INFOGRAPHIC | Certified Registered Nurse Anesthetists: Compensation and Pay Practices

Detailed insight into CRNA compensation, pay practices, work effort and more

In addition to providing critical base salary and total cash compensation benchmarking information for this important subset of the APP workforce, SullivanCotter’s Advanced Practice Provider Compensation and Productivity Survey has now expanded to include detailed insight into CRNA-specific pay practices as well.

While CRNAs are vital members of this growing workforce, the unique nature of their roles includes key differences in work effort and premium pay practices when compared to other APPs.

View highlights from the 2020 survey results to learn more!

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WEBINAR | The Impact of the Changing Health Care Environment on Primary Care

Is your organization struggling to address the impact of COVID-19, changes to the Stark Law and updates to the Physician Fee Schedule?

Tuesday, April 27 |  10-11am CT

REGISTER TO ATTEND


Hosted by the American Association of Provider Compensation Professionals (AAPCP)

Prior to the onset of COVID-19, the changing reimbursement environment and transition to value-based care were impacting primary care compensation design and pay practices. Today, as health care organizations nationwide are navigating an increasingly complex operating environment, COVID-19 continues to place pressure on financial sustainability, patient access and population health management.

Combined with changes to the Physician Self-Referral Law (Stark) and updates to the 2021 Physician Fee Schedule and Evaluation & Management CPT codes, health care organizations are rapidly engaging in the redesign of their primary care compensation programs.

During this session, SullivanCotter will highlight relevant market trends impacting contemporary primary care compensation design and discuss evolving plan methodologies and approaches as organizations plan for the future.


WEBINAR | Optimize Clinical Resources to Support Population Health Management

Understanding the Strategic Impact of a Physician Needs Assessment

Wednesday, May 19 | 12:30-1:30PM CT

REGISTER TO ATTEND


Hosted by the American Hospital Association/Health Forum

Access to market-specific physician supply and demand data is critical as hospitals and health systems look to support growth, enhance value-based care delivery, and reassess cost and efficiency concerns.

Health care organizations must identify the right amount and type of physician specialties to operate effectively in the markets they serve with the goals of optimizing clinical performance as the focus on value-based care and population health management intensifies.

Learn how accurate and actionable data-driven insight can help hospitals and health systems to identify, monitor and respond to changing service needs and physician and advanced practice provider (APP) staffing requirements. Decide strategically whether to recruit, employ or affiliate to create a competitive edge in today’s rapidly evolving health care environment.

During this webinar, industry experts from SullivanCotter will discuss:

  • Partnering with Union Health on strategies to support expanded value-based care and population health management requirements
  • Evaluating the market-specific drivers that influence physician demand
  • Accurately pinpointing employed and affiliated market physicians by specialty
  • Leading practices and innovative approaches to inform physician strategy and alignment efforts to enhance performance
  • Creating a competitive edge by optimizing clinical resources

Case Study | The Key Role of Advanced Practice Providers in Today's New Normal

Featuring Stanford Health Care's Strategy to Heighten APP Integration and Engagement

As health care organizations nationwide continue to balance managing the immediate implications of the COVID-19 pandemic with planning for what lies ahead, many are looking to optimize team-based care delivery to help address emerging operational challenges, maintain financial sustainability, and meet evolving patient needs.

With the ability to direct patient care and generate revenue, advanced practice providers (APPs) are critical members of the care team and can play an important role in this transformation.

Featuring a case study published in AAPL's Physician Leadership Journal, learn more about how SullivanCotter partnered with Stanford Health Care to develop a comprehensive strategy and program to maximize utilization, support optimization and enhance engagement for its growing APP workforce.

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HFMA | Navigating Change: Implications of CMS's 2021 Physician Fee Schedule

Addressing the impact on physician compensation and productivity

Featured in HFMA's Financial Sustainability publication, SullivanCotter discusses changes to the 2021 Physician Fee Schedule and highlights challenges health care organizations and their financial leaders are facing as they look to address the impact on physician and advanced practice provider compensation and productivity.

Due to the magnitude of the changes within the final rule for the 2021 Physician Fee Schedule, organizations with productivity-based physician compensation plans must understand the implications of these changes and on payer payments, productivity levels, survey benchmarks and regulatory compliance.

