Physician Compensation Directions and Health Reform July 2017
Speaker Introduction Wayne Hartley Vice President, AMGA Consulting Over 20 Years of Medical Group & Consulting Experience Allina Health, Minneapolis, MN HealthEast, St. Paul, MN University of Vermont (Fletcher Allen Health Care) Provider compensation and FMV, revenue cycle and healthcare reform/value-based care (MACRA, risk) MHA, University of Minnesota; BS, Cornell University Contact: whartley@amgaconsulting.com 2
Roadmap AMGA Survey 2017 Report Elements of Compensation Issues Driving Physician Compensation Redesign Nurse Practitioners and Physician Assistants (APCs) Questions? 3
AMGA Survey 2017 Report 4
2017 Report 30th Annual AMGA Medical Group Compensation and Productivity Survey The report includes data on: 140 physician specialties, 28 other provider specialties Total clinical compensation, work RVU, net collections, gross productivity, comp to productivity ratios, visits, benefits New physician salaries Department chair salaries Academic facility breakouts NP and PA data Regional and group size breakouts 5
2017 Report - Demographics % of Group % of Prov. By Group Size Groups Total Providers Total Fewer than 50 38 14.1% 2,312 2.3% 51 to 150 71 26.4% 10,547 10.3% % of Group % of Prov. By Group Size Groups Total Providers Total Fewer than 50 44 17.0% 1,972 2.0% 51 to 150 68 26.0% 9,214 10.0% 151 to 300 54 21.0% 17,701 19.0% More than 300 94 36.0% 63,734 69.0% By Geographic Region Eastern 39 15.0% 14,809 16.0% Northern 91 35.0% 43,412 47.0% Southern 84 32.0% 19,297 21.0% Western 46 18.0% 15,103 16.0% By Type of Clinic Single Specialty 12 5.0% 348 0.0% Multispecialty 248 95.0% 92,273 100.0% 151 to 300 62 23.0% 21,382 20.9% More than 300 98 36.4% 68,020 66.5% By Geographic Region Eastern 45 16.7% 18,765 18.4% Northern 90 33.5% 45,225 44.2% Southern 83 30.9% 21,320 20.8% Western 51 19.0% 16,951 16.6% By Type of Clinic Single Specialty 8 3.0% 111 0.1% Total 260 92,621 Multispecialty 261 97.0% 102,150 99.9% Total 269 102,261 Thank You for 100,000+++ 6
2017 Report - Participants 7
Elements of Compensation 8
Base Salary 9
Production Models 10
Compensation vs. Work RVU Slope of the market data indicates which specialties tend to be productionbased and which specialties tend to be salary- or shiftbased. 11
Value-Based Incentives In 2009, about 41% of groups responded that some amount of their physicians compensation was based on the achievement of value-based measures. In 2017, about 61% of groups responded that some amount of their physicians compensation was based on the achievement of value-based measures. 12
Prevalence of Value-Based Incentives If aggregated, quality is likely the most common category 13
Value-Based Incentive Amounts *Average only includes groups that reported quality or discretionary compensation represented some amount of total compensation. 14
But At-Risk Pay Does Not Mean Reduction... Can organizations sustain compensation increases >> productivity increases? 15
Primary Care by Region At current growth rates, IM in the West could exceed $300K at median in 3 years 16
APC Supervision (included in reported compensation) As states reduce supervision requirements, we are seeing decreases in APC supervision stipends, especially in primary care 17
Sign-On Bonuses (excluded from reported compensation) 18
Issues Driving Physician Compensation Redesign 19
Issues Driving Physician Compensation Redesign Healthcare reform and the focus on value-based metrics: Less focus on work RVUs with an eye towards panel size or salary models More dynamic incentive compensation design Transition from efficiency to cost metrics Re-evaluation of stacking compensation Alignment of compensation within medical groups Compensation out-pacing collections 20
