WEBINAR RECORDING | COVID-19: Managing Human Capital and Ensuring Sustainability

Hosted by the Health Forum/American Hospital Association

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Hospitals and health care systems across the United States face significant financial and workforce challenges resulting from the COVID-19 pandemic. As this situation continues to evolve, organizations will need to review compensation-related practices across their workforce to identify modifications required to support changes in deployment and organizational sustainability while also ensuring the wellbeing of employees and patients.

In this webinar, you’ll learn how health care organizations are adjusting their compensation practices and human capital strategies in response to COVID-19. We will present data from recent SullivanCotter research highlighting the impact of COVID-19 on related practices for executives, physicians, advanced practice providers (APPs) and other health care employees. We will also share SullivanCotter’s interpretation regarding how the human capital landscape may change key components of talent management and total rewards after the crisis subsides.

This session includes a discussion of:

  • Emerging workforce compensation practices that organizations have implemented or are considering implementing to help address the financial and operational issues related to COVID-19
  • Specific practices for physicians and APPs, such as premium pay for those on the front lines, salary guarantees for other providers, paid time off (PTO), redeployment, extra shifts and more
  • Specific practices for executives and other employees, such as emergency PTO, premium pay, deferring salary increases or implementing temporary reductions, revisiting incentive plans to reflect current situation, re-evaluating retention incentives and more
  • How changes in the regulatory landscape have already impacted or may impact decision-making around compensation practices
  • What the post-COVID-19 human capital landscape may look like

WEBINAR RECORDING | How COVID-19 Has Changed the Utilization and Deployment of Advanced Practice Providers

Cutting Edge Issues and Trends in Health Care Fair Market Value

Webinar from the American Health Law Association which features SullivanCotter's Trish Anen discussing the impact of COVID-19 on advanced practice provider (APP) utilization, deployment and compensation strategies.

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Length: 90 minutes
Level of Difficulty: Advanced
Price: $149

Description: Historically, physicians were the sole clinical provider for most patients across the country. Over the past few decades, the rise of nurse practitioners, nurse midwives, nurse anesthetists and physician assistants (Advanced Practice Providers or APPs) have expanded the concept of a clinical provider.

The COVID-19 pandemic has required health systems across the country to redeploy APPs in various ways and, as a result, many restrictions regarding APP practice have been waived.  This webinar focuses compensation strategies for these individuals and discussed the long term implications for the effective utilization of APPs.


team of physicians assessing medical data and health records

INFOGRAPHIC | 2021 Evaluation and Management CPT Code Changes

Assessing the impact of proposed CPT changes on physician compensation

Every year, the Centers for Medicare and Medicaid Services (CMS) conducts a comprehensive review of the Current Procedural Terminology (CPT) codes and the corresponding Work Relative Value Unit (wRVU) values to determine if changes are needed based on the time, skill, training and intensity necessary to perform the procedure.

As a result, CMS is proposing a significant overhaul of the Evaluation and Management (E&M) codes, which represent various types of face-to-face office or other outpatient visits for new or established patients, to be incorporated in January of 2021.

The majority of specialties utilize these E&M codes, and assessing the impact this may have on compensation and productivity is critical. In this infographic, SullivanCotter summarizes the proposed changes and addresses the following topics to help organizations educate themselves during this transition:

  • CMS efforts to recognize increased work effort for office visits as well as a summary of the 2021 changes
  • The potential impact on physician and advanced practice provider productivity levels and compensation arrangements - especially wRVU production-based plans or salary-based plans with wRVU performance measures
  • Other variables that could influence the assessment of your organization's productivity

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INFOGRAPHIC | COVID-19 Physician and APP Compensation Practices Survey

May 2020 - Market Response to COVID-19: Physician and APP Compensation

Health care organizations across the United States continue to face a number of unprecedented challenges due to the COVID-19 pandemic. As the crisis evolves and the industry makes plans for financial recovery and operational transformation, many changes are expected that will, in turn, affect the workforce and cause additional disruption in an already uncertain environment.

SullivanCotter’s COVID-19 Physician and Advanced Practice Provider Compensation Practices Survey series, which includes information from more than 100 leading hospitals and health systems, highlights the compensation and workforce-related actions organizations are currently implementing or considering in response.

We expect that workforce practices will continue to evolve. In order to keep health care organizations up to date on emerging trends related to COVID-19, we will monitor developments in real time.

Please note: Data reflect responses as of early May 2020.

You can also view the April 2020 data as a point of comparison.

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Quantifying the Cost of Advanced Practice Provider Turnover

Assessing the Financial Implications

Zachary Hartsell, DHA, PA-C, Principal, SullivanCotter
Amy Noecker, M.Ed., Principal, SullivanCotter


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The United States Department of Labor recently cited an unemployment rate of 3.7%, further noting that jobs in health care have increased by 403,000 over the past 12 months.1 This surge in health care jobs combined with historically low unemployment rates has made retaining workers more challenging. According to NSI Nursing Solutions’ 2019 National Health Care Retention & RN Staffing Report, the current hospital turnover rate across all jobs in the industry is at 19.1%.2 While turnover is the natural order of business in any industry, its impact on an organization - in cost, morale and work disruption - can be significant.

Turnover of physician and nursing staff has been studied extensively in both academic and commercial settings, resulting in a better understanding of their associated costs (see end of article for a list of additional resources). Turnover of advanced practice providers (APPs), however, lacks similar scrutiny. SullivanCotter’s 2019 Advanced Practice Provider Compensation and Pay Practices Survey Report cites an average external turnover rate of 10%, which is down from 12% in 2017.5 While a good amount of historical data exists for actual turnover rates, the cost of turnover has been difficult to report given a multitude of factors that must be considered.

To better understand the cost of turnover, SullivanCotter reviewed several organizational factors impacting turnover and developed a methodology for assessing the related costs. By providing organizations with a framework to perform their own APP turnover cost assessment, we hope this will help to improve the reporting of turnover costs in the future.