Learn more about the short- and long-term impact of the changes and different approaches to consider as you move forward with 2021 compensation decisions.

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INFOGRAPHIC | 2020 Advanced Practice Provider Compensation and Pay Practices Survey

Representing nearly 20% of all practicing APPs nationwide

Advanced practice provider (APP) compensation programs are shifting to address changing market dynamics and mitigate the financial implications of COVID-19. Considering the current impact of the pandemic, the 2020 survey represents the best data reference point for use in the near future and can serve as a foundation for understanding specialty market positioning leading into COVID-19, pinpointing areas of focus for targeted compensation adjustments, and assisting with post-pandemic budget and productivity planning.

SullivanCotter’s 2020 APP Compensation and Pay Practices Survey contains data from nearly 700 organizations on over 84,500 individual APPs and represents nearly 20% of all practicing APPs nationwide. New in 2020, the survey now also reports expanded work effort data for specialty-based APPs, CRNA-specific pay practices and additional productivity data.

The 2021 survey is now open for participation. Don't miss your chance to submit data and gain access to exclusive APP compensation, pay practices and productivity data!

View highlights from the 2020 results to learn more - including base salary and total cash compensation, incentive compensation, premium pay and clinical productivity.

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INFOGRAPHIC | Benchmarking Resources for the Medical Group Workforce

Gain access to critical medical group benchmarking data for the entire health care workforce - including executives, physicians, advanced practice providers and other health care staff

This year more than ever, medical groups require access to critical data-driven insights as they look to address the impact of COVID-19 on workforce compensation and productivity, prepare for the 2021 Physician Fee Schedule changes, and balance the need for competitive total reward programs against pressure on operating margins.

Learn more about SullivanCotter’s growing suite of medical group benchmarking resources for all your workforce needs – including annual compensation data and incentive award opportunities for executives, detailed productivity reporting for physicians and advanced practice providers, and market data by organization size, region, state and more for other health care staff positions.

Our suite of 2021 health care compensation surveys are now open for participation! 

View highlights from the 2020 results to learn more about SullivanCotter's proprietary benchmarking data and resources available to medical groups.

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INFOGRAPHIC | 2020 Physician On-Call and Telemedicine Compensation Survey

One-of-a-kind survey providing rare insight into physician call-pay and telemedicine practices

As clinical care settings and practices continue to change in a rapidly evolving health care environment, many organizations are expanding or evaluating their physician on-call and telemedicine programs.

Designing effective arrangements to support this demand is critical, and starts with gaining access to the right data.

With nearly 300 participating organizations providing information on approximately 3,100 individual call contracts, this survey provides hospitals and health systems with the data they need to help address complex call pay issues, understand emerging trends in telemedicine, negotiate contracts and evaluate physician fair market value.

The 2020 survey report is now available for purchase! View highlights from the results to learn more.

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INFOGRAPHIC | 2020 Endowment and Foundation Investment Staff Compensation Survey

Featuring data from more than 50 not-for-profit organizations nationwide

This survey offers a comprehensive look into compensation and pay practices for investment staff positions among college and university endowments, private foundations, health care and other not-for-profit organizations. It also includes detailed insight into the chief investment officer position.

View highlights from the 2020 results, including average year-over-year increase in base salary for key investment positions, incentive compensation as a percentage of salary for the chief investment officer position, and investment office size by asset category.

Don't miss your chance to participate - the 2021 survey is now open! The final deadline to submit is February 26, 2021.

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INFOGRAPHIC | 2020 Health Care Staff Compensation Survey

Key considerations for the health care employee workforce during COVID-19 and through 2021 and beyond

Employee compensation programs are shifting to address changing market dynamics and mitigate the financial implications of COVID-19. Considering the current impact of the pandemic, the 2020 survey benchmarks represent the best data reference point for use in the near future.

Organizations have been impacted by the pandemic to varying degrees, so it is important that each organization analyzes their unique circumstances when utilizing this market data. Applying a holistic approach will allow each organization to consider future changes that are the best fit for their situation rather than an industry best practice.

SullivanCotter’s 2020 Health Care Staff Compensation Survey contains data from nearly 1,200 organizations on approximately 1,194,900 individual employees.

