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Future Compensation & Benefits Trends Presented By: 1 Steve Marsh, Managing Partner The Medicus Firm The Medicus Firm - founded in 2001 Offices in Atlanta & Dallas 38 Recruiters Nationwide Permanent placement of physicians, physician executives & advanced practice clinicians Vendor sponsor – GSHPSR Mr. Marsh – 23 years of healthcare recruiting experience
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Numbers to ponder & important concepts shaping future compensation The Easy Stuff: Facts on Primary Care & Specialty Income Trends The Tough Stuff: Future Compensation Trends Open Discussion / Q & A Agenda: 2
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A few stats to digest: 3 33% of physicians are over 55 yrs. old HHS predicts 268,000 of the 815,000 doctors will retire within the next 10 years March, 2015 - HealthLeaders Media cited the Association of American Medical Colleges’ recent projections of a shortage of 46,000 physicians by 2025. “That shortfall could hit 90,000 by 2025 if the healthcare sector fails to aggressively embrace & promote the use of non-physician clinicians…” Average hours worked for all physicians has decreased by 4 hours per week over the last 20 years – equating to 36,000 fewer FTE’s Currently 15,230 fewer primary care providers than needed
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Important concepts for future compensation The beginning….“Triple Aim” 4
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5 Care of the Provider Important concepts for future compensation “Quadruple Aim”
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6 Care of the Provider Burnout Dissatisfaction Imperils the Triple Aim Important concepts for future compensation “Quadruple Aim”
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Important concepts for future compensation “Value over Volume” 7
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8 Unanswered Question: How do you provide value/quality over volume, when volume is at an all-time high and expected to rise?
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Fee For Service Fee For Value Capitation Important concepts shaping Compensation Three Buckets of Reimbursement 9
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versus Fee For Value Capitation Important concepts shaping Compensation Three Buckets of Reimbursement 10 What’s the Difference? Fee for value model is designed to achieve savings through improvements to care quality and population health care Capitation was designed to restrict utilization of health care services
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Fee For Value Important concepts shaping Compensation Three Buckets of Reimbursement 11 Shared Savings Models / ACO Models Incentivizes providers to reduce spending for a defined population by offering a percentage of any net savings they realize Creates revenue on a fee for service basis, reconciled at the end of the year to calculate any “shared savings” that were realized. Incorporates quality measures that reward or penalize; most well known are measured by CMS
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Important concepts shaping Compensation 12 The goal of a good compensation model is to drive the right behavior
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Future Compensation Trends 13 Trend – def. – noun 1. A general direction in which something is developing or changing 2. Change or develop in a general direction
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Future Compensation Trends 14 Trend – def. – noun 1. A general direction in which something is developing or changing 2. Change or develop in a general direction
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The Easy Stuff - Primary Care & Specialty Income Trends 15
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2015 (2014) MGMA: $238,227 TMF: $239,000 AMGA: $239,968 Internal Medicine 2014 (2013) MGMA: $229,000 TMF: $231,000 AMGA: $254,477 16
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2015 (2014) MGMA: $264,838 TMF: $249,000 AMGA: $263,500 Hospitalist 2014 (2013) MGMA: $252,996 TMF: $245,000 AMGA: $265,351 17
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2015 (2014) MGMA: $221,686 TMF: $208,000 AMGA: $225,899 Family Medicine 2014 (2013) MGMA: $211,628 TMF: $201,000 AMGA: $243,318 18
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2015 (2014) MGMA: $226,162 TMF: $199,000 AMGA: $233,609 Pediatrics 2014 (2013) MGMA: $220,303 TMF: $191,000 AMGA: $248,832 19
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The Easy Stuff - Specialty Income Trends 20
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2015 (2014) MGMA: $245,673 TMF: $225,000 AMGA: $246,500 Psychiatry 2014 (2013) MGMA: $227,191 TMF: $217,000 AMGA: $244,003 21
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2015 (2014) MGMA: $269,936 TMF: $270,000 AMGA: $280,126 Neurology 2014 (2013) MGMA: $268,925 TMF: $253,000 AMGA: $283,601 22
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2015 (2014) MGMA: $504,492 TMF: $424,000 AMGA: $506,022 Gastroenterology 2014 (2013) MGMA: $510,671 TMF: $421,000 AMGA: $499,268 23
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24 The Tough Stuff - Future Compensation Trends
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Why such a cautious approach? 25 40% Greater Financial Rewards
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Why such a cautious approach? 26 38% Dissatisfied
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The Tough Stuff: Predicting Future General Trends 27 Primary Care Incomes rising steadily. High demand & pressure from exploding commercial market Pediatrics: Increasingly Challenging Specialty Incomes leveling off in most specialties PUD, GI & NEUR exceptions Cardiac specialties: small drop off in next 2 years, then a rise in 3-5 years
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The Tough Stuff: Predicting Future Pay Structure – Short Term (next 3 yrs) 28 Continued use of RVU model as predominant component of compensation One-time, fixed bonuses based on “quality.” Annual retention bonuses used more often. Careful “testing” of value based incentives - not as add-ons, but as replacement of traditional RVU volume models.
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The Tough Stuff: Predicting the Future Pay Structure – Long-Term (4+ years out) 29 Continued use of RVU model to measure volume Quality metrics in nearly all compensation plans as a factor to determine each individual’s “share of the pie.” Continued use of retention bonuses “Testing” phase over…value-based compensation firmly established as IT’s ability to measure value is honed, & reimbursement drives the model more dramatically
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30 The Tough Stuff – Predicting the Future Structure – In the long term
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31 The Tough Stuff – Predicting the Future Structure – an example Starting Base Salary/Income: Based on middle RVU range for the specialty & the organization Signing Bonus used if necessary to raise 1 st year Base Income; needs to be above the middle RVU range Quarterly “Provider Citizenship” Bonus: 10-20% of Base Salary is held back Paid based on measures like “professionalism”, “support for enterprise”, “patient satisfaction” Shared Savings Bonus: 8-25% of total Shared Savings revenue goes into a “provider pool” That pool divided based on RVU production “Internal RVU allocation” - RNP oversight RVU value
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32 Review & Conclusion Reimbursement Change is Here
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33 Review & Conclusion Compensation Change will Follow
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34 Review & Conclusion What is the Key Right Now? Carefully consider the impact before you make a compensation change Think like the doctor whose income is impacted You can always add to, or build up a compensation plan… It’s much tougher to rein a plan back (to lower pay) if you make a mistake. If you are on the forefront, or at the rear of the trend curve…know how to sell why you are there!
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35 Review & Conclusion What is the Key Right Now? Pray the Trends are Right
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36 Steve MarshJenni Trebon Managing PartnerRegional VP, Southeast smarsh@themedicusfirm.comjtrebon@themedicusfirm.com smarsh@themedicusfirm.comjtrebon@themedicusfirm.com 214-382-9925404-990-3610 DISCUSSION & Q&A
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