This white paper uses data compiled from the National APP Advisory Council’s (NAAC) Workgroup on Turnover as well as well as the following surveys from SullivanCotter:

  • Advanced Practice Provider Compensation and Pay Practices Survey Report
  • Advanced Practice Provider Individual Survey Report
  • Advanced Practice Provider Organizational Practices Survey Report

BACKGROUND ON APP TURNOVER

APP turnover can have a profound impact on patient care and provider satisfaction, and understanding both the causes and costs are imperative. While certain programs have proven effective in reducing turnover, such as formal onboarding programs, mentoring programs, and opportunities for advancement/career development, they often come with costs of their own.3,4

The ability to calculate the return on any such investment is essential in determining whether or not to invest in these programs. In order to be consistent, SullivanCotter recommends using a three-step process to evaluate the financial implications of APP turnover. This includes 1) examining the organizational factors that impact turnover, 2) assessing the related costs and 3) performing an APP turnover cost assessment.

TURNOVER: DEFINED AND CALCULATED

There are two kinds of APP turnover: external and internal.

External turnover occurs when an APP voluntarily leaves an organization. This is often to go to a competitor and may be preventable. Internal turnover occurs when an APP transfers to another service line or specialty within the same organization. This is more common for APPs than physicians given the structure of their certification and licensure.

While this article focuses on the cost of external APP turnover, internal turnover can also significantly impact an organization. While some degree of internal APP turnover is expected and can represent a retention strategy through the ability to offer career growth while staying at the organization, excessive internal turnover can suggest equity issues related to compensation, benefits or culture. A careful review of internal turnover, including interviews
with incumbents, can help to uncover what is driving the situation.

FACTORS THAT DRIVE EXTERNAL TURNOVER

There are several factors that drive external APP turnover. A commonly cited cause is compensation that is not aligned with the market. However, compensation is rarely the sole driver of APP dissatisfaction or turnover.

According to SullivanCotter’s research, there are several additional factors that impact APP engagement and turnover:

LEADERSHIP

  • Organizations that have a top APP leader with responsibilities such as developing overall APP
    strategy and infrastructure, managing budgets and serving as the expert on the APP workforce
    have 2% lower turnover than organizations who do not.5

    • Data from 180 organizations with 28,158 APPs.
  • APPs who report to an APP leader are about 8% less likely to consider leaving the organization in
    the next 12 months than those who do not report to an APP leader.6

    • Data from 6 organizations with 800 APPs.

UTILIZATION

  • APPs who feel maximally or significantly utilized are 22% less likely to consider leaving the organization in the next 12 months than those perceived to be underutilized.6
    • Data from 7 organizations with 891 APPs.
  • APPs who feel maximally or significantly utilized are more likely to recommend the organization
    as a good place to work than those perceived to be underutilized.6

    • Data from 7 organizations with 894 APPs.

PROFESSIONAL STATUS

  • APPs who have dedicated time for non-clinical activities, such as committee work, community outreach, leadership or administration, process/quality improvement work, research, and student education/faculty member, are about 17% less likely to consider leaving their organization in the next 12 months than those who do not have dedicated time for non-clinical activities.6
    • Data from 7 organizations with 496 APPs.

COMPENSATION

  • APPs who believe their compensation is fair or higher than peers are about 33% less likely to consider leaving the organization in the next 12 months than those who feel their compensation is not fair or lower than peers.6
    • Data from 5 organizations with 300 APPs.
  • APPs who believe their compensation is fair or higher than peers are more likely to recommend their organization as a good place to work than those who feel their compensation is not fair or lower than peers.6
    • Data from 5 organizations with 563 APPs.

METHODOLOGY FOR ASSESSING COSTS

To assess the cost of APP turnover, it is important to focus on known and measurable factors with a direct cost and  attributable dollar amount (e.g., recruitment, sign-on bonuses, training, etc.). Indirect costs, such as provider dissatisfaction, burnout and lost patient revenue, can vary widely by organization and are difficult to capture and calculate.

The elements below have direct costs related to APP turnover:

  • Moving allowance
  • Sign-on bonus
  • Recruiter time (e.g. hours spent per APP recruited)
  • Advertising
  • Physician time for orientation and onboarding with a new APP (e.g. hours spent per APP oriented that took time away from patient care)
  • APP time for orientation and onboarding (e.g. hours spent in non-billable orientation time)
  • Background check/drug screen and licensure verification

Based on SullivanCotter’s survey research and industry insights, the total direct turnover cost for a single APP ranges between $85,832 and $114,919.5,7 This estimate is consistent with data from both physician and nursing turnover research.8,9,10 Similar to research on physician and nursing turnover costs, the indirect costs associated with APP turnover are likely significantly higher than the direct costs. These indirect costs are often difficult to calculate given the different variables within each calculation.

Although the costs noted above are objective and quantifiable, the cost of APP turnover may differ from one organization to another. As a result, organizations should perform an individual assessment. When performing an assessment, the elements of turnover should be easily extracted or estimated and agreed upon in advance by executive stakeholders and the group charged with calculating the costs of APP turnover. To properly perform an assessment of the total cost of APP turnover, organizations must have the following information available:

  • Number of APPs working in your organization
  • External turnover rate
  • Headcount of the turnover rate (total number of APPs multiplied by the turnover rate)
  • Factors driving turnover (consider exit interviews and/or engagement surveys)

CONCLUSION

Understanding the related costs and their drivers is only part of the solution to reducing APP turnover. While the direct cost of turnover is calculated to be between $85,832 - $114,919, this is under-representing the full cost of turnover once indirect costs are included. Assessing how to address APP turnover, once drivers have been identified and costs have been calculated, can be even more challenging. This process requires determining what programs are apt to reduce turnover and, equally significant, the costs of those programs. Proposed programs such as postgraduate clinical training (fellowships), protected professional development, career ladders and onboarding should be evaluated for effectiveness and return on investment prior to widespread implementation. Additionally, APP leadership structures should be assessed because the presence of an APP leader has been shown to help reduce turnover.