Compensation Redesign: How It s Happening Production Models - Known quantity - Easy to administer - MD can influence wrvu - Not value-based Early Incremental Models - Shift to VBM - WRVUs matter - Transitional - Require physician and leadership education Intermediate Models - More salary-like - Still link to wrvu - Require more data for metrics - Not yet proven in some cases Advanced Models - Meet conceptual objectives - High discretion - Elicit concerns about production - Can raise questions on regulatory side 21
Perspectives on Work RVU Production For many years, work relative value units (wrvu) have increased in popularity in physician compensation plans Work RVUs have several benefits: Payer/reimbursement neutral Measure work effort or intensity of various visits/procedures E&M/CPT codes are equally weighted across specialties National benchmarking is possible through provider compensation surveys At the same time, wrvu can bring some distinct disadvantages: May promote focus on productivity Place emphasis on volume over value (volume over patient satisfaction) 22
Additional Quality Incentive Current Formula 100% Production New Formula Production + 10% Quality Family Medicine* $48.00 / wrvu Quality/Incentive up to 10% If 5,000 wrvu: $240,000 $240,000 x.10 = $24,000 Up to $264,000 or $52.80 per wrvu This approach is additive; it is not a withhold May need to lower the per wrvu starting point if larger incentive % desired At $52.80 per wrvu, compensation per wrvu is ~64 th percentile *Approximately market median values 23
Less Focus on Work RVUs Some predict that production-based models will go away or be much less dominant So they are putting substantial dollars in non-productivity pay Blend (Family Medicine & Internal Medicine) Compensation Components Clinical Compensation Production Component Quality/Incentive Target Compensation Percent 70% 30% 100% Performance Tiers Tier Conversion Factor Prod. %tile Range 50%tile Mid Tier $50.38 Target Compensation Tier 1 0-20% 1,503 3,754 2,629 $132,443 Tier 2 21-30% 3,755 4,218 3,987 $200,864 Tier 3 31-40% 4,219 4,586 4,403 $221,827 Tier 4 41-50% 4,587 4,899 4,743 $238,981 Tier 5 51-60% 4,900 5,242 5,071 $255,501 Tier 6 61-70% 5,243 5,651 5,447 $274,438 Tier 7 71-80% 5,652 6,211 5,932 $298,856 Tier 8 81-85% 6,212 6,594 6,403 $322,595 Tier 9 86-90% 6,595 7,198 6,896 $347,437 Tier 10 91-95% 7,199 8,142 7,670 $386,447 Tier 11 >95% 8,143 8,143 $410,267? 70% Production 30% Incentive 24
Less Focus on Work RVUs: Tiered/Banded Model Guidelines Increase above Band, paid at additional wrvus over band multiplied by the specialty wrvu rate or move to next band the subsequent year. Decrease below Band, semi-annual review. If x% or more below bottom of band, then decrease to projected band at mid-year review (incentive paid at new band). 25
Incentive Compensation Design and Value-Based Metrics (MACRA) Source: CMS Regardless of which path you choose (MIPS, APMs or Advanced APMs), medical groups are focusing on alignment of provider incentives with program incentives The simplest change is an increase in emphasis placed on quality and efficiency or cost metrics More advanced groups have 30% of compensation at risk today 26
Incentive Compensation Design % % % % AMGA thanks Roper-St. Francis in Charleston, SC, for sharing this information. 27
