Aligning clinical workforce compensation strategies with quality and efficiency goals
Health care continues to evolve at a rapid pace as the industry seeks to maintain financial sustainability and transform operations in the wake of the COVID-19 pandemic and ongoing recovery efforts. This includes enhancing the quality of care, managing costs, improving patient access and satisfaction, and increasing physician and staff engagement to help achieve organizational goals. Market pressures are forcing organizations to develop new clinical capabilities as well as adapt their operations to perform more effectively under value-based reimbursement requirements. A key success factor in this evolution is the ability to align quality and efficiency goals with physician and advanced practice provider (APP) compensation strategies.
As pay practices continue to evolve, many organizations are looking to address the following questions:
- How can you ensure your compensation administration and performance management programs are engaging physicians and APPs in support of your cultural and organizational strategy?
- What tools and resources will help to enhance transparency in the reporting of performance to clinicians? How do these tools and resources help with recruitment and retention of the clinical workforce?
- What are the optimal communication, education and engagement processes to align performance around value-based metrics?
Utilizing compensation and performance management tools can help to improve the reliability of related data and calculations. Greater transparency also enhances the clinical workforce’s ability to understand the process and the results. Consistent measures, reporting, and expectations are foundational to building trust.
Clinician Nexus’ Dan Iliff recently answered questions on aligning physician and APP workforce performance — helping to uncover emerging trends, technologies and practices among high-performing hospitals, health systems and medical groups.
Why should health care organizations prioritize their compensation and performance programs?
DAN: Whether your organization is a single specialty independent medical group or one of the largest health systems in the country, success is reliant on the performance of your clinical workforce. As with any employee, in any industry, compensation and work expectations are two important variables. When appropriately designed and aligned, compensation plans play a vital role in helping to motivate this workforce and achieve organizational objectives. These variables are also important in clinical staff satisfaction and retention.
Physicians and APPs often express dissatisfaction when they do not fully understand their compensation plans, lack insight into how they are being measured, or do not have faith in the reporting system. This is becoming more common with the increasing prevalence of value-based pay components as well. This lack of transparency can leave them feeling disengaged and may contribute to turnover.
What are some of the common administrative challenges hospitals, health systems and medical groups are experiencing as they try to support the engagement and alignment of a growing population of physicians and APPs?
DAN: The way in which organizations measure and report physician and APP performance is often outdated and opaque. With a change in both the number and type of performance metrics being used, all of which help reflect a more balanced scorecard, compensation programs are becoming increasingly complex and difficult to administer. Physicians and APPs often find the data difficult to understand and hard to verify. For these reasons, many organizations are struggling to effectively engage their clinicians in new pay-for-performance models that now include value-based metrics in addition to traditional productivity components.
According to SullivanCotter’s 2024 Physician Compensation and Productivity Survey, the prevalence of value or quality-based incentives as a compensation plan component, which rewards performance on measures such as clinical quality, patient experience and access, is above 50% for both primary care and hospital-based physicians. This is only slightly lower for medical and surgical specialties at 42% and 45% respectively. While reimbursement models continue to evolve and organizations are focused on incorporating more complex value-based components into their compensation programs, many organizations lack the internal processes and systems to efficiently track and manage these metrics. With multiple sources of information, this process can be both tedious and time-consuming, especially given the limited number of personnel assigned to the task.
Today, organizations often track performance relative to these new quality metrics in large and unwieldy offline spreadsheets. Not only do these spreadsheets create problems with version control, but error rates tend to increase as teams manually sift through endless rows of data. With nearly 90% of spreadsheets containing mistakes, this can prove costly as these errors can have a large impact on critical compensation and reporting functions. Additionally, there are the added complexities of data capture and validation across an increasing number of physicians, APPs, and their associated sub-specialties – which sometimes adds to the distrust that physicians and APPs often experience with these types of measures.
How can technology be used to enable and provide greater value for your organization?
