Physician Compensation in a World of Health System Consolidation and Integration

By Zismer, Daniel K. | Journal of Healthcare Management, March-April 2013 | Go to article overview

Physician Compensation in a World of Health System Consolidation and Integration


Zismer, Daniel K., Journal of Healthcare Management


As U.S. healthcare market dynamics encourage increased consolidation of physician practices with community health systems, questions relating to the future of provider compensation designs loom large.

A provider compensation framework becomes especially important as health systems' operating revenue structures shift and they assume financial risk from third-party payers, including governmental payers. To offset that risk, leaders of community health systems must determine how to align the financial incentives of employed physicians and other licensed providers with those providers practicing in the new world of value-based reimbursement models.

Some of those leaders might perceive the changes in healthcare reimbursement models as disruptive to employed physician compensation models built on productivity measures--whereby physicians are encouraged to do more and bill more. However, leaders of well-established integrated health systems seem little concerned with how a reforming healthcare market may disrupt physician compensation designs.

By definition, the integrated model allows for internal control over the design and management of these plans, permitting responsiveness that is unavailable to the conventional models where community hospitals and independent physicians are individually exposed to contracting and reimbursement model disruptions.

In a recent study by faculty and staff affiliated with the MHA and Executive Studies programs at the University of Minnesota on behalf of MedPAC, 15 senior leaders of integrated health systems in the United States were interviewed about the future of community health system reimbursement models and physician compensation designs (Christianson, Zismer, White, & Zeglin, 2011). A portion of the study, on the issue of alignment of incentives, was conducted in a structured interview format.

Among the important insights gleaned from these leaders were the following (Christianson et al., 2011):

(1) A belief that reimbursement for health services in the U.S. is likely to be somewhat of an "experimental science" for the foreseeable future, meaning leaders expect revenues to flow by multiple methods and models. Many of the leaders interviewed were positive toward the strategy of "risk contracting" as a way to effectively move market share from competitors to their organizations cost effectively (i.e. contracting for financial risk for defined populations);

(2) the ratio of employed physician extenders to employed physicians ranged from .6 to in excess of 1.0; meaning, if an integrated health system employs 500 physicians, it is likely it will employ from 300 to in excess of 500 licensed physician extenders; and

(3) because third party contracting methods are likely to result in disruptions in the historic operating revenue flow methods, integrated health systems have "disconnected" how the organization is paid from how physicians are paid. In other words, [integrated health systems] seek to provide stability in provider compensation plans even as the health system engages in contracting methods that are strategic in nature and different from the conventional fee-for-service revenue contracting models.

STABILITY IN PROVIDER COMPENSATION

The third observation is worth deeper examination. Leaders of integrated health systems who have significant experience with the integrated model emphasized the need to ensure stability of provider compensation, especially in the face of changing health system reimbursement plans. Furthermore, these leaders acknowledged a growing need to redefine the concept of provider productivity in the reform of health system payments to reflect the fact that physicians and other providers are engaged in professional activities beyond generating work relative value units (RVUs) (patients seen and charges billed). They include such compensable activities as clinical team management; clinical program leadership; and co-management of resource and capital asset-intensive centers of patient care, such as diagnostic and procedure centers, hospital beds, and large-scale ambulatory centers. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Physician Compensation in a World of Health System Consolidation and Integration
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.