Editor's note: This article by Tony Mira, president and CEO of Anesthesia Business Consultants, an anesthesia & pain management billing and practice management services company, originally appeared in Anesthesia Business Consultants eAlerts, a free electronic newsletter. Sign-up to receive this newsletter by clicking here.
Along with more than 300 other MGMA-ACMPE Anesthesia Administration Assembly members and exhibitors, we participated in the annual AAA meeting in Scottsdale last week. One breakout session discussion group in particular was so informative that we obtained permission to bring a summary to our readers.
About 60 individuals attended the discussion of compensation strategies moderated by Stephen E. Comess, Executive Director, United Anesthesia Services, P.C. Mr. Comess got the ball rolling on responses to twelve prepared compensation management scenario questions by giving each member of the audience a playing card; if the card matched another one drawn by Mr. Comess, that member provided the first response to the next question.
Some scenarios sparked vigorous discussion of compensation strategies. In order, the scenarios and responses were as follows:
1. A subspecialty fellowship-trained anesthesiologist feels undervalued for his or her coverage of difficult or complex cases. How do you remedy this?
a. The practice pays a "stipend" to the fellowship-trained anesthesiologist.
b. Fellowship-trained physicians have a shorter track to partnership.
c. Starting salaries are higher for fellowship-trained anesthesiologists, but all partners receive equal shares of revenues.
d. The only compensation differential is based on productivity measured by time.
2. Your group loses a contract for a profitable ambulatory surgery center. How do you reconcile this with your compensation?
a. The group moves anesthesiologists, CRNAs and AAs around among the other facilities served.
b. Staff who leave or retire are not replaced (attrition).
c. One group lost 20 full-time equivalent positions when the hospital was sold and the surgeons all left. Losses would have been more than $200,000 per year for each of the 20 FTEs. The group laid off the staff from the hospital that had been sold. The first to be let go were the CRNAs, followed by the most junior of the physicians.
d. Another group protects itself against fallout from the potential loss of a hospital by including a clause in their anesthesiologists' contracts that makes their employment hospital-specific. In case positions are eliminated at a particular hospital, the physicians who work at that hospital have no right to transfer to another facility — and the contracts contain non-competition provisions so that the terminated physicians will not be able simply to enter into a new agreement with the hospital.
3. A number of managed care contracts' reimbursement rates have been reduced. How do you absorb this change into your compensation system?
a. Recognizing that it must look at what is within its control — staff and practice costs — the group may be able to reduce CRNA slots, increasing medical direction ratios, and/or part-time physician positions.
b. Going non-par may be feasible in a few rare instances.
4. The hospital that provides a stipend is looking to reduce its costs and has approached you about reducing the stipend. What are your next steps?
a. Analyze the number of anesthetizing locations and hours staffed and consider substituting on-call for in-house coverage.
b. An independent consultant may be retained to help demonstrate value.
c. For-profit hospitals are less likely to agree to stipends but may be willing to pay for the services of a medical director
d. Compare physician salaries to national compensation survey data. If the hospital's anesthesiologists are compensated at the 25th percentile, can the hospital reasonably expect to be in top 100?
e. Trade the stipend reduction for something else of value, e.g., exclusivity at a surgery center owned by the hospital.
f. One group earned a new stipend by implementing protocols for pre-operative testing and shaving $300,000 off the hospital's costs.
5. How do you accommodate senior partners who wish to reduce their call within a system that doesn't provide for reduced call and/or adjustments to compensation?
a. In a time-based productivity system, the compensation issue takes care of itself. An equal-shares practice should allow members to buy and sell call.
b. A very large practice might create a distinct group of anesthesiologists who will be on call at night, on weekends and on holidays.
c. One group has daytime-only positions and contracts with a locum tenens physician to cover call. Members who want to give up a call shift make arrangements with the locum tenens anesthesiologist directly.
d. Another equal-shares group allows three senior partners to share two jobs. These anesthesiologists individually have more time off, and the practice also benefits because the three function as an internal locum tenens group.
6. Two partners wish to share a single position. How do you recognize this in terms of compensation and benefits?
a. In general, job-sharing is acceptable as long as it doesn't cost the group money.
b. One practice uses a points-based compensation model, with points given for day shifts, call, and weekends. On a ¾ time schedule, the job-sharing partners draw 75 percent of their expected compensation for the year. If an anesthesiologist were to go to ½ time, the draw would be reduced to 50 percent and benefits would be paid for by that partner himself or herself.
c. In another practice, five anesthesiologists share four positions, with a 20 percent reduction in compensation.
7. Your practice has a partner who is approaching retirement and wants to slow down his call. He is still carrying the same paid time off as the other partners. How do you make this equitable?
a. A large practice allows senior partners to slow down to a half-time schedule, with half of their normal paid time off, when they commit to retire in three years. The three-year notice makes it easier for the practice to anticipate recruitment needs.