There is an important cultural aspect to developing and implementing solutions that reduce turnover. It is essential to obtain feedback and buy-in from clinical leadership and additional stakeholder groups such as practicing physicians, practicing APPs, finance, human resources and operational leadership in order to implement long-term, sustainable solutions. Holistic current-state assessments are a good way to bring together key stakeholders and provide both quantitative and qualitative data to inform decision-making.

Additional Contributors:

  • Brenda Madura, MS, APRN, CNM-BC, Director of Advanced Practice Clinicians, Advocate Health Care
  • Cynthia Flores, PA-C, Senior Director, Advanced Providers, Vituity
  • Rhonda Hoyer, RN, MS, ANP-C, Director of Advanced Practice, UW Health
  • Surani Hayre-Kwan, DNP, MBA, FNP-BC, FACHE, FAANP, Director, Professional Practice and Nursing Excellence
    Sutter Health

SOURCES

1. Bureau of Labor Statistics. (2019). Current Employment Statistics Highlights. Retrieved from https://www.bls.gov/web/empsit/ceshighlights.pdf

2. NSI Nursing Solutions, Inc. (2019). 2019 NSI National Health Care Retention & RN Staffing Report. Retrieved from https://nsinursingsolutions.com/Documents/Library/NSI_National_Health_Care_Retention_Report.pdf

3. Kurnat-Thoma, E., Ganger, M., Peterson K. & Channell, L. (2017). Reducing Annual Hospital and Registered Nurse Staff Turnover: A 10-Element Onboarding Program Intervention. Sage Open Nursing, 3, 1-13. Retrieved from https://doi.org/10.1177/2377960817697712

4. Fibuch, E., & Ahmed, A. (2015). Physician Turnover: A Costly Problem. Physician Leadership Journal, 2(3), 22-25.

5. SullivanCotter 2019 Advanced Practice Provider Compensation and Pay Practices Survey Report

6. SullivanCotter 2019 Advanced Practice Provider Individual Survey Report

7. SullivanCotter 2019 Advanced Practice Provider Organizational Practices Survey Report

8. Misra-Herbert, A.D., Kay, R., & Stoller, J.K. (2004). A Review of Physician Turnover: Rates, Causes and Consequences. American Journal of Medical Quality, 19(2), 56-66. doi: 10.1177/106286060401900203

9. Schutte, L. (2012). What You Don’t Know Can Cost You: Building a Business Case for Recruitment and Retention Best Practices. The Journal of the Association of Staff Physician Recruiters, 19(3). Retrieved from https://member.aappr.org/general/custom.asp?page=696

10. Shanafelt, T., Goh, J., & Sinsky, C. (2017). The Business Case for Investing in Physician Well-being. The Journal of the American Medical Association– Internal Medicine. 177(12), 1826-1832. doi:10.1001/jamainternmed.2017.4340


APP Compensation Programs Shifting to Address Growing Market Demand and Changing Models of Care

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February 4, 2020 – Chicago –SullivanCotter, the nation's leading independent consulting firm in the assessment and development of rewards programs and workforce solutions for the health care industry and not-for-profit sector, recently released survey results indicating that advanced practice provider (APP) compensation programs continue to evolve as organizations recognize the roles APPs play in helping to achieve key organizational goals.

There are a number of key factors driving this shift in APP compensation and pay practices, including (1) the increased integration and utilization of APPs to help enhance access, quality, service and affordability in a value-based health care environment; (2) a need for APPs amidst a growing physician shortage; (3) clinical integration and new team-based models of care, which suggest a potential need for greater alignment between physician and APP rewards strategies and; (4) the rising prevalence of APP leadership positions and structures to support the effective management of this rapidly expanding workforceMany organizations are restructuring their pay programs accordingly as ongoing challenges in recruiting, retaining and engaging key APP talent requires a more competitive approach to compensation.

APPs are currently among the fastest growing segments of the health care workforce and, on average, comprise more than one-third of an organization's clinical providers.i As APPs move beyond traditional inpatient and outpatient settings, this growth is driven in part by increased utilization in new and/or emerging practice settings such as urgent care, retail-based and skilled nursing. An analysis of results from SullivanCotter's 2019 Advanced Practice Provider Compensation and Pay Practices Survey confirms the demand for APPs as participating organizations reported significant growth in this workforce. In fact, this growth exceeded yearly estimates by 7%. Similarly, actual increases in base pay continue to outpace expectations. In 2018, the projected average increase was 3.2% compared with an actual average increase of 4.8%. The actual average increase in 2019 was 4%, which is slightly higher than what was projected.

"The strong demand for APPs continues to be a significant trend and can place added pressure on an organization's staffing budget. Actual increases in base pay have been consistently outpacing projections for the past five years, and health care organizations must be mindful of the impact this can have on the bottom line - especially if APPs make up a significant portion of your overall workforce," said Amy Noecker, Principal, SullivanCotter.

As with physicians, APP compensation is evolving to reflect differences between major specialty categories – primary care, medical, surgical and hospital-based. While all categories have seen increases in combined nurse practitioner and physician assistant median total cash compensation (TCC, equal to base salary plus annual incentives) from 2017 to 2019, medical and hospital-based rates have seen the most growth at 5.3% and 5.0%, respectively. Primary care, up 4.6%, and surgical, up 4.4%, follow closely behind.

Additionally, incentives are becoming a component of APP total cash compensation as rewards strategies continue to evolve. Nearly half of participating organizations, at 48%, report utilizing incentive pay for at least some of their APPs. While this prevalence has remained steady year over year, median annual incentive amounts have increased across all specialty categories from 2018-2019. Despite having the lowest overall TCC rates, primary care APPs continue to have the highest reported median annual incentive amounts in 2019 expressed as both a dollar amount, $7,701, and as a percentage of base salary, 6.9%. As in past years, these incentive opportunities are predominantly structured as add-on dollars, 73%, rather than at-risk, 15%.

