Performance-based bonuses are becoming more common, according to Hay Group's 2010 Physician Compensation Survey. In 2009, nearly all group-based organizations (92 percent) offered bonuses, also known as incentive plans, to their physicians, up from 75 percent in 2009.
Sixty-three percent of hospitals are offering physician incentive plans, compared with slightly more than half in 2009. But the share of integrated health systems offering physician incentive plans stayed flat at 67 percent.
The incentive plans are becoming more tightly tied to performance metrics--a sure sign pay-for-performance is taking off. Among the leading indicators are patient satisfaction and quality.
"No one should be surprised that healthcare organizations are moving to link pay to performance," says Ron Seifert, executive compensation practice leader for Hay Group's healthcare practice. Hospitals can expect to be increasingly rated on performance metrics such as patient satisfaction, readmissions and clinical outcomes. Reimbursements are likely to be tied to those performance indicators as well.
Salary structures and planning for physicians are flexible, according to the survey. Half of hospitals and integrated health systems and 54 percent of group-based physician practices said their process is "independent." So while there is a philosophy and structure, positions, specialties, departments and individual doctors are reviewed separately for salary potential and subsequent increases.
Don't expect much change in base salary increases, according to Hay Group. Hospital-based organizations are planning base salary increases of 2.9 percent for 2010-11 vs. 2.8 percent in 2009-10. Group-based physician practices which saw higher increases of 4.8 percent in 2009-10, reported planning base salary increases of 3.3 percent for 2010-11.
To learn more:
- read the Hay Group's press release
- read this Healthcare Finance News piece