8. Your practice works on a productivity model. You've just been contracted to staff a new facility. How do you adjust compensation to hold providers harmless for the startup period when revenues will be below costs?
a. One practice pays its anesthesiologists until 5:00 p.m. whether they are performing cases or not, because management wants to maintain high visibility at the new surgicenter.
b. It is common to receive an income guarantee from the new facility.
9. You have a physician who is not meeting all of the citizenship and practice standards of the group. Do you penalize his/her compensation? And if so how?
a. Do not use compensation strategies to penalize poor clinical performance. Instead refer the subpar physician for mentoring or proctoring (or follow your disruptive-physician plan, if applicable).
b. It is reasonable to compensate physicians for superior performance. One practice uses a point system with 15 different performance measures. If an individual anesthesiologist receives 14 out of 15 possible points, s/he is eligible for 14/15 of the performance bonus.
10. You have a doctor who is stepping up administratively and creating new opportunities and relationships for the practice: marketing to surgeons who are developing a new ambulatory surgery center, developing scheduling software for anesthesia services, participating in hospital committees to reduce costs and increase efficiency, etc. How do you compensate him/her appropriately for these activities?
a. Two such doctors were designated "medical director" and received compensation for performing the functions of the title.
b. In another group, the anesthesiologist who steps up administratively is placed on an accelerated track to full partnership (typically, those who take on the administrative role are about two years out of training).
11. A pain doctor is taking time to market the practice through such activities as networking, referral building and public relations, all of which draw patients for the entire pain practice. How do you ensure the productivity of time off for marketing? How do you compensate this physician for bringing in dollars for everyone?
a. One practice makes time available for their go-getter physician to make presentations to the local Chamber of Commerce and engage in other PR activities by having other physicians work pre- and post-call.
12. After speaking with various health plan representatives, you know that your healthcare cost will rise 20 percent. Additionally, your insurance benefit costs have risen or are expected to rise. How do you recognize increased benefit costs in your compensation plan?
a. In an equal-shares group, the increased insurance benefit costs are also shared equally.
b. Some groups reduce coverage and allow their members to make up the difference, if they so choose, by taking pre-tax dollars out of their salaries.
c. Others review their benefit structure and determine the "pain points," increase the deductibles, consider self-insuring, or start from scratch with a new health benefits plan.
We hope you can see from the summary of the moderated discussion that the audience had a wealth of experience that they were willing to share. Note that the ideas above do not represent the opinions of or guidance from MGMA-ACMPE. We also hope that our summary inspires some creative thinking if you are facing any of the scenarios presented.
Learn more about Anesthesia Business Consultants.
Along with more than 300 other MGMA-ACMPE Anesthesia Administration Assembly members and exhibitors, we participated in the annual AAA meeting in Scottsdale last week. One breakout session discussion group in particular was so informative that we obtained permission to bring a summary to our readers.
About 60 individuals attended the discussion of compensation strategies moderated by Stephen E. Comess, Executive Director, United Anesthesia Services, P.C. Mr. Comess got the ball rolling on responses to twelve prepared compensation management scenario questions by giving each member of the audience a playing card; if the card matched another one drawn by Mr. Comess, that member provided the first response to the next question.
Some scenarios sparked vigorous discussion of compensation strategies. In order, the scenarios and responses were as follows:
1. A subspecialty fellowship-trained anesthesiologist feels undervalued for his or her coverage of difficult or complex cases. How do you remedy this?
a. The practice pays a "stipend" to the fellowship-trained anesthesiologist.
b. Fellowship-trained physicians have a shorter track to partnership.
c. Starting salaries are higher for fellowship-trained anesthesiologists, but all partners receive equal shares of revenues.
d. The only compensation differential is based on productivity measured by time.
2. Your group loses a contract for a profitable ambulatory surgery center. How do you reconcile this with your compensation?
a. The group moves anesthesiologists, CRNAs and AAs around among the other facilities served.
b. Staff who leave or retire are not replaced (attrition).
c. One group lost 20 full-time equivalent positions when the hospital was sold and the surgeons all left. Losses would have been more than $200,000 per year for each of the 20 FTEs. The group laid off the staff from the hospital that had been sold. The first to be let go were the CRNAs, followed by the most junior of the physicians.
d. Another group protects itself against fallout from the potential loss of a hospital by including a clause in their anesthesiologists' contracts that makes their employment hospital-specific. In case positions are eliminated at a particular hospital, the physicians who work at that hospital have no right to transfer to another facility — and the contracts contain non-competition provisions so that the terminated physicians will not be able simply to enter into a new agreement with the hospital.
3. A number of managed care contracts' reimbursement rates have been reduced. How do you absorb this change into your compensation system?
a. Recognizing that it must look at what is within its control — staff and practice costs — the group may be able to reduce CRNA slots, increasing medical direction ratios, and/or part-time physician positions.
b. Going non-par may be feasible in a few rare instances.