Clinical integration and the focus on new team-based models of care are also driving the evolution of APP compensation programs. "Although there are still some important differences in the design of physician and APP compensation programs, aligning rewards more closely to ensure complementary versus competitive team-based care delivery is important. As organizations look to establish and reinforce a clinical team-based mindset, many are considering a strategic restructuring of their APP compensation plans to reflect certain elements of physician pay programs," said Trish Anen, Principal and APP Workforce Practice Leader, SullivanCotter.

In 2019, 32% of APP incentive programs contained a team-based component. This prevalence has increased by 5% since 2017. Based on survey responses, most APP incentive plans are relatively simple, with 64% of organizations utilizing just one or two metrics. The most prevalent metrics selected in all practice settings are work RVUs, value/quality-based and patient experience. In an effort to better understand and track impact, the interest in APP productivity continues to grow as more organizations collect and report this information. From 2017-2019, there was a substantial 66% increase in the amount of reported work RVU data and a 26% increase in patient visit data.

Lastly, APP leadership compensation continues to evolve as organizations develop new positions and outline key responsibilities to effectively support the management of this growing workforce. As a result, a clear structure of leadership roles has solidified. In 2019, 58% of organizations reported having designated APP leaders. Of these organizations, 26% utilize a top APP leader. This typically represents one or two leaders dedicated to developing the overall APP workforce strategy. Annual TCC for these top APP leader positions falls between $155,527 and $212,850 (25th-75th percentile) and tends to correlate with the number of employed APPs.

SullivanCotter's 2019 Advanced Practice Provider Compensation and Pay Practices Survey Report  is now in its 8th year. With data from more than 560 organizations on nearly 74,000 individual APPs, this survey provides critical information on physician assistants, nurse practitioners and other certified providers across 127 different specialties. The survey includes insight into base salary, TCC, productivity, incentive plan design and other pay practices such as extra shifts, on-call pay, shift differentials, recruitment and retention bonuses, and more. For more information on SullivanCotter's surveys, please visit our website at www.sullivancotter.com or contact us by phone at 888.739.7039.

Don't miss your chance to participate! The 2020 Advanced Practice Provider Compensation and Pay Practices Survey is now open for submission.

About SullivanCotter

SullivanCotter partners with health care and other not-for-profit organizations to understand what drives performance and improve outcomes through the development and implementation of integrated workforce strategies. Using our time-tested methodologies and industry-leading research and information, we provide data-driven insights and expertise to help organizations align business strategy and performance objectives – enabling our clients to deliver on their mission, vision and values.


iSource: SullivanCotter 2019 Organizational Characteristics Database
Clinical provider includes: nurse practitioner, physician assistant, certified registered nurse anesthetist, certified nurse midwife, doctor of medicine and doctor of osteopathic medicine

INFOGRAPHIC | 2019 Advanced Practice Provider Compensation and Pay Practices Survey

Advanced practice providers continue to play an important role in transforming care delivery

To help meet the demand for providers and avoid potential disruption to quality, service and cost, many health care organizations are expanding their advanced practice provider (APP) workforces – including physician assistants, nurse practitioners and other clinicians. APPs are effective in helping to transform care delivery and achieve key organizational goals in the shift to value-based health care, and access to key compensation, performance and pay practices benchmarks for this growing provider group is critical.

View related highlights from SullivanCotter’s 2019 Advanced Practice Provider Compensation and Pay Practices Survey, which features data from more than 560 organizations on nearly 74,000 individual physician assistants, nurse practitioners and other clinicians.

Don't miss your chance to participate. The 2020 survey is now open!

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INFOGRAPHIC | Advanced Practice Provider Productivity

Learn more about emerging trends and data in advanced practice provider productivity

As health care organizations look for ways to improve patient access and control costs, effectively measuring and projecting the clinical productivity of their advanced practice providers (APPs), including nurse practitioners and physician assistants, is imperative.

View related highlights from SullivanCotter’s 2019 Advanced Practice Provider Compensation and Pay Practices Survey, which reports productivity data and ratios, including collections, work RVUs and patient visits, from 562 participating organizations.


From Volume to Value: Managing Provider Performance

Managing provider performance and compensation has grown increasingly complex.

Without the proper strategy, technology and resources to support this process, many organizations are struggling to effectively drive performance and engage physicians in the transition to value-based care.

To help uncover some of the opportunities for improvement, SullivanCotter facilitated a series of focus groups with hospitals, health systems and medical groups ranging in size from 500 - 2,000 providers.

Learn more about how Provider Performance Management Technology can help.

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INFOGRAPHIC | Unrestricted On-Call Pay for Advanced Practice Providers

Insight into on-call pay practices for Advanced Practice Providers

Advanced practice providers (APPs) continue to be an important resource as organizations strive to meet patient demand. Developing an effective on-call pay approach for APPs helps to increase patient access and support care coverage needs, and understanding the data and benchmarks regarding this premium pay practice is critical. This infographic highlights important unrestricted on-call pay trends and metrics including prevalence, thresholds, hourly rates for call coverage, compensation methods and important considerations in developing or updating your organization's related policies.

Learn more about SullivanCotter's Advanced Practice Provider Compensation and Pay Practices Survey, featuring data from more than 600 organizations on nearly 67,000 individual APPs.

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CASE STUDY | The Value of APPs in Driving Organizational Performance

Advanced practice providers (APPs) are one of the fastest growing workforces in health care.

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THE SITUATION

Advanced practice providers (APP) are one of the fastest growing workforces in health care. Not only has the APP workforce more than doubled in the last 15 years, but physician assistants and nurse practitioners are also ranked as the third and fourth best overall jobs in 2018 by U.S. News & World Report.

