1. Who moved my cheese? The trials and tribulations of transitioning to a new compensation model Jennifer Lochner, MD Kirsten Rindfleisch, MD Beth Potter, MD University of Wisconsin – Madison Department of Family Medicine

2. Disclosures Nothing

3. Objectives Discuss what “Drives” us Discuss different compensation models Review our recent change in our compensation plan Discuss metrics used to monitor work Discuss unintended consequences of our new model of compensation

4. University of Wisconsin 4 residency clinics in and around Madison –1 rural, 1 suburban, 1 urban and 1 FQHC 42 residents 35 faculty who are part-time clinicians/13.9 FTE 9 Advanced practitioners/ 6.5 FTE Approximately 75,000 visits/year

5. Why should I spend time thinking about physician compensation? My colleagues and I did not go into family medicine for the money! Money is not our motivating factor!

6. Absolutely True! For higher level cognitive work, studies have demonstrated time and time again that using money as an incentive for more or better work is not effective…and can even result in poorer outcomes (see Daniel Pink’s book Drive or watch his TED talk)

7. BUT: In order for this to be true one does have to meet a certain minimal standard of fairness to both external (local competitors) and internal (faculty compared to each other) comparators

8. Imagine… A scenario in which the local market for family physicians has changed to such a degree that the new graduates of your residency training program are being hired with large signing bonuses and guaranteed base salaries significantly higher than any faculty member in your department earns…

9. WITH ALMOST NO CALL RESPONSIBILITIES!!

10. Result? Low faculty morale resentment frustration sense of injustice not feeling valued

11. Solution Revamp compensation plan with goal to pay our faculty: - an adequate amount compared to local external standards - via a methodology consistent with departmental and organizational values and that promotes internal fairness

12. Or, to use Daniel Pink’s words: Take money off the table and free people to focus on what they are passionate about.

13. Prior compensation system: Almost entirely based on wRVU productivity and charges generated. Small and uncoordinated bonuses for hitting a seemingly random assortment of quality measures.

14. Advantages? –Affordable for the department, tied to revenue generating activities –Used a simple measurement of work to differentially pay high salaries to those who generated more RVUs Disadvantages? –No compensation for non-face to face work –In today’s changing world of panel management and bundled payments it incentivizes activities that do not necessarily add value to patients and health systems.

15. Values behind faculty comp plan –Our University partners needed us to build our panels and wanted to incentivize this –Support the concept of a group practice across our 4 clinics –Transition away from the RVU as the only measure of clinical work; acknowledge panel management and non face-to-face care –Address the presence of residents in our clinics

16. Residency faculty compensation plan Pool of dollars available for compensation is based on the panel size of the 4 residency clinics pooled together – a simple dollar amount per patient These dollars are then split: 80% based on one’s personal panel size (assigned based on clinical FTE as a way to assign resident patients to faculty) and 20% based on one’s RVUs as a % of total RVUs

17. Residency faculty compensation plan Flat amount added for participating in OB and inpatient work ($12,000 per year for each) 5% withhold of these dollars to be distributed annually if department finances allow and basic citizenship expectations met (chart completion, participation in committees, etc.) 5% quality bonus on top of salary available – metrics this year are 2 patient satisfaction measures and 3 quality measures (2 preventive, 1 diabetes)

18. Metrics How do we measure work?

19. Old Metrics RVUs Charges Baseline half day rate for non-clinical activities

20. New Metrics Expected hours in clinic – face-to-face time Panel size Visits per template hour Template fill rate Quality bonus

21. Expected Hours in Clinic For 1.0 FTE –24 hours/ week if you are PCP do hospital work –27 hours/week if you are PCP and no hospital work –35 hours if you are not a PCP Significant angst amongst faculty with this change

22. Work in Clinic Visits/template hour – how long are your visits (minimum of 2.0 patients seen/hour) Template fill rate – measure of how busy your clinic (minimum of 85% fill rate) Just setting baseline standards

23. Panel Size We are expected to manage a panel of patients. Current goal is 1800 patients/physician –Driven by organization/insurance plan –Driven by ACO –Have not figured out the complexity piece Everyone has a “unique” practice

24. Quality Metrics set mostly by the organization –Wisconsin has a public reporting system Some ability to have input from each department in the medical school

25. Unintended Consequences

26. Metric Fallout hours in clinic visits/template hour template fill rate panel size quality bonus

30. uncomfortable conversations

31. their initial responses These other activities are a part of my job! –curriculum meetings –research phone calls –community collaboration –procedure workshops Feelings of resentment, frustration, burnout –my work isn’t being valued! –are we losing sight of our broader missions? –is this just about productivity? –the seed of an “us versus them” mentality

32. my initial responses Is the data right? Are we “bean-counting”? Why won’t they just take responsibility for bringing themselves up to standards? What am I doing wrong as a leader?

34. further dialogue further dialogue improved understanding improved understanding

35. improved understanding faculty have a “salary mentality” –they’re showing up to do good work everyday and most are not really worrying about how that work gets paid for faculty with a high proportion of fixed responsibilities have a hard time flexing their schedule to add hours –collaborative research or community work –high % clinical FTE

38. Visits per Available Template Hour

40. Visits per available template hour anticipated fallout penalizes faculty with medically and socially complex patients penalizes faculty seeing patients with interpreters penalizes faculty who think more face-to-face time with the physician is a critical part of patient-centered care

41. Template fill rate

42. 13% 14% 16% 11% It’s the no –show rate, right?

43. Template fill rate anticipated fallout penalizes faculty with a higher proportion of safety-net patients penalizes faculty who allow a higher percentage open access schedule

44. % to target panel

45. % to target panel anticipated fallout penalizes faculty with medically and socially complex patients –how can we better adjust for complexity? incentivizes faculty to keep their panel open, even if they have poor access metrics faculty bear the risk if a new faculty or advanced practitioner is hired anywhere in the group practice without an adequate panel

46. Changes in FTE/number of faculty/Advanced Practitioners –Every time anyone in the residency changes their clinical FTE (or we have a new hire) it affects everyone’s compensation because of the proportional way that panel size is allocated based on FTE

47. Minimally tied to revenue generating activities, may not be sustainable in our budget – currently no connection to RVUs

48. Quality dollars are being used as a carrot –Having negative impact on morale –No accounting for complexity

49. Positive outcomes thus far: –Overall increased salaries for our faculty –Viewed as fair per feedback –Current survey that is in process to measure satisfaction with the plan

50. Discussion Thoughts? What is happening in your practice around physician compensation?