DAN: High-performing organizations are constantly evolving and must be supported with tools and technology that can evolve with them. Technology is a platform for change at a time when change is inevitable. By providing access to clear and concise performance data all in one place, technology can serve as a single source of truth that combines critical administration, reporting, and analytical capabilities into one system. The right technology can turn data into actionable insights, communicate goal definitions, benchmark performance, develop KPI reports, and automate a number of data-related functions — all of which help to build trust and instill greater confidence in the data and reported results. Greater transparency can also play a critical role in improving engagement and aligning physicians and APPs with the mission and vision of the organization in which they work. Moreover, technology will enable physician leaders to better focus their efforts where it really counts — actively managing and coaching the clinical workforce.
What are the most important things to consider when assessing how technology can better support your performance management and compliance program?
DAN: New tools and technologies can allow your organization to streamline an increasingly complex communication, compensation, and performance process by resolving inefficiencies in the way that data is collected, analyzed, and reported. When assessing how technology can support these changes, there are four key areas of functionality to consider:
- Performance management
- Productivity insights
- Compensation administration
- Contract lifecycle management
The first key area of functionality is performance management. Organizations must have a comprehensive system in place to communicate, measure, and drive performance while delivering actionable insights. Once the key drivers of performance are identified, this understanding can then be translated into action and ultimately lead to improved results. Organizations must also provide the tools and support to help physicians and APPs improve performance while being mindful of not adding undue complexity or setting unrealistic expectations.
Another key piece of functionality relates to productivity insights. As a result of constantly changing wRVU schedules, evolving compensation models, billing reconciliation and other changes, physician and APP compensation and performance administration is multifaceted. Technology that automates the revenue and productivity data collection and analysis component of this process will yield immediate time savings for physicians, APPs, and administrators. Additionally, it will allow physicians and APPs to better understand the reported data and have greater faith in the entire process. A system that allows you to review billing information in a central repository and assists with complex RVU functions such as sharing arrangements, scale conversion, modifier adjustments, and non-billable credit information will greatly increase the speed and accuracy of a multitude of productivity assessments. The consistency and transparency of the process will also build trust with the physicians and APPs and ultimately creates time and credibility for your team to dedicate to more strategic initiatives.
The third area of focus is compensation administration — or the communication of results. This is where a compensation program comes full circle through customized dashboards and reports that are tailored to individual providers and administrators. By integrating data on compensation earned from all sources for all physicians and APPs in a central repository, technology will help streamline the reporting process and get the right data into the right hands at the right time. The timely delivery of accurate compensation results to the clinician strengthens trust and improves engagement. Whether you are an administrator facilitating monthly settlements or a physician or APP monitoring performance on specific metrics, these dashboards are the key to success and will help to track progress against organization-wide goals.
Lastly, ensuring that physician employment agreements align with system-wide compensation terms and payments can be very challenging. Integrating an automated contract lifecycle management solution that will provide your organization with an accurate and comprehensive view of clinical employment contracts and obligations across the organization in real time helps to support compliance and ease of administration while also providing transparency and greater access to the clinicians.
The ideal technology solution brings all four of these components together to equip your organization with a more transparent, accurate, and timely view of individual, group, and system performance. Providing physicians and leadership with the information they need to reliably inform performance and drive desired outcomes is a must – a strong technology platform can help to achieve this. Similar to how EHRs revolutionized care delivery, a mature compensation and performance infrastructure can help to revolutionize how performance is measured and communicated.
What are the next steps for organizations considering the implementation of a new compensation and performance management system?
DAN: The specific actions your team should consider include:
- Identify key stakeholders through a holistic analysis of your compensation and performance program
- Aggregate and organize pain points across stakeholders to identify their root cause
- Acknowledge gaps in technology in order to meet the needs of all stakeholders
- Determine the functionality required to assess, analyze, and report on physician and APP performance
- Evaluate the technology options available and how respective platforms can help advance your organization’s performance management programs
Clinician Nexus’ Performance Suite is an industry-first, cloud-based solution that enables clinician engagement through transparent performance-based compensation administration, contract management, and reporting and analytical capabilities.
Utilizing best-in-class technology and decades of physician compensation and health care expertise, Performance Suite is designed to support organizations in the transition from volume to value.
Contact us to learn more!