Four ways to update how you pay physicians

How physician practices compensate their physicians continues to evolve. Whether you are looking to recruit new doctors or adjust existing compensation formulas, consider the following factors based on industry trends:

• Bonus. While the security of a steady salary is nice, physicians at all stages of their career are increasingly looking for the opportunity to earn extra incentives, according to experts who spoke with the New England Journal of Medicine.  "Usually, these incentives amount to 5 to 10 percent of the base compensation, and some are set up as reward or risk only," said Jeffrey Milburn, a consultant with the Medical Group Management Association. Quality-based bonuses are catching on as more care and outcomes data become available.
• Benefit mix. Not all physicians will be lured by the same kinds of perks. For instance, while health insurance, liability coverage and relocation allowance remain almost universal, newer doctors saddled with huge medical education debts often place loan forgiveness at the top of their wish list, American Medical News recently reported. Small practices in medically underserved areas may be able to help new hires access government programs to help pay off school loans.
• Work-life balance. Contrary to common assumptions, work-life balance is an even higher priority among senior physicians than Gen Xers, according to the 2009 Physician Retention Survey released in March 2010 by Cejka Search and the American Medical Group Management Association. Besides preferring shared call duty, these more experienced physicians often sought market-based compensation combined with flexible or part-time hours.
• Partnership. For mid-career physicians, on the other hand, the ability to buy into a practice continues to be of high importance. But unlike the buyouts of yesteryear, goodwill should not be considered, experts told American Medical News. Rather, an outside appraisal of hard assets or a percentage of receivables can establish the buy-in price. "Have a clear path to partnership," said Vivian M. Luce, the regional director of Cejka. "It cannot be vague, and anything over three years is unattractive."

To learn more:
- read the article in the New England Journal of Medicine
- see this piece from American Medical News
- check out the study from Merrit Hawkins & Associates
- access the survey from Cejka Search

Related Articles:
One-quarter of pediatricians working part time
Push for productivity makes it tough to maintain high-quality care
Key factors for today's physician compensation formulas