Paula,
If you are looking to explore RVU-based compensation models, I have one that works incredibly well. It is based on statistics and therefore is highly defensible. You can also use this model to estimate what compensation would have been over the last year and project what it will be over the next year. It is also really quite simple. The steps go something like this:
1. Calculate how many work RVUs constitute 1 FTE. There are different ways to do this, but I use a calculation of minutes per work RVU for the national Medicare data set (2.4 billion claim lines) divided by the number of hours that the practice defines as full time.
2. Calculate the 95% confidence interval for the work RVUs to FTE ratio (I can help you with this)
3. Conduct a time series analysis of collections per unit for the past 1 to 3 years (no less than 1 and no more than 3). Compare this to summary statistics, such as median and again, develop a 95% confidence interval.
4. Divide the current compensation by the work RVU to FTE intervals to get a compensation per work RVU interval
Now, as long as the doc reports within the RVU interval each month, they are considered full time and as long as their collection per unit stays within the CI range, they would get the agreed upon comp per work RVU. If their work RVUs go below the lower bound of either the work RVU or collection per unit, their comp would decrease. If their work RVU or collection per unit increase above the upper CI limit, their comp per unit would increase.
Let me know if you would like to go over this on the phone.
Frank Cohen, MPA
Senior Analyst
MIT Solutions, Inc.
frank@mitsi.org
727.442.9117
www.mitsi.org
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Anyone willing to share your experiences with migrating pay increases away from annual raises to a model where bonus pools are distributed based on the practice/pod/department meeting predefined goals and benchmarks? I'm thinking that as we move deeper into the ecomonic downturn while facing further reimbursement cuts, we should be working now to construct a palatable alternative to giving salary increases and large year end bonuses simply because a tim eperiod has elapsed.
Our staff is very well compensated and has long enjoyed a rich benefit package. Our physicians are very generous - often too generous for their own good. Productivity and cooperation increases right before bonuses/raises, and returns to the status quo afterward. Our superstars always work hard, but the others -having gotten their payout - tend to resort to variable performance for the rest of the year.
Facing the fact that decreased W2s are a distinct possibility, the doctors see we finally have "hit the wall" on salary and benefits without offsetting productivity/cost reduction. They know that it may be uncomfortable while they extricate themselves from this methodology. However, I think it can be done effectively as long as we develop a good plan going in. Actually, I think the ecomony is an opportunity in disguise.
My thought is that, with all the people losing jobs and/or being asked to take pay cuts to keep their jobs, as a medical practice, we can position ourselves favorably by offering a compensation plan that still allows employees to meet or exceed previous salary expectations - but a portion of that compensation will be held (at risk), and distributed at the end of each quarter, provided that practice goals are met. That way, as long as staff work cooperatively on the incentives of the physicians (all things that staff have input to control: increasing patient satisfaction, efficient work flow, better throughput, proper chart documentation, etc.) they would have the option to maintain a similar standard of living. Maybe, that way, when the doctors say they want to fit that emergency add-on into the schedule, or that we need to have (paid) staff meetings outside work hours, it would be viewed positively and less obstructionism would occur.
I'd be interested in hearing your war stories - what you feel worked and what you found problematic. The good. The Bad. The Ugly.
Feel free to contact me personally if you'd like. paula@ohioeyesurgeons.com 614-827-6710
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Paula Taylor
Administrator
Ophthalmic Surgeons & Consultants of Ohio Inc
Columbus OH
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