After months of negotiation, you finally receive some much-needed support from your facility partner. Everyone should be happy, right? Well, yes, but how should you distribute it? Should everyone get the same amount? Should it be allocated according to your existing compensation system? Or should you consider adjusting your existing system to better align with the facility’s intended purpose for its investment in your group?
Compensation systems provide incentives that drive behavior, so it is important to think about what behaviors you are trying to incentivize when you are designing them. If you value certain types of work, times of day or procedures more than others, people will gravitate towards that work. The problem with changing the system is that, for one person to get more, someone else typically needs to get less, and self-preservation trumps altruism every time. This can make the beginning of a new support arrangement an ideal time to consider a change. While all boats are rising, it may be a less contentious time to make independently needed changes, as well as those that are necessary to fulfill the intended objectives of facility support.
Anesthesiologist compensation systems fall along a spectrum from “equal share” on one end to “eat what you kill” (EWYK) on the other. In between, we have shift/ hourly systems, units/points systems, and multiple iterations of all the above. In my experience, there are few systems at the extremes of the spectrum anymore. Most equal share systems have found a way to value weekends, call, and perhaps vacation weeks, to allow physicians at least some flexibility to work more (or less). And most EWYK models have taken steps to equalize using a blended unit for payer blindness or only a portion of base units to improve equity among case types.
I believe that the best systems are the ones towards the center of the spectrum. Yes, the productivity incentive of modified EWYK methods can be a positive incentive to move cases along and reward people for what they work. But every positive has a negative side when taken to an extreme. It is not uncommon to see posturing and cherry-picking of shifts under these arrangements. Some physicians are inevitably more focused and adept at this than others. Often under these systems, the reward is not necessarily commensurate with the difficulty of the case, the patient or other aspects of the work. Some groups have added “acuity units” (like physical status units used in billing) for the more complex patients and/or allow more base units for certain procedures to try and improve equity. Many groups have expanded time credits to place a greater emphasis on time and try to neutralize possible over- or under-weighting that can result from variation in base units. But none of these systems address the less efficient days that can happen due to unplanned delays, slower surgeons, schedule gaps (e.g., as often seen with non-operating room anesthesia, or NORA, sites), flip rooms, trauma/cardiac/liver services and other inherently inefficient service lines that may be critically important to the hospital. This can be accomplished via a shift or hourly system, but many proponents of EWYK fear that, without a tie to productivity, laziness or work avoidance could set in.
Appeals for facility support are often based upon the need for the hospital to supplement inefficient services it chooses to offer either for its own financial benefit, or to satisfy surgeons who bring cases to the hospital. Often, a significant portion of what the facility is paying for is to support the cost of providing this coverage that does not generate sufficient revenue on its own. Facility stipends are not gifts intended to make the rich richer. They are “compensation for under-compensated services” that the hospital is requesting the anesthesia group provide availability to cover.
As such, taking this money and adding it to a system that already rewards productivity may be counterintuitive to the hospital’s intention in providing funding. Its intention is to support services it wants that cannot be supported by revenue. Part of this relates to payer mix but most groups have found a way to balance that inequity. The other big part of this is inefficient service lines, call and other times that anesthesia availability is needed but may not generate sufficient revenue to cover cost. Supporting these inefficiencies is often what the money is intended for and, in my opinion, how it needs to be allocated.
Systems that already have mechanisms in place to compensate for inefficiency, typically through payment of shift/hourly rates, availability fees and/or minimum guarantees, may need less tweaking. Availability fees are paid for the intrusion on one’s life of being on call. In my opinion (and the opinion of most anesthesiologists I know), being required to stay in the hospital (restricted, or in-house call) presents a greater intrusion and should be valued at a higher level than calls that are unrestricted and can be taken from home. Yes, the latter is also an intrusion in that you are tethered to your home and the surrounding area and there are restrictions on what you can do but is it not the same level of restriction as having to remain inside the hospital. Typically, I see restricted call availability fees set at rates up to fifty percent higher than home call.
