By Katrina Anderson, Senior Vice President, Product Strategy – Clinician Nexus
It’s time for a more efficient, scalable solution!
Managing physician and advanced practice provider compensation plans in large health systems can be a complex and time-consuming process, especially amid ongoing industry consolidation. Accurately managing a high volume of compensation plans and reconciling actual payments can lead to significant administrative burden when also considering the need to communicate and report out to the individuals assigned to each plan.
To help address this complexity, group-based compensation plans are emerging as a meaningful alternative as they offer a structured yet flexible approach to pay that can simplify administration while driving performance and collaboration.
What Are Group-Based Compensation Plans?
Group-based compensation plans reward teams or departments rather than focusing solely on individual performance. These plans can be based on shared productivity goals, quality metrics, patient outcomes, or a combination of factors. By tying compensation to group performance, large health systems can foster collaboration across specialties and align incentives with broader organizational objectives, such as value-based care or cost containment.
Key Benefits for Large Health Systems
1. Administrative Efficiency
With a high volume of clinicians, managing individualized compensation plans can be overwhelming. Group-based plans reduce administrative complexity by standardizing this process across teams or departments. This streamlined approach helps reduce the burden on HR and compensation teams to ensure greater consistency and accuracy.
2. Encouraging Collaboration
Group-based compensation tangibly inspires teamwork and cooperation across departments, which is critical for improving patient outcomes and fostering an integrated care model. Physicians and advanced practice providers are encouraged to collaborate on care delivery and drive performance improvements that benefit the entire team.
3. Alignment with System-Wide Goals
For large health systems that are looking to support the transition to value-based, group-based compensation can align every individual’s incentives with organizational priorities like quality improvement, cost-efficiency, and patient satisfaction. This ensures that compensation is not only rewarding individual effort but also the collective success of the organization.
4. Scalability
As health systems grow and acquire new practices or facilities, group-based compensation plans are easier to scale than individualized models. They provide a consistent framework that can be adapted across different groups and specialties, helping maintain cohesion in a large and expanding workforce.
Challenges to Consider
While group-based compensation plans offer several advantages, there are potential challenges as well. Establishing fair and measurable group metrics can be difficult, especially in diverse teams where individual roles and contributions vary. Steering management away from an environment that rewards individuals versus teams will take engaged leadership, patience, and ongoing communication. It’s also important to ensure that high performers feel appropriately rewarded and recognized for their contributions, even within a team-based structure, to avoid disengagement.
Conclusion
For large health systems managing a high volume of different compensation plans, group-based models provide an efficient and scalable solution that encourages collaboration and aligns incentives with organizational goals. As health care systems try to move towards team-based care and value-based reimbursement, group compensation plans are a practical and effective option to consider as part of a broader clinical workforce strategy.
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