De-Coding Components of Faculty Compensation January 29, Kyle L. Sharp, MHA, FACHE Interim Associate VP and Executive Director, OSU Faculty Group Practice Chief Operating Officer, OSU Faculty Group Practice Associate Executive Director, Specialty Care Network

Agenda 2 Elements of Faculty Compensation Examples FGP Benchmarks

Elements of Academic Medical Center Faculty Compensation 3 Your individual allocation toward these initiatives is driven from time assignment Academic Administrative Consulting Research Teaching Clinical Administrative Clinical Contract Teaching

FGP Benchmarks Used 4 Salary benchmarks for clinical departments segregated by academic rank Association of American Medical Colleges University Health Consortium Productivity benchmarks (wRVU’s) by specialty/sub- specialty Organizational Expectation – 75 th Percentile Faculty Practice Solution Center

Current Standard Measurement of Production: Work Relative Value Unit Time Pre-Service Intra-Service Face-to-Face Time (Evaluation and Management Cut-to-Close Time (Surgical) Post-Surgical Intensity Physical Effort and Skill Mental Effort and Judgment Stress and Risk 5

Why wRVU’s are Used as the Driver of Compensation  Medicare uses the RVU – resources needed to complete the work as the driver to determine the fees paid for the work  Since payors reimburse the Faculty Group Practice based on the Medicare framework, it is used on the foundation to measure physician clinical productivity 6

Academic Salary Funding Sources  Clinical Teaching Subsidy  Graduate Medical Education Support  National Institutes of Health and Other Research Awards o Private Foundation Grants, American Cancer Society, March of Dimes, United Way, etc.  Development Funds – Endowments, Specific Use, General  Strategic Reserves  Clinical Subsidy 7

Clinical Salary  Patient care revenue from faculty members’ clinical work  Contract revenue for clinical services (internal and external)  Each CPT code billed has associated wRVU value assigned by Medicare (CMS)  Dollar collected is not a dollar earned Billing fees Dean’s tax Direct expenses Overhead  Benefits University benefit cost approximately double of community benefit rate 8

Compensation Example 9 Dr. Fixer-UpTotal FTE 1.0Proposed Salary $100,000 Clinical FTE80%$80,000Provider wRVU’s Academic FTE20%$20,000Departmental Funds $100,000 Dr. Take-Care-Of-YouTotal FTE 1.0Proposed Salary $100,000 Clinical FTE Billable 20% Contract 20% Admin 20% 60%$60,000 Funding Source wRVU’s External Contract Medical Directorship Academic FTE Research 20% Academic/Teaching 20% 40%$40,000 $100,000