In the Becker's Hospital Review 5th Annual Meeting in Chicago, Jim Carr, partner at HealthcCare Appraisers and David DiLoreto, MD, chief clinical operations and innovation officer at Chicago-based Presence Health discussed trends and changes in physician compensation as the healthcare industry moves away from fee-for-service and towards fee-for-performance.
"Private practice physicians have a different outlook on compensation than employed physicians," said Mr. Carr. Private practice has shrunk and certain independent specialty physicians are seeing a decrease in physician pay. Employed physicians, however, have not seen as much of a decrease in compensation.
Most reimbursement models include a base salary with productivity and quality incentives. According to Mr. Carr, while the quality component percentage of reimbursement contracts has not changed much, the percentage of contracts including a quality component has increased. "Five years ago, 25 percent of employment contracts that came to our desks had some sort of quality component, but today, 75 percent or more have that component," he said.
Physicians also need to buy in to the quality measures for these new reimbursement models to work, said Dr. DiLoreto, but healthcare executives need to be careful when discussing this with them. Trust and transparency are extremely important when creating financial relationships with physicians. "Trust is the most important currency you have," he said. "You have to take the time to build that trust."
Looking to the future, Mr. DiLoreto says that transitioning to new reimbursement models will be rocky, however, how it plays out will depend on the future generation of physicians. These physicians will have different opinions on a number of factors such as work-life balance, technology and more. How they think will influence the transition, he said.
"Physicians just want to be fairly paid for the value that they provide and the risk that they are taking," said Mr. Carr.