We are in the midst of a monumental move away from the predominant fee-for-service reimbursement models in favor of structures that pay for value in health care. While fee-for-service reimbursement is expected to be a part of how health services are reimbursed for the foreseeable future, payers are beginning to reward accountability for clinical quality, population health, cost reduction, and patient experience. Physician compensation plans that pay clinicians exclusively for volume are evolving to incorporate incentives for improved outcomes and exceptional patient experience. Failure to incorporate these incentives could jeopardize the viability of provider organizations, whether large health systems or small independent practices.
Traditionally, physician compensation plans may have been viewed merely as a formula for dividing the physician compensation pie into individual slices. More recently, many health care organizations have found benefits in viewing their physician compensation program as a strategic tool to maintain or grow the size of the compensation pie by aligning incentives with key strategic initiatives. Organizations should be mindful about how their physician compensation plan can help their business stay relevant and nimble in the face of sweeping payment reform. If current strategic plans and/or compensation models are in conflict with the direction of health care reform, they must be updated.
Length: 3 pages (PDF 218 kB)