategic planning. Given the unprecedented changes occurring across the country due to this pandemic, it is more important than ever that organizations understand how to approach compensation data in the future. This article will outline issues organizations need to think about and how they can approach compensation and production data in 2021.
The Reality of the Data
One of the primary problems with the data as it relates to provider compensation and productivity is that it is highly variable depending on the survey, location, and even based upon who is filling out the survey. These issues create a less than a perfect opportunity to analyze what is occurring within organizations across the country. In short, the data is directional, but it does not tell organizations how to strategically, sustainably, and compliantly compensate healthcare professionals.
In addition to the significant need for interpretation of the data, the pandemic that has hit the country in 2020 will undoubtedly have a substantial impact on any future uses of data for the following years. Many organizations this year have significantly decreased volumes, compensation reductions for providers, and even furloughed certain healthcare professionals depending on the specialty. When the request for data on the year 2020 comes out, it will likely be a lost year of data.
What Should Organizations Do?
Provider compensation and contracting professionals should start planning now for how they intend to approach benchmarking and compensation changes for 2021. First, the actual data that will be requested for 2020 will not occur until 2021. However, organizations should start focusing on three key components to build a stronger approach to the data that they utilize. These three components include diversity, longevity, and consistency.
Diversity
Organizations should take the time now to analyze what surveys they utilize. If they are only using one or two surveys, they should focus on diversifying their data by implementing additional survey resources. There indeed becomes a point when too many surveys do not render you any more information than you had. However, many organizations across the country utilize one survey. An even more considerable amount of organization uses two. Now is the time to honestly think about three or four major surveys. This will allow stability in the data, and a window into a more diverse perspective on provider compensation and productivity.
Longevity
Another common issue with compensation surveys is that organizations focus on what does the latest survey say and how does that impact our practices. The problem with looking at the data purely on a year-to-year basis is that there are unique and significant issues that impact the information on a year-to-year basis. Still, if you utilize multiple years of data, then you would minimize those potential issues. For example, organizations are hiring more physicians directly to health systems than they ever have before in history. This means more data points are being placed in the survey data of physicians on salary with lower productivity than ever before in the history of data tracking. This certainly could have a material impact on compensation per unit rates as well as the perception that salaries are increasing and productivity is decreasing. However, if you utilized a multi-year data set, then you would mitigate issues such as that occurring. Also, using a multi-your data set will provide you with a true perspective on the progression of a specialty from a compensation and production standpoint.
Consistency
Many organizations across the country might look at multiple surveys to analyze what and how they pay. Besides, they may focus on utilizing regional data to highlight regional specific fluctuations of the data. Finally, some organizations use different data for establishing compensation than they do for risk assessments than they do for financial and production planning. The bottom line is that moving forward; organizations have an opportunity to create consistency in how they utilize data. This pandemic is going to result in considerable changes across specialties and organizations for not only months but potentially over multiple years. By taking an approach to creating consistency in the data, we can minimize those potential issues as we look at things in the future.
Moving Forward
As stated above, it is unlikely that the world is going to be normal from a healthcare perspective for at least a year. This might mean decreased volumes in various specialties, patients less likely to visit in person, and reduced utilization of facilities. In the event this crosses over into 2021, it could continue to impact the way we view data for years. The bottom line is that by specialty and by region, there are going to be drastic changes in the way healthcare is delivered and the volumes of healthcare. While organizations will need to confront these issues from a strategic perspective, provider compensation and contracting professionals can begin creating strategic plans around how we move forward and at what pace.
We will continue to follow up on a series on how certain members of our Association are looking to the future and planning at the bottom line is that all of us need to be thinking about it. To that end, the Association will be rolling out its first Annual Compensation Model Survey. This compensation model survey will be unlike any survey that is being offered. Specifically, the survey will seek to understand how organizations compensate healthcare professionals truly. This will allow organizations to focus on less interpretation of compensation data and more on actionable data highlighting how organizations develop models. The information will be completely de-identified and placed into regional buckets as well as a national bucket. For anyone who submits the survey, you will receive free access to the information. As this is rolled out, we will keep all members posted.