Incentive Compensation Design Some groups have chosen to give physicians some control over incentive measures In these models, we recommend you set the range weights by specialty (not individual) Discretionary components are subject to Department Chair or CMO approval AMGA thanks Valley Medical Group in Paramus, NJ, for sharing this information. 28
Transition from Efficiency to Cost Metrics Efficiency Increase in new patients or consults % of same-day clinic appointments % of on-time O/R starts Care coordination protocol compliance (especially managing inpatient LOS) Cost (Utilization) Utilization protocol compliance for certain imaging or procedures (measures backed by professional societies) Clinic staffing cost/staffing model within benchmark Budget met = incentive funded True cost measures are being implemented slowly While there are some safe harbors, cost goals should be reviewed/approved by legal (concerns of withholding care) Legal interpretations and risk tolerances vary by organization 29
Transition from Efficiency to Cost Metrics You can also consider goals relative to your past performance If more groups report to this survey, we can develop a richer database to help you 30
Re-Evaluation of Stacking Compensation AMGA Survey Definition In the Survey, Production-Based compensation sources Pay: are aggregated based on the definition Work RVUs x Median Conversion Factor Compensation per wrvu statistics are then calculated by AMGA For many types of compensation, it s already in there 31
Re-Evaluation of Stacking Compensation Effective Comp/wRVU Percentile APC Supervision Call Pay (Standard Call) 65 th? 62 nd? Quality / Patient Satisfaction / Efficiency 57 th? Production-Based Pay: Work RVUs x Median Conversion Factor 50 th Many groups start with median conversion factors and add on top, but that s not how the survey data works. 32
Alignment of Compensation within Medical Groups Some groups are still addressing variations in pay practices within the same specialty At a minimum, the goal is to address internal equity In other cases, there is a broader goal around setting minimum production standards After initial ramp-up, for how long can production below P20 be supported? 33
Compensation Out-Pacing Collections We also have the ability to benchmark based on collections Due to the popularity of wrvu, fewer groups report collections You should consider factors like schedules, access and new hires There could be millions of opportunity across specialties for a large group (improved efficiency, addressing those with production below P25) 34
Nurse Practitioners and Physician Assistants (APCs) 35
Base Salary: APCs 36
Prevalence of Value-Based Incentives: APCs 37
Subspecialty Level Data: Nurse Practitioner Primary Care and Surgical Number of Number of Group Provider 90th 80th 20th Standard Specialty Responses Responses Percentile Percentile Median Percentile Mean Deviation Nurse Practitioner Primary Care 159 3,616 144,916 128,731 108,520 93,495 112,250 28,462 Family Medicine 86 1,051 147,083 129,737 106,962 92,691 111,915 31,709 Family Medicine Branch 11 101 134,834 121,610 107,982 94,000 110,097 18,103 Internal Medicine 71 381 139,939 125,608 105,966 92,576 110,160 27,517 Pediatrics and Adolescent General 50 253 148,586 130,614 107,176 87,325 109,874 30,211 Nurse Practitioner Surgical Specialty 121 1,623 146,057 131,854 111,650 96,326 114,860 26,165 Anesthesiology 7 45 128,151 113,293 92,889 85,384 99,759 22,771 Anesthesiology Pain Clinic 7 15 138,222 131,272 109,307 100,710 116,898 19,413 Cardiac/Thoracic Surgery 16 35 165,970 135,028 111,521 100,833 120,922 31,440 Cardiovascular Surgery 15 28 162,461 150,495 115,207 109,256 125,825 25,766 Emergency Medicine 19 83 167,558 154,912 136,355 111,824 