The move from fee-for-service to value-based care in the healthcare industry has been gaining momentum and its ultimate adoption is now a foregone conclusion. The question is no longer if the switch will be made, but when it will finally be a reality. The implementation of MACRA is a huge step down the value-based road and organizations are scrambling to meet the requirements of the new law.
Hospitals and physician practices are making major strategic and tactical changes to ensure they can survive in the new environment and increasingly that means determining physician compensation by means other than strict productivity. Healthcare IT vendors are trying to adapt their systems to meet the data collection and reporting needs of the new compensation plans. For both vendors and organizations, meeting these needs remains a challenge.
Traditionally, physicians have been paid based on volume – the more revenue they generated, the more they earned. For hospitals and practices to survive as healthcare moves from volume to value, physician compensation needs to follow suit. Straddling between traditional fee-for-service or productivity reimbursement and MACRA quality goals creates short-term issues that must be linked to more lasting, long-term solutions.
Physicians will be resistant to any compensation changes that may result in diminished income so getting physicians to move into a new compensation plan can be an uphill battle. Moving physicians to accept new comp plans aligned with the value-based model may be particularly challenging.
Studies show that physicians tend to be highly individualistic, well educated, intelligent, highly skeptical and generally reluctant to relinquish responsibility. This is compounded by a strong confirmation bias where they are strongly influenced by any negative experience. This will make implementing any changes difficult.
For decades, the greatest proportion of physician compensation has been based on volume. The key going forward is getting them to be open to other measures such as behavioral economics, value-based care and understanding that they are part of a larger organization and may need to sacrifice some short-term gains for long term goals.
1. Make sure the data is available
The challenge to developing a revised comp plan lies in coming up with a model that aligns with the new reality. The old compensation plan was easy to manage: the physician’s salary was calculated as a percentage of revenue generated.
Coming up with metrics that will help drive behavior to meet value-based goals is simple. The difficulty is in being able to systematically collect and report the necessary data. Any new model that is created faces the same complications: what are you going to measure to calculate compensation, what data are you going to use, and how are you going to easily extract it. Before instituting any new compensation measures, make sure your IT systems can support them.
