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Physician Employment Current Compensation Trends and Considerations in Establishing FMV . Presented By Jim Carr, ASA, MBA | Partner Becker’s Hospital Review 5 th Annual Meeting May 16, 2014. Physician Employment Landscape. - PowerPoint PPT Presentation
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Physician EmploymentCurrent Compensation Trends and
Considerations in Establishing FMV
Presented By
Jim Carr, ASA, MBA | PartnerBecker’s Hospital Review 5th Annual Meeting
May 16, 2014
Physician Employment Landscape
• Massive wave of private practice physicians moving into hospital-affiliated practices over the past five years
• Some of the reported drivers of this trend include:• Reimbursement cuts• Lifestyle/focus on medicine• Hospital-physician alignment and formation of ACOs• Fear
• Trend has produced significant impacts to physician comp and practice economics
• Employers are starting to explore creative ways to address those impacts• Appraisers continue to assess the best methods to establish FMV in light
of these changes
2May 16, 2014 Physician Employment
Private Practice Exodus
May 16, 2014 3Physician Employment
2008 2009 2010 2011 20120.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
0.0
5.0
10.0
15.0
20.0
25.0
30.0MGMA Respondent Base
Perc
enta
ge o
f Res
pond
ents
Aver
age
Prac
tice
Size
Private Practice Exodus
May 16, 2014 4Physician Employment
2009 2010 2011 20120.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Cardiology
Anesthesiology
Radiology
Urology
GastroenterologyOrthopedic Surgery
Hematology/Oncology
Neurology
OB/GYN
Internal Med
Pediatrics
Shifts in Major Specialties
Perc
enta
ge o
f Res
pond
ents
in H
ospi
tal/
IDS
Prac
tices
Anesthesiology
May 16, 2014 5Physician Employment
2009 2010 2011 2012 $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Med
ian
Com
pens
ation
/Col
lecti
ons
% H
ospi
tal O
wne
d Re
spon
dent
s
All data presented extracted from MGMA’s Physician Compensation and Production Survey
Internal Medicine
May 16, 2014 6Physician Employment
2009 2010 2011 2012 $-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Med
ian
Com
pens
ation
/Col
lecti
ons
% H
ospi
tal O
wne
d Re
spon
dent
s
Medical Oncology
May 16, 2014 7Physician Employment
2009 2010 2011 2012 $-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Med
ian
Com
pens
ation
/Col
lecti
ons
% H
ospi
tal O
wne
d Re
spon
dent
s
Orthopedic Surgery: General
May 16, 2014 8Physician Employment
2009 2010 2011 2012 $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Med
ian
Com
pens
ation
/Col
lecti
ons
% H
ospi
tal O
wne
d Re
spon
dent
s
Orthopedic Surgery: Hip & Joint
May 16, 2014 9Physician Employment
2009 2010 2011 2012 $-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Med
ian
Com
pens
ation
/Col
lecti
ons
% H
ospi
tal O
wne
d Re
spon
dent
s
Interventional Cardiology
May 16, 2014 10Physician Employment
2009 2010 2011 2012 $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Med
ian
Com
pens
ation
/Col
lecti
ons
% H
ospi
tal O
wne
d Re
spon
dent
s
Radiation Oncology
May 16, 2014 11Physician Employment
2009 2010 2011 2012 $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Med
ian
Com
pens
ation
/Col
lecti
ons
% H
ospi
tal O
wne
d Re
spon
dent
s
Plastic & Reconstructive Surgery
May 16, 2014 12Physician Employment
2009 2010 2011 2012 $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Plastic & Reconstructive Surgery
Med
ian
Com
pens
ation
/Col
lecti
ons
% H
ospi
tal O
wne
d Re
spon
dent
s
Hospital/IDS Practice Economics
May 16, 2014 13Physician Employment
All data presented extracted from MGMA’s Cost Survey
Multispecialt
y
Cardiology
Orthoped
ics
Genera
l Surge
ry
Urology
Neuro
logy
OB/GYN
Gastroen
terology
Internal M
edicin
e
Family
Med
icine
Pediat
rics
-2,000,000
-1,500,000
-1,000,000
-500,000
0
500,000
Median Practice "Income" by Specialty
Median Income90th P Income
Annu
al In
com
e
Emerging Employer Responses
• Parting ways with significant under-performers• Removing salary guarantees for established physicians
• Pure production models
• Shifting from wRVU-based to collections-based incentives
• Implementing variable wRVU-based compensation• Using earnings-based incentives• Adding teeth to quality incentives
May 16, 2014 14Physician Employment
What Does This Mean for FMV?
• Market Approach – use of market “comps”• Is survey data reliable?
• Cost/Income Approaches – “revenue less expenses” models• Does this method really represent the market?
• Many compensation models are based on payment for service• How to incorporate shift to payment for quality
• Are FMV and commercial reasonableness becoming adversarial?
May 16, 2014 15Physician Employment
Physician EmploymentCurrent Compensation Trends and
Considerations for Establishing FMV
Presented By
Jim Carr, ASA, MBA | PartnerBecker’s Hospital Review 4th Annual Meeting
May 16, 2014
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