The focus on team-based care continues to intensify. In order to truly help transform care delivery, the role of APPs must be more clearly defined to better partner with physicians. Health systems and medical groups nationwide seek to drive better performance as the industry transitions from volume- to value-based care, and achieving the strategic goals of access, quality, affordability and provider satisfaction is a top priority.

As one of the top 10 largest children’s hospitals in the country and Arizona’s only pediatric quaternary care hospital for high acuity, complex conditions, leadership at Phoenix Children’s Hospital (PCH) recognized the need to utilize APPs more effectively to help transform patient care delivery.

Like many organizations, the number of APPs had grown swiftly and organically without a comprehensive strategy to support its sustainability. PCH realized that while they employed almost 100 APPs representing nearly $10 million in payroll, the lack of strategy had created obstacles regarding recruitment, utilization and job satisfaction. This left the organization unable to tap into the full potential of their rapidly growing APP workforce.

PCH partnered with SullivanCotter to develop a comprehensive workforce strategy to integrate, optimize and engage APPs in achieving the organization’s goals of increasing access, quality, affordability and provider satisfaction.

THE APPROACH

Senior leadership at PCH collaborated with a team of advisors from SullivanCotter to assess the utilization of their current APP workforce and developed a systemic approach to redesign care models and build the culture and infrastructure necessary to support the optimization of APPs.

Supported by decades of clinical and operational health care industry experience, as well as proprietary APP data on utilization, compensation and leadership structures, SullivanCotter provided unique insight into the evolving role of the APP and the challenges health systems and medical groups face when trying to utilize this workforce more effectively.

“Medical group, hospital and nursing executives must be fully aligned and work together
throughout the entire process to ensure the optimization and engagement of all team
members, including physicians, advanced practice providers, registered nurses and
medical assistants.”

Dr. Jared Muenzer, MD, MBA
Senior Vice President and Chief Operating Officer, Phoenix Children’s Medical Group

The approach included three phases: education and assessment, program design, and implementation.

A number of PCH leaders were involved throughout the process – including the CEO, CMO, COO of the medical group, SVP/CNO, Surgeon in Chief, executive general counsel, and physician and APP leaders. Physicians were also meaningfully engaged in the assessment and design and led the implementation efforts in their divisions.

To start, all APPs were surveyed to learn more about their current utilization and perception of the culture at PCH. Key policies were also reviewed to assess current practices compared to federal and state regulations as well as national trends and leading practices.

Findings from the initial assessment uncovered the following:

  • Only 42% of APPs felt they were being utilized to their maximum potential
  • APPs were performing many activities that could be completed by other team members such as RNs, MAs or social workers
  • Medical staff bylaws were more restrictive than state law or CMS requirements
  • Clinical privilege lists were out of date
  • There was no formal orientation program for APPs, though over 40% were hired as new graduates
  • APPs received limited education on documentation and billing
  • Multiple key stakeholders desired clarification on the NP and PA scope of practice

Using the findings from the assessment, SullivanCotter worked with PCH executives and physicians to develop a list of guiding principles. To help inform a comprehensive APP strategy, the organization determined it must:

  • Define models of care based on patient needs and clinical specialty
  • Ensure providers work to their full potential and support top-of-license practice
  • Bill based on service provider
  • Build a culture and infrastructure to support the utilization, retention and engagement of APPs
  • Measure progress to ensure sustainability and identify new opportunities for improvement
  • Develop a provider workforce plan that includes APPs in addition to physicians

Facilitated by SullivanCotter, these guiding principles were then used by multiple clinical divisions (cardiac surgery, CVICU, cardiology, emergency services, urgent care, orthopedics, urology, gastroenterology and transplant) to re-examine and redefine the role of APPs in patient care delivery.

Additionally, other project teams were enlisted to help ensure the continued optimization and engagement of the APP workforce. They focused on the development of new:

  • Leadership structures
  • Privileging and competency assessment (FPPE/OPPE) processes
  • Onboarding processes with clearly defined roles for preceptors and physicians
  • Documentation and billing education and guidelines
  • Marketing and branding approaches more inclusive of APPs

The progress of the clinical and operational implementation was monitored by an executive steering committee on a quarterly basis through scorecards for each committee and clinical specialty.

“This process has produced clear and compelling results to reinforce the idea that APPs can
help drive organizational performance and improve outcomes. This is critical in an emerging
value-based health care environment and is necessary to meet the growing demand for
highly-trained health care providers.”

Julie Bowman, MSN, RN
Senior Vice President, Patient Care Services and Chief Nursing Officer, Phoenix Children’s Hospital

THE RESULTS

The PCH leadership team understood that APPs were a valuable but underutilized resource and championed the optimization of this workforce as a key organizational strategy. This helped to improve access and health outcomes for its patients and achieve its goals for expansion and financial performance. Over a two-year period of redefining their care models and implementing the strategy, PCH was able to accomplish the following:

  • In orthopedics, a 197% increase in APP wRVUs with no decrease in physician wRVUs, and a 12% increase in surgeries (productivity and revenue) with no additional staff
  • In gastroenterology, a 50% increase in APP wRVUs with slight increase in physician wRVUs, a 31% increase in APP outpatient visits and a 9% increase in physician outpatient visits (productivity and access)
  • In urology, a 31% increase in APP wRVUs with slight decrease in physician wRVUs due to a decrease in physician FTEs, and over 250% increase in APP post-operative visits
  • In less than a year, reduced time to fill APP positions by 50% (down from 79 days to 38.5 days)
  • APP turnover decreased by an average of 47% since 2016
  • Implemented a comprehensive onboarding program for APPs that was also adopted for new physicians
  • Added APP representation to multiple medical staff committees

LESSONS LEARNED

As health systems and medical groups consider developing their own APP strategies to improve the way care is delivered in today’s evolving market, PCH’s model is transferrable to both pediatric and nonpediatric organizations. There are a number of key lessons learned from PCH’s journey for other organizations to consider.