Some groups also adjust the rates paid for time associated with cases done on nights/weekends/holidays. This can skew compensation in favor of these shifts but, to be fair, the least desirable shifts should have the most associated pay to incentivize people to work them. This can also compensate for the fact that some calls are busier than others. In my mind, the availability fee should be the same without regard to the likelihood of working. That fee is for the intrusion on your life of being on call. But a call where you work all night long is more taxing than a call where you only work minimally (or not at all). The productivity component, whether paid hourly, by case points or some other method, is how to address this. If call pay has both an availability and productivity component, those who work more will make more but at least those who gave up their night or weekend but did not have any cases at all are paid something.
Some groups offset for inefficient daytime assignments by simply paying straight time (from start of first case, or whenever you are required to be there, until end of last case, or when you can go home). Others on productivity-based methods use daytime availability fees to offer something to people who may be stuck in an inefficient room or “forced off.” People who have been on productivity-based systems for a while may balk at the idea of “paying people for not working” as being against group culture. But the reality is that someone must cover these assignments and, it is the (un)luck of the draw who gets them. You can try to distribute them equitably but that does not always work out as they are more prevalent in some facilities than others. In a vacuum, most people would prefer to be in a productive room (particularly if it impacts their pay), but all rooms do not run that way and, hard as we might try to make it so, it doesn’t always “come out in the wash.” This is a concern for equal share systems as well. Proponents of these systems may say “no worries, it all evens out over time." But shifts vary significantly from day to day and week to week, so it does not necessarily even out over time, even if assignments are equalized.
Minimum guarantees are another way to approach paying for underutilized time. Here you pay according to a productivity system, but assure some minimum amount is earned for people who must either stay in the hospital or remain available to come into the hospital (like restricted versus unrestricted call, these amounts should be different in my opinion).
However it is done, it is important to include some type of payment for availability that does not result in production. Failure to do this makes the more productive daytime work the best (or only) way to “profit” under the system. Most people would prefer to work daytime shifts as opposed to nights and weekends. If undesirable shifts are not incentivized with appropriate pay, people will gravitate away from them, and it can be difficult to get call shifts covered.
It is important to remember that no system will be perfect. There will always be unintended consequences and people will figure out a way to “game” any system. So, it is important to remain flexible and be willing to make needed changes when glitches become apparent. But it is also important not to tweak the whole system because you have one bad actor who is manipulating it. Many groups end up overcomplicating what is otherwise a good system, putting in stopgaps to prevent abuse, often by a single outlier. If that is the situation, deal with the behavior and the person. Don’t turn your system into an administrative nightmare that nobody can understand or track simply because you do not want to deal with outlier behavior.
Keeping it as simple as possible is also a critical element of success. In this competitive workforce, it is important to be able to explain the system to potential recruits and offer transparency for people to be able to verify that they have been paid correctly. If the rules become too complicated, that becomes an advantage to those who understand the system better, which leaves new hires (who are usually the most vulnerable) feeling disadvantaged.
In summary, there are many elements to consider in redesigning a compensation system. Doing it at a time where there is an influx of new money is likely to make it less contentious as everyone should see some benefit. Engaging people in the process and hearing potential concerns is critical to ultimate buy in of the change. Thinking about what seems fair before you put numbers to it is typically the best way to develop an equitable proposal, but then you need to do a “dry run” (prospectively or retrospectively) so that people can understand what it will mean for them individually before implementation. Like most forms of change, fairness, inclusion, communication, transparency and flexibility are the cornerstones of a successful result.
Shena J. Scott, MBA, FACMPE, founder and CEO of Scott Healthcare Consulting, Inc., has been actively involved in anesthesia practice administration for over 30 years. She has spent the last six years consulting with over 100 anesthesia practices and hospitals across the country in many areas of practice improvement, most often assisting them with hospital contract negotiations, strategic planning and governance. She spent the first 22 years of her career as the executive director of a mid-sized anesthesia practice in Melbourne, FL. In 2013, she led that practice through a merger with five other practices in three different specialties to form Brevard Physician Associates, a 200+ provider group that provides all of the anesthesia, emergency medicine and radiology services to the largest integrated delivery system in Brevard County, Florida. Ms. Scott is a former chair of the MGMA Board of Directors, president of the MGMA Anesthesia Administration Assembly, and a current member of the ASA Committee on Practice Management. She is a frequent lecturer at ASA Practice Management, AIABPM, MGMA and other conferences. She can be reached at scotthealthcareconsulting@gmail.com