How to keep doctors motivated in a changing salary-culture?

Medical versus financial performance in a merge of hospitals

In January of this year 2019 two clinics have merged :Bergman clinics and NL-healthcare Clinics:  relatively large chains of focusclinics with overlapping specialties.

The specialties that are exercised are orthopedics, ophthalmology, plastic surgery and dermatology. I am responsible for the medical policy within the new merged department of dermatology.

I once worked in a hospital in which each specialist was directly responsible for his own income: the more production, the more income. The group with whom we merge is a small group of dermatologists that had stipulated a percentage of production as their salary,  but they are willing to change this into a fixed salary which is probably lower but gives the certainty of a guaranteed income. When I was nominated as medical director at NL-healthcare (and so before there was this merger) I was used to a salary-system in which doctors were paid for their performance and production. A for the company very productive system  but it sometimes lead to quarrels between the doctors accusing each other for having more ‘easy’ patients with treatments that were more lucrative ( surgery treatments pay a lot more than allergy-patients for example) or ‘overbooking’ the amount of patients in their office-hours. Some doctors chose treatments more expensive than necessary because of their lucrative character: shall I excise this basal-cell carcinoma or will I suggest photodynamic therapy  ($500 versus $1500)?, et cetera. To eliminate this so-called perverse incentives the complete staff agreed that everyone was transferred to fixed-paid employment. A good salary in return for normal  amounts of patientcontats and likeable working hours.

Unfortunately I noticed that since then the motivation to carry out some extra work is no longer attractive: previously a dermatologist had a financial benefit to give service to a patient: for example when there is a necessity to remove a suspicious mole: shall I do it in the after hours after work or do I make an appointment later this month during my regular working-hours?  Consultation times are more often shifted to double the normal time because they suddenly are ‘complicated’ cases and so waiting times for a first consultation for a new patient rise. Procedure-times are stretched because then you can do you a part of your paperwork which normally was scheduled in doctors ‘own’ time.

So there is a 9-to-5 culture… Beside the fact that this has a direct impact on financial performance (although not directly my responsibility: we have an operational manager for that), I also think that this has a direct influence on the quality of medical performance and service.

Now we are in the middle of the salary-negotiations and we have to choose for a new model. I have great doubts about both systems and I am looking for some sort of balance between these systems.

Is there a middle ground? What would be a good system in which the motivation and pleasure of work for doctors remains high, there is no 9-5 culture and there remains an incentive to provide extra service to the patient?

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5 thoughts on “How to keep doctors motivated in a changing salary-culture?

  1. you’re model is an interesting one. Essentially you’ve moved to a salary model but are still compensated via Fee for service. You clearly need a blend where the providers have a base tied to production, with a potential for increase with increased production. They also need a quality incentive to mimimize over utilization. How you weight the compensation will incentivize the providers differently.

  2. Ah ! Thats a very familiar issue probably all around …
    Its very difficult to decide which payment system is better —Each has their own advantages and disadvantages
    “fixed salary” —> (no incentive,9-5 culture, complacency, probably laziness and tendency to work less) or
    “fee for service / as per surgeries done” —> (unnecessary/un-indicated surgery, unethical practice, infighting to take as many patients, financial cost to hospital )

    Probably the answer should be somewhere in-between.
    In my opinion —
    Minimum guaranteed SALARY (for peace of mind) with EXTRA INCENTIVES for work done . Next salary raise /appraisals should be decided depending on the number of patients seen, surgeries performed, quality parameters achieved, surgical audits, Patient feedbacks, feedback from same department colleagues (so that no one tries to take undue advantage of others) ,etc

  3. Yes, this is a very well known and problematic issue. The fixed salary model is a killer for initiative and creates very lazy people, unfortunately. I agree that a basic, fair salary per day would be a good start that can be higher if well defined goals are met, incl patient satisfaction, innovative treatments and work done for the whole group instead of only for yourself (like advertising, giving talks to generate more patients etc) I guess it would be fair to have a minimum as well as a maximum salary in order to try to prevent too much difference between the physicians.

  4. Physician compensation is a challenging issue, especially while we are in a transition from fee-for-service to value-based reimbursement. I would recommend a balanced approach:
    1. Base salary set at the 25th percentile of national benchmarks.
    2. Portion of base salary at risk if minimum metrics are not met (patient experience scores, quality metrics, etc.)
    3. Incentives based upon personal achievements (RVU’s above 75th percentile, patient experience physician communication scores above 75th percentile, complication rate below a certain threshold, etc.)
    4. Incentives based upon the group’s performance on quality, patient experience and financial metrics.
    I would also make sure to negotiate incentives with the payers that align with the above quality and patient experience metrics.

  5. Apart from the many interesting ideas and thoughts above, maybe one solution to the former adopted model would be to equally distribute different procedures among the doctors. First thing to do would be to estimate how many photodynamic therapies and mole excisions happen in a month, for example (make an average per month over the last year data). Then, these procedures would be equally scheduled and distributed among each dermatologist on a one month-period – this would avoid some doctors picking the most lucrative ones. Of course there could be some specific procedures that some doctors could be better than others (and this would be evaluated by quality measures and outcomes) and, in this case, specific incentives could be implemented. Limits for consultation times should also be implemented to avoid long waiting and doctors should be responsible for not allowing delays to happen.

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