The following guidelines are essential to the implementation process:

  • Ensure active participation and engagement from hospital, medical group, nursing and  executive leadership throughout the process
  • Identify physician champions early on
  • Care model redesign must focus on all team member roles, including physicians, APPs, registered nurses, medical assistants, care managers and more
  • Align physician and APP performance management, compensation and incentive plans
  • Ensure some early successes
  • Conduct regular key stakeholder meetings to provide updates on progress
  • Agree upon implementation plan and hold key physician, APP and service line leaders accountable

About Phoenix Children’s Hospital

Phoenix Children’s Hospital (PCH) is one of the 10 largest children’s hospitals in the country and Arizona’s only “Best Children’s Hospital,” ranked in all 10 specialties by US News & World Report. This includes a 433-bed acute care facility with 18 clinical divisions and six sites of care serving pediatric inpatient, outpatient, urgent care, emergency and trauma services. In 2015, Phoenix Children’s Hospital had 18,773 inpatient admissions, 80,514 visits to the Emergency Department, 237,514 outpatient visits, and 16,491 surgical cases.

In 2017, Phoenix Children’s Hospital received the Phoenix Business Journal’s prestigious HealthCare Leadership Award and was named to Best Companies AZ’s “100 Best Arizona Companies” list for health care. An internal survey placed the hospital in the 90th percentile for employee satisfaction.


HFMA | Advanced Practice Providers Optimize Efficiency and Improve Financial Performance

Advanced practice providers (APPs) play a critical role in transforming care delivery

With a looming physician shortage and an ever-increasing population of patients, access to primary care and specialty providers remains a chief concern for health care organizations nationwide. To help meet this demand and avoid potential disruption to quality, service and cost, many hospitals and health systems are rapidly expanding the number employed APPs.

To support the critical role APPs play in transforming care delivery, improving performance and helping to achieve key financial results, organizations must undertake a deliberate and strategic review of the scope of practice, care team role, levels of engagement, governance, and compensation and payment structures for all APPs.

Featured in a recent edition of the Healthcare Financial Management Association’s CFO Forum, learn how SullivanCotter partnered with Phoenix Children’s Hospital to develop a comprehensive APP workforce and utilization strategy aligned with organizational goals and objectives – helping to improve overall financial performance while enhancing patient access, quality of care, and APP retention and satisfaction.

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INFOGRAPHIC | 2018 Advanced Practice Provider Compensation and Pay Practices Survey

With the demand for advanced practice providers (APPs) on the rise, organizations are looking for better ways to attract, engage and retain the best talent.

As health care evolves, APPs play a critical role in helping to achieve greater access, lower the cost of care and address the growing physician shortage. Understanding trends in compensation, pay practices, productivity, work effort and more is critical as health care organizations develop comprehensive strategies to manage and utilize their growing APP workforce.

View highlights from SullivanCotter's Advanced Practice Provider Compensation and Pay Practices Survey, featuring data from more than 600 organizations on nearly 67,000 individual APPs.

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INFOGRAPHIC | APP Leadership Practices and Structures

Supporting APP retention and engagement

Advanced practice providers (APPs) comprise one of the fastest growing workforces in the United States and are integral to effective and efficient health care delivery.

Organizations are seeing the need for leadership structures and practices to help support this important workforce.

Looking to gain additional insight? Contact us to learn more about developing effective APP leadership practices, structures and compensation strategies to help support your growing APP workforce.

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Employers Choose Bonuses Over Raises

SullivanCotter Featured in the Wall Street Journal

In today's competitive talent market, organizations are looking for ways to attract and retain talent while controlling costs. The increasing use of incentives over traditional raises in base pay is trending across all industries. As health care organizations continue to focus on driving performance and enhancing organizational alignment, incentive compensation remains a key component of competitive total rewards programs. SullivanCotter was proud to contribute to this recent article, published in the Wall Street Journal, highlighting this shift in pay practices.

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Q&A | What Comes After Physician Compensation Design?

Developing physician and APP compensation plans

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As health care revenue sources continue to shift from volume to value and organizations take on more risk, new physician and advanced practice provider (APP) compensation strategies are emerging. The health care industry is adapting to new payment and care delivery structures with increasingly complex compensation models to match. Organizations must now consider a growing number of components when developing these plans, including recruitment, retention and engagement, patient satisfaction, access, quality of care, governmental regulations and more.

You’ve put time and effort into designing an effective physician compensation plan. How can you make your implementation equally transparent, accurate and successful?

SullivanCotter experts Dr. Mark Rumans, Chief Medical Officer, and Courtney Dutton, Principal, recently answered questions on physician compensation design and implementation - helping to uncover emerging trends and address the increasingly complex challenges health care organizations are facing today.

What are some common challenges organizations face when designing an effective physician compensation program?

CD: Organizations are dealing with a significant number of moving parts when it comes to physician compensation programs. There is both a regulatory environment that focuses on pure productivity and a reimbursement environment that is rapidly changing to focus more on cost efficiencies and value. Because of the proximity of these two realities, along with their varying degrees of complexity, health care leaders often feel like they are living in two different worlds. As organizations start to incorporate more value and quality-based metrics into their plans, physician alignment and engagement becomes more challenging. Historically, physicians have often been isolated relative to the strategic initiatives of the hospital, health system or medical group. But organizations are now recognizing the importance of aligning system-wide goals across all workforces – executives, physicians, advanced practice providers and employees – and must consider a shared vision between each when developing new compensation plans.

MR: It’s very difficult to make changes to physician compensation when the physicians (or the medical group) do not fully understand the reason for the change. Physicians are not always fully aware of all the financial pressures in today’s changing health care environment, and thus don’t understand why change is needed – especially if the physician group is happy with the current program. You need to be able to communicate what you are trying to accomplish and why, and explain how the new compensation plan is aligned with the mission, vision and values of the organization.

