Some of the biggest problems organizations face with physician hiring and retention? Finding that sweet spot in their physician compensation arrangement. It’s not as easy as finding out what the hospital has the budget for. Often, one can misstep by raising compensation packages to attract talent. However, there is Anti-Kickback legislation and Stark regulations to consider. Which means hospitals and health care centers need to be careful to not exceed the fair market value for services provided.
Here are 5 reasons your organization should hire valuation services for physician compensation.
- Staying regulation compliant.
The Anti-Kickback Statue was originally enacted in 1972 to curb medical abuse and fraud. A common lawsuit this law was meant to curb involved fraudulent billing that led to over payment by the government. Today, Anti-Kickback Statute violations, in addition to violations of the Stark Law, now make up most cases of False Claims Act. All of this is in place to protect patients from unfair business practices. But these regulations also affect compensation packages and practices. Hiring a valuation service can help you stay compliant. And will help avoid putting your hospital at risk, or causing legal disputes down the line.
- Understanding fair market value.
Physician compensation data is available nationally. However, decoding data takes more than determining a percentile on which to base compensation. Physician compensation should fall between the 25th to 75th percentile of the national average. But this is only if certain criteria are followed, such as the physician having necessary qualifications. And that the position and related requirements are unique to the market, or that the pool of qualified candidates is limited. Going above the 75th percentile should only be considered in certain circumstances. Valuation services can help you determine what percentile of compensation you should base your package on. And how to structure your compensation package to include a base component and an incentive component.
- Creating realistic but attractive incentive packages.
According to projections by the AAMC, the US will experience a shortage of doctors over the next 10 years. So it comes as little surprise that recruiters are getting creative with their compensation packages. For example, helping with student debt or loan aid. Providing flexible work hours, etc.
To stand out amid the competition, your compensation plan must be attractive but not hit the ceiling of realism either. Many physicians become dissatisfied by productivity comp packages that set thresholds too high. Or when a paycheck that may have seem guaranteed at the start dwindles if targets are not met. To avoid turnover based on this issue, comp packages must be clearly spelled out and understood on both sides to be a reasonable ask. In the end, using the right physician compensation model can keep a physician and is less expensive than hiring a replacement. Valuation services can help you create realistic but attractive packages.
- Articulating roles.
Certain roles within the medical health sector are easy to define and bill for. Others are vague, encompassing a broad scope that would be too limiting to define item by item. The result of an undefined work scope, however, is the possibility of padded work hours with no measurable outcomes. Roles that frequently face this problem are within the administrative or supervisory capacity. Teaching services, too, can become nebulous. Was it a teaching lunch? Valuation services can help define the duties, needs, and expectations of the position for the organization.
- Auditing physician performance.
Before investing in the hire of a physician, you will want to do the necessary background research on the potential hire. The hope is to have a long and equally rewarding relationship with the physician in question. There are cases, however, when needs cannot be adequately met by the potential new hire, and vice versa. This information is helpful to know before complex compensation packages are created. Thus saving time and money of all involved.