134,670 27,409 General Surgery 34 131 131,284 118,878 103,697 92,725 107,570 29,724 Neurological Surgery 27 70 153,645 132,805 108,569 94,019 113,327 29,139 OB/GYN General 59 291 147,657 128,487 108,596 91,967 111,049 29,193 OB/GYN Gynecology Only 8 14 128,341 119,355 111,494 93,123 107,933 16,057 OB/GYN Maternal Fetal Medicine/Perinatolog 5 12 116,385 110,244 98,883 89,513 100,151 10,898 Orthopedic Surgery 27 87 137,161 129,307 115,864 101,004 115,364 22,880 Otolaryngology 19 31 126,164 122,327 104,627 98,754 109,067 18,455 Pediatric Surgery 6 11 138,688 116,854 106,237 103,290 112,119 17,145 Trauma Surgery 10 34 169,019 151,187 123,236 105,462 131,516 35,294 Urology 26 48 138,166 126,905 104,653 93,245 106,917 24,447 Vascular Surgery 12 20 141,526 133,829 115,288 102,291 119,631 21,366 38
Subspecialty Level Data: Nurse Practitioner Medical Subspecialty Number of Number of Group Provider 90th 80th 20th Standard Specialty Responses Responses Percentile Percentile Median Percentile Mean Deviation Nurse Practitioner Medical Specialty 143 3,819 141,573 128,838 110,098 95,005 113,013 26,826 Allergy/Immunology 7 19 185,005 108,797 89,527 83,569 115,911 69,880 Cardiology Cath Lab (Invasive Interventiona 7 21 132,808 124,424 119,405 108,568 117,021 12,258 Cardiology General 50 323 134,654 122,673 107,752 95,167 109,505 22,656 Critical Care/Intensivist 8 78 173,026 162,862 132,345 102,747 133,338 37,147 Dermatology 23 42 185,261 166,840 134,950 113,215 142,957 41,382 Endocrinology 41 82 139,949 129,393 108,387 92,915 112,221 25,999 Gastroenterology 41 115 129,292 119,959 104,579 89,805 103,941 20,446 Hematology and Medical Oncology 35 172 140,669 128,151 111,778 92,320 111,976 24,766 Hospitalist Family Medicine 5 22 137,631 135,494 126,480 91,429 118,793 23,792 Hospitalist Internal Medicine 38 168 150,022 134,723 113,287 98,700 117,567 28,903 Hypertension and Nephrology 11 18 129,142 121,975 107,928 99,171 110,072 13,740 Infectious Disease 14 19 131,014 124,432 112,019 94,774 111,371 17,564 Medical Oncology 6 23 119,532 114,939 106,791 92,108 105,767 15,596 Nephrology Only 13 19 119,689 117,430 102,318 92,882 104,408 12,844 Neurology 44 127 137,281 125,004 105,854 89,347 107,970 25,856 Occupational/Environmental Medicine 16 27 128,630 126,004 110,172 99,688 111,828 15,543 Orthopedic Medical 6 21 131,644 126,969 111,742 99,577 110,734 27,395 Pain Management Non-Anesthesiology 12 25 125,481 123,357 109,540 100,637 111,166 18,438 Palliative Care 28 91 132,213 115,969 100,262 90,829 105,734 28,801 Pediatrics and Adolescent Cardiology 6 13 121,867 116,755 104,328 97,769 107,710 17,499 Pediatrics and Adolescent Gastroenterology 6 12 152,931 130,436 108,345 94,819 113,690 24,812 Pediatrics and Adolescent Hematology and 6 12 122,706 117,964 103,545 91,405 109,327 26,537 Pediatrics and Adolescent Neonatology 16 89 159,296 139,046 123,731 111,383 127,979 31,281 Physical Medicine and Rehabilitation 19 34 147,639 115,152 102,248 90,353 107,305 25,101 Psychiatry 20 78 152,202 138,078 111,159 92,970 112,801 30,600 Pulmonary Disease (With Critical Care) 20 37 134,011 124,050 111,419 95,735 110,485 19,091 Pulmonary Disease (Without Critical Care) 25 57 123,883 119,795 103,530 91,251 103,462 27,963 Rheumatologic Disease 12 15 119,564 115,837 104,026 101,079 107,764 9,128 Skilled Nursing Facility Physician 6 17 152,037 141,493 123,613 99,066 122,226 23,416 Sleep Lab 9 17 116,567 113,568 104,049 97,059 104,915 9,513 Urgent Care 45 253 153,124 135,317 113,096 94,481 115,949 33,941 Wound Care/Hyperbaric 8 22 131,634 131,108 103,308 95,411 109,775 27,880 39