After identifying the need for change, the question many organizations struggle with is how far and how fast can you move at any one period of time? Organizations need to consider the gap between current and desired performance and, while they may have some aggressive goals, need to recognize that change to a compensation plan can only move so fast. Significant variation from the current state can cause disruption and unintended consequences if not carefully implemented.

CD: Another common challenge is that the health care industry has been slower to embrace many of the administrative technologies that support infrastructure change and enhanced reporting capabilities of major initiatives such as compensation programs. As a result, there is no clear line of sight for physicians to understand their total performance and how changes in performance can impact their compensation. Right now, physicians are relatively comfortable with the accuracy of their personal productivity as measured in work relative value units (wRVUs). However, as organizations incorporate non-productivity elements into compensation payment models, lack of confidence in the data as well as insight into its impact on outcomes creates challenges when trying to gain physician support for new compensation model.

MR: I agree. Physicians prefer compensation that is related to things they can control or influence - which makes having data points at the hands of a physician so critical. Physicians need a trusted reporting mechanism with accurate and timely data to help track how their actions directly impact their performance.

When you consider some of these common challenges in physician compensation, what key things do organizations need to think about in the design and planning process to help ensure a successful implementation?

MR: I cannot stress enough the importance of compensation committee member selection. Organizations need to include influential thought leaders on the compensation committee who are respected by their colleagues and who can effectively communicate the need for change. Ideally, your compensation committee should include a number of physician leaders who can set aside their personal and departmental compensation and consider the goals of the entire organization. Once your committee has been selected, laying out a framework for success and coming to agreement on what you’re trying to do and why you’re doing it is critical. This can be difficult at first because the committee will not likely have all the technical details about the new plan. Throughout the design process, there are four important things to keep in mind:

  • Define the need for change with respect to the shared vision of the organization
  • Select the process for change with consideration to what decisions need to be made
  • Decide who is going to make these decisions and what data is needed to support them
  • Define and begin implementation of a communication plan to providers

CD: Identifying strong physician leaders to champion the change is vital to success. These strong physician leaders need to have an active voice in the development of the compensation plan. Physicians have a front-line care delivery perspective and can speak to issues that may hinder or enhance the move to a performance-based compensation model. Physician leaders who serve on compensation committees need to take ownership of the plan, inform and educate the committee, synthesize data that pertains to the plan and champion the change within the physician workforce throughout the entire process (development, testing, rollout, implementation and annual review).

MR: As medical groups continue to grow, implementing compensation plan changes for groups with 200 or more physicians/providers is no longer an easy task. Imagine doing it with thousands of physicians! So, in addition to strong leadership, the compensation committee must also be mindful of the organization’s ability to implement a new plan from a “nuts and bolts” perspective. They need to assess what type of systems are required to implement the plan well before the plan has been approved. Working out the physical implementation of the plan well in advance of it going live has many benefits and allows you to course correct should there be any technical issues.

Additional questions to consider are:

  • What is needed from an IT standpoint to implement the plan?
  • What tools do we currently have and what is our capability in regards to reporting performance metrics to physicians in real-time?
  • How will comparisons of the current compensation structure to the new model(s) be communicated and what tools are needed to administer this change?

How critical is communication when implementing changes to a compensation program?

MR: Communication is as critical as the plan itself. Committees and administration need to develop a communication plan in tandem with the development of the compensation plan. The questions the compensation committee considers in the plan development will typically be the same questions asked later by providers. Anticipating these questions will help encourage plan adoption, drive engagement and serve as your roadmap to a successful launch.

CD: Building a communications plan at the beginning of a compensation redesign helps set expectations regarding the project’s timeline and identify the major milestones. Once the milestones are identified and agreed upon by the compensation committee, it is important to plan the frequency and mode of communication. Be sure to establish a process to allow for feedback and be flexible should changes need to occur based on that feedback.

MR: What you communicate and how frequently you communicate are also very important factors to consider. An ideal communications plan will allow for several “touchpoints” to share (on paper, in person and electronically) the basics: who, what, where, when, why and how. Equally important is clearly articulating who the decision makers are, and why, to ensure expectations are set as to how feedback will be used throughout the process. You can do some of this communication via email, but ideally your communications plan will allow (early on and throughout the process) for several one-to-one and oneto-many communication opportunities.

Consider the following opportunities in your communications plan:

  • Town Hall meetings
  • Lunch and Learn presentations
  • Dinner with your Chief
  • Monthly or weekly communication from the CMO and/or compensation committee
  • Online communication (such as a website that outlines the plan and process, stores important documents, Q and A and a managed chat room)

CD: Setting context is an important first step. Providing opportunities for physicians to understand changes in reimbursement and compensation structures and how market influences are impacting and/or apply to your organization is very important. Be prepared to explain your organization’s short-term and long-term strategy and what is driving the need for change. This is where physician champions are key. Allowing them opportunities to reinforce the need for change with peers lays the groundwork for physician engagement and involvement as opposed to a top-down approach when the message is delivered only by administration.

Once the compensation plan is developed and agreed upon, how can an organization drive provider engagement throughout the implementation and transition to a new compensation program?

MR: As new compensation plans are implemented, it is important for providers to have the opportunity to understand what the new performance expectations are and how a change in performance will impact their compensation. Give specific examples and allow physicians time to ‘shadow’ the new plan without any impact to their current compensation. During this shadow period, be able to show where there are gaps in performance and what changes are needed to mitigate any downturns. It is important that physicians understand the organization wants them to be successful and will work with them to understand and close any gaps in performance.

CD: During the shadow period, it is also important to communicate how the plan will be administered once it is fully implemented. This should include how often physicians can expect performance reports, the process for identifying data discrepancies and availability of subject matter experts that can address questions. Additionally, after the completion of the shadow period, many organizations implement a phase-in of the new compensation plan, which provides protection for providers with significant changes in compensation and allows for additional time to adjust behaviors and adapt to the new model.

