Use of Value-Based Payments Continues to Increase Slowly
A new study found 39 percent of respondents use quality metrics in their payment platforms.
- Earlier last month, compensation consulting firm Sullivan, Cotter and Associates released its 2014 Physician Compensation and Productivity Survey. This is the 22nd annual edition of the survey that provides a comprehensive database. It contains responses from 517 organizations covering over 98,000 healthcare providers and 240 specialties and positions.
One of the biggest takeaways from the survey is the increasing adoption rate of value-based payments. This method is replacing the pay-per-service approach that has been popular. The study found that 39 percent of respondents reported to using quality metrics. That is up from 32 percent that was cited in 2013. On top of that, actual quality incentives approximate five percent of physician’s total cash compensation, which is on par with the 2013 findings.
“Linking quality to compensation is expected to increase over the next few years,” said Kim Mobley, Managing Principal and National Physician Compensation Practice Leader. “Organizations must understand the effect quality incentives have on the compensation and behavior of the physician as well as the organization’s finances. The physician compensation plan and philosophy should align with organizational objectives to ensure the physicians are prepared for change. Choosing measurable quality metrics is key to physician buy-in.”
There are other interesting takeaways from the study. It was discovered that 68 percent of respondents stated they have increased their employed physician and Advance Practice Clinicians (APCs). An additional 66 percent plan on increasing that number during 2015.
Tim Reed, Sullivan Cotter’s Managing Principal and Practice Leader for Physician Valuation, said in the release that these numbers are on par with current trends of APCs and industry consolidation as healthcare organizations create strategies to manage costs and improve access as well as the patient experience.
“This can have a significant impact on compensation strategies,” Reed said.
This increased need for physicians stems from growing demand. During the most recent open enrollment period, the U.S. Department of Health and Human Services Secretary Sylvia Burwell said that nearly 6.5 million consumers have access to “quality, affordable health coverage.” With this many potential patients with healthcare – either for the first time or being automatically reenrolled from the year before – hospitals will need to increase staff to meet the demand.
Respondents also cited a median total cash compensation increase of 4.9 percent from primary care and 1.9 percent for medical specialties. These are down a tick from 5.7 percent and 3.2 percent that was reported in 2013. Surgical specialties increased slightly, moving from 2.3 percent to 2.5 percent in 2014.
Months earlier, 42 percent of the respondents stated their personal income has not changed over the previous 12 months.