Subspecialty Level Data: Physician Assistant Primary Care and Surgical Number of Number of Group Provider 90th 80th 20th Standard Specialty Responses Responses Percentile Percentile Median Percentile Mean Deviation Physician Assistant Primary Care 138 1,759 156,516 138,986 113,845 97,580 119,496 29,914 Family Medicine 71 623 160,064 140,006 114,912 97,148 121,078 32,454 Family Medicine Branch 9 64 137,696 129,289 110,918 99,478 115,412 25,895 Internal Medicine 45 176 144,118 132,627 111,986 99,582 116,670 28,529 Pediatrics and Adolescent General 16 34 155,332 141,603 118,306 99,671 120,903 27,224 Physician Assistant Surgical 133 1,995 160,679 146,553 121,782 103,883 126,299 29,620 Breast Surgery 6 10 120,205 115,309 108,181 99,884 108,156 11,653 Cardiac/Thoracic Surgery 18 89 185,077 172,535 143,755 115,969 147,013 34,570 Cardiovascular Surgery 13 46 190,855 183,746 156,830 131,750 156,205 30,992 Diagnostic Radiology (MD Interventional) 7 11 139,124 137,982 120,889 105,000 124,245 22,939 Emergency Medicine 16 132 172,066 160,533 129,820 110,462 134,065 31,681 General Surgery 45 187 142,253 130,961 114,403 103,157 118,331 28,161 Neurological Surgery 27 77 181,383 154,849 124,474 105,852 132,181 37,717 OB/GYN General 24 51 157,681 148,539 121,000 98,831 122,392 25,049 Orthopedic Surgery 54 339 158,358 146,046 124,931 109,189 130,059 29,619 Otolaryngology 23 40 173,519 157,540 120,129 99,050 126,497 31,380 Plastic and Reconstruction 12 20 136,663 124,231 117,450 93,035 113,912 16,737 Trauma Surgery 7 25 185,104 175,536 139,573 102,311 139,127 34,841 Urology 28 54 145,118 140,756 117,894 102,337 120,205 20,188 Vascular Surgery 15 25 149,036 140,852 108,000 97,433 124,408 40,815 40
Subspecialty Level Data: Physician Assistant Medical Subspecialties Number of Number of Group Provider 90th 80th 20th Standard Specialty Responses Responses Percentile Percentile Median Percentile Mean Deviation Physician Assistant Medical 128 1,827 153,673 134,534 112,281 98,499 119,246 33,185 Cardiology General 43 152 154,884 136,405 116,737 99,741 120,414 34,084 Critical Care/Intensivist 5 40 195,390 180,893 141,162 116,783 149,614 38,754 Dermatology 29 54 248,048 188,150 127,873 109,483 153,441 67,047 Endocrinology 14 34 114,554 112,148 103,917 93,543 102,789 11,466 Gastroenterology 28 71 131,547 122,803 104,590 96,815 110,941 23,441 Hematology and Medical Oncology 12 42 142,828 135,318 124,424 105,352 123,226 23,394 Hospitalist Internal Medicine 23 136 146,294 131,357 109,406 99,522 116,420 24,592 Neurology 22 47 135,902 126,588 105,092 91,525 112,160 30,299 Occupational/Environmental Medicine 16 45 152,380 140,470 118,679 107,070 122,500 19,455 Orthopedic Medical 10 22 177,516 142,020 110,302 98,562 118,272 36,689 Physical Medicine and Rehabilitation 8 14 121,290 113,387 104,653 98,961 106,336 10,838 Psychiatry 5 11 123,186 122,327 110,053 106,250 111,561 12,500 Pulmonary Disease (With Critical Care) 6 24 164,113 154,575 118,187 100,224 124,719 29,866 Pulmonary Disease (Without Critical Care) 17 25 114,309 112,333 102,283 88,623 100,755 20,611 Sleep Lab 10 17 113,506 111,374 106,392 102,105 106,882 5,384 Urgent Care 43 252 183,444 150,944 124,263 107,096 132,309 38,185 41
Nurse Practitioners and Physician Assistants In the current environment, tend to focus on having a model that is complementary to the physician compensation model May have multiple APC models: Providers who manage their own panel Those with more care coordination/navigation responsibilities Market movement towards adding value-based incentives, but at a slower rate than for physicians 42
Questions? whartley@amgaconsulting.com 612.615.1098 43