What are some tactics (or examples) for increasing provider acceptance and support of proposed changes to a compensation program?

CD: Establishing a formal compensation review committee and governance process allows physicians the opportunity to present concerns or raise valid pushback/unintended consequences of the new compensation plan. This committee would be responsible for reviewing the plan on an annual basis to ensure continued alignment with system goals and strategic initiatives, recommending plan changes, reviewing non-productivity metrics and vetting provider or departmental requests for plan modifications.

MR: In addition to establishing a governance process, any tools that make the plan more transparent will help to generate more support. Whether it is a report or online dashboard, you need to how physicians how they are performing and how this relates to the new compensation model. There is often apprehension surrounding this process, and the fear of change is often more harmful than the change itself. Be sensitive to this and utilize as many tools as possible to help make the transition as smooth as possible.

Once the new compensation program is fully implemented, how do you sustain provider engagement?

Continued transparency is vital. The most successful systems allow for ongoing feedback on the program and continue to monitor the impact after it has been fully implemented. Don’t be surprised if subtle program changes are required. Small changes to the plan over time may help with overall adoption, so be open to the idea of ongoing engagement for long-term improvement. The governance and physician compensation committees, ideally staffed with both physicians and administrative stakeholders, are the best resources for plan development and adoption. They review the plan, identify outliers, and put into place policies and procedures to help support the values of the organization. There is a high-level of built-in trust with this model as those developing and implementing the plan  understand the unique complexities associated with being a physician.

CD: Along those lines, communicate that this is not a “once and done” plan. Physicians will have a greater appreciation for the plan and process knowing that there will be an ongoing review process and a willingness to make changes as necessary. Let physicians know that you understand the bigger picture and that as health care evolves, the compensation program will need to flex over time to align with these changes.

Why and how can technology be used to support this effort?

CD: Change is often perceived as happening too fast. Having the use of technology to enable that change, especially when it comes to communicating and administering the plan, is key to its success. In this age of viral communications, things can spiral out of control quickly. We cannot rely on wRVUs to improve performance, nor can we rely on spreadsheets as a way to communicate and administer physician compensation. To engage physicians and gain trust when tying new non-productivity measures to compensation, organizations need to provide them with one place to access clear and concise performance data.

MR: Being able to show physicians all the components that impact their pay is key. You need to be clear about how the plan is structured, what components are being measured, the goals of the organization, what is expected from providers, the source of your reported data and the actual compensation calculations. Technology can provide a platform that is both accurate and transparent – allowing people to really see and understand how their compensation is tied to value. Many organizations are now accessing and assembling compensation data from multiple different systems, which is timeconsuming and can lead to human error. Data-driven technology transforms a lengthy and arduous process into one system that provides actionable insight and allows physicians and their managers to see as much or as little information as they want. This level of transparency creates an opportunity for course correction if needed.

CD: A strong technology platform can really act as the cornerstone for change. Just as EMRs have improved patient care, diagnostics, patient outcomes, and practice efficiencies, provider performance technologies can support organizations in the transition from volume to value by aligning pay with performance and serving the diverse needs of leadership, administrators and physicians.


SullivanCotter’s Provider Performance Management TechnologyTM

Provider Performance Management TechnologyTM (PPMTTM) is a market-leading, cloud-based solution that enables provider engagement through transparent performance-based compensation administration and analytical capabilities.

Utilizing best-in-class technology and decades of physician compensation and health care expertise, PPMTTM is designed to support organizations in the transition from volume to value. PPMTTM is offered as part of a comprehensive portfolio of advisory, information and technology services to address client needs.


INFOGRAPHIC: 2017 Advanced Practice Provider Compensation and Pay Practices Survey

The role of the advanced practice provider (APP) is changing to reflect increasing specialization and variation by practice setting as care models evolve. Hospital-based roles continue to grow, primary care practitioners are starting to function more independently, and roles in medical and surgical specialties are helping to improve patient access and efficiency of service lines.

This diversity of roles means a 'one size fits all' compensation model is no longer effective and can create obstacles to delivering high-quality and effective care.

As the demand for APPs continues to grow, compensation strategies should be tailored to align with overall provider optimization and organization strategies.

Learn more and view highlights from the 2017 Advanced Practice Provider Compensation and Pay Practices Survey.

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Infographic: Spotlight on Advanced Practice Provider Compensation

Advanced practice providers (APPs) remain one of the fastest growing workforces in health care, and their role in transforming care delivery has expanded as focus on team-based care continues to increase. Understanding trends in APP compensation and pay practices is a key step in attracting, engaging and retaining this important provider group.

Our 2017 Advanced Practice Provider Compensation and Practices Survey is currently open for participation. This survey provides critical benchmarking data on physician assistants, nurse practitioners and other certified clinicians across a number of emerging specialty areas.

Learn more about this survey and register to participate.

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Compliance Risk Considerations with the Integration of Advanced Practice Providers

As the focus on team-based care intensifies, advanced practice providers (APPs) remain one of the fastest growing segments of the health care workforce. The role of the APP in transforming care delivery is critical, and health care organizations nationwide continue look for better ways to meet their goals around access, quality, service and affordability.

Featured in the American Health Lawyers Association's (AHLA) Health Care Transactions Resource Guide, SullivanCotter examines three regulatory requirements that must be met to help ensure compliance and mitigate risk when integrating APPs into the care delivery team:

  • Evaluation of APP competency standards
  • Third-party payer policies as they relate to billing for services provided by APPs
  • Appropriate attribution of APP work effort in production-based physician compensation plans

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Infographic: Integrating Advanced Practice Providers

Ensuring Compliance and Mitigating Risk

The demand for advanced practice providers continues to grow, and health care organizations nationwide must understand how to effectively integrate, optimize and engage this increasingly important provider group while operating within the framework of federal and state laws, regulations and accreditation standards.

Learn more by reading the full article - featured in AHLA's 2017 Health Care Transaction Resource Guide.

 

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