4. The hospital that provides a stipend is looking to reduce its costs and has approached you about reducing the stipend. What are your next steps?
a. Analyze the number of anesthetizing locations and hours staffed and consider substituting on-call for in-house coverage.
b. An independent consultant may be retained to help demonstrate value.
c. For-profit hospitals are less likely to agree to stipends but may be willing to pay for the services of a medical director
d. Compare physician salaries to national compensation survey data. If the hospital's anesthesiologists are compensated at the 25th percentile, can the hospital reasonably expect to be in top 100?
e. Trade the stipend reduction for something else of value, e.g., exclusivity at a surgery center owned by the hospital.
f. One group earned a new stipend by implementing protocols for pre-operative testing and shaving $300,000 off the hospital's costs.
5. How do you accommodate senior partners who wish to reduce their call within a system that doesn't provide for reduced call and/or adjustments to compensation?
a. In a time-based productivity system, the compensation issue takes care of itself. An equal-shares practice should allow members to buy and sell call.
b. A very large practice might create a distinct group of anesthesiologists who will be on call at night, on weekends and on holidays.
c. One group has daytime-only positions and contracts with a locum tenens physician to cover call. Members who want to give up a call shift make arrangements with the locum tenens anesthesiologist directly.
d. Another equal-shares group allows three senior partners to share two jobs. These anesthesiologists individually have more time off, and the practice also benefits because the three function as an internal locum tenens group.
6. Two partners wish to share a single position. How do you recognize this in terms of compensation and benefits?
a. In general, job-sharing is acceptable as long as it doesn't cost the group money.
b. One practice uses a points-based compensation model, with points given for day shifts, call, and weekends. On a ¾ time schedule, the job-sharing partners draw 75 percent of their expected compensation for the year. If an anesthesiologist were to go to ½ time, the draw would be reduced to 50 percent and benefits would be paid for by that partner himself or herself.
c. In another practice, five anesthesiologists share four positions, with a 20 percent reduction in compensation.
7. Your practice has a partner who is approaching retirement and wants to slow down his call. He is still carrying the same paid time off as the other partners. How do you make this equitable?
a. A large practice allows senior partners to slow down to a half-time schedule, with half of their normal paid time off, when they commit to retire in three years. The three-year notice makes it easier for the practice to anticipate recruitment needs.
8. Your practice works on a productivity model. You've just been contracted to staff a new facility. How do you adjust compensation to hold providers harmless for the startup period when revenues will be below costs?
a. One practice pays its anesthesiologists until 5:00 p.m. whether they are performing cases or not, because management wants to maintain high visibility at the new surgicenter.
b. It is common to receive an income guarantee from the new facility.
9. You have a physician who is not meeting all of the citizenship and practice standards of the group. Do you penalize his/her compensation? And if so how?
a. Do not use compensation strategies to penalize poor clinical performance. Instead refer the subpar physician for mentoring or proctoring (or follow your disruptive-physician plan, if applicable).
b. It is reasonable to compensate physicians for superior performance. One practice uses a point system with 15 different performance measures. If an individual anesthesiologist receives 14 out of 15 possible points, s/he is eligible for 14/15 of the performance bonus.
10. You have a doctor who is stepping up administratively and creating new opportunities and relationships for the practice: marketing to surgeons who are developing a new ambulatory surgery center, developing scheduling software for anesthesia services, participating in hospital committees to reduce costs and increase efficiency, etc. How do you compensate him/her appropriately for these activities?
a. Two such doctors were designated "medical director" and received compensation for performing the functions of the title.
b. In another group, the anesthesiologist who steps up administratively is placed on an accelerated track to full partnership (typically, those who take on the administrative role are about two years out of training).
11. A pain doctor is taking time to market the practice through such activities as networking, referral building and public relations, all of which draw patients for the entire pain practice. How do you ensure the productivity of time off for marketing? How do you compensate this physician for bringing in dollars for everyone?
a. One practice makes time available for their go-getter physician to make presentations to the local Chamber of Commerce and engage in other PR activities by having other physicians work pre- and post-call.
12. After speaking with various health plan representatives, you know that your healthcare cost will rise 20 percent. Additionally, your insurance benefit costs have risen or are expected to rise. How do you recognize increased benefit costs in your compensation plan?
a. In an equal-shares group, the increased insurance benefit costs are also shared equally.
b. Some groups reduce coverage and allow their members to make up the difference, if they so choose, by taking pre-tax dollars out of their salaries.
c. Others review their benefit structure and determine the "pain points," increase the deductibles, consider self-insuring, or start from scratch with a new health benefits plan.
We hope you can see from the summary of the moderated discussion that the audience had a wealth of experience that they were willing to share. Note that the ideas above do not represent the opinions of or guidance from MGMA-ACMPE. We also hope that our summary inspires some creative thinking if you are facing any of the scenarios presented.
Learn more about Anesthesia Business Consultants.