The 2021 survey is now open for participation!

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PRESS RELEASE | Annual results from SullivanCotter's Physician Compensation and Productivity Survey

Physician Compensation Programs Shifting to Address Changing Market Dynamics and Mitigate COVID-19 Financial Implications

November 11, 2020 – Chicago – SullivanCotter, the nation’s leading independent consulting firm in the assessment and development of total rewards programs, workforce solutions, and technology and data products for the health care industry and not-for-profit sector, recently released results from the 2020 Physician Compensation and Productivity Surveywhich represents data from more than 800 organizations on nearly 244,000 individual physicians and advanced practice providers. The results reflect calendar year 2019 and, as the last set of benchmark data available prior to the onset of COVID-19, this year’s survey will serve as an important resource for organizations needing pre-pandemic compensation reference points for this critical workforce.

“Although the pandemic has created a great deal of uncertainty – with many organizations making near-term modifications to their physician compensation programs as a result – we’re seeing a slow and steady adjustment to the ‘new normal’ as patient volumes have returned to approximately 90% of pre-COVID-19 levels. In some ways, the fallout from COVID-19 has simply accelerated the forces that were driving physician compensation changes prior to the pandemic, and the 2020 survey data will be very important in helping to determine how organizations are responding to these challenges,” said Tim Stamper, Senior Consultant, SullivanCotter.

Physician Total Cash Compensation (TCC)

While TCC has grown, on average, 2.5% annually since 2012, COVID-19-related reductions in surgical and non-emergent care have impacted the financial condition of many health care organizations nationwide – causing them to implement or consider a number of compensation and benefits-related modifications to help offset significant losses in revenue. According to SullivanCotter’s COVID-19 Physician and Advanced Practice Provider Compensation Practices Survey series, nearly 30% of participants had implemented or were considering pay reductions for front line physicians and nearly 40% of participants were doing the same for non-front line physicians as of May 2020. Median pay cuts were 11% and 15% for front line and non-front line physicians respectively. Other organizations made cuts in physician benefits in response to COVID-19. The most common benefit program changes in 2020 included eliminating or reducing retirement plan contributions, adjustments to PTO policies, and eliminating or reducing CME allowances. The majority of these actions were intended to be temporary and, as patient volumes continue to increase and organizations start to recover financially, many are returning to historical pay and benefits practices.

Due to the financial impact of COVID-19, physician incentive programs have also come under scrutiny in 2020. Among respondents surveyed in May, 16% of organizations reported eliminating or reducing non-productivity incentive compensation in 2020 while an additional 38% were considering this action. Many organizations pay out these incentives at year-end, making these programs an obvious target for cost-reduction.

Physician Productivity

The 2020 Physician Compensation and Productivity Survey results continue to show a trend of flat or even declining median work RVU (wRVU) productivity across all major specialty categories. Since TCC showed modest increases in the 2020 survey, TCC per wRVU ratios have also increased. While we have anticipated growth in value-based incentives, wRVUs and productivity-based incentives still determine the majority of incentive or variable compensation as a percentage of TCC. Approximately 70% of organizations utilize wRVUs to determine compensation for primary care and specialist physicians, with wRVU productivity accounting for about 18% of TCC in plans with a base salary component and over 90% of TCC in plans without a base salary component. Less than half (44%) of organizations surveyed include a wRVU component for hospital-based physicians, who are instead paid primarily on base salary and shift-based models.

As organizations focus their attention on maintaining patient access and minimizing the financial losses created by COVID-19, the emphasis on individual wRVU productivity will remain prominent. While the pandemic itself has had a sizable impact on patient volumes and physician productivity, the Centers for Medicare and Medicaid Services’ (CMS) proposed changes to the Evaluation & Management wRVU values loom large as organizations look ahead to 2021. These adjustments include an increase in wRVUs for most office-visit E&M codes due to added responsibilities physicians have absorbed over the last five years. As a result of the overall projected increased in wRVUs, a 10.6% reduction in the conversion factor was required in order to maintain budget neutrality. The proposed increase in wRVU values ranges from 28%-46% for established office visits, which will have a significant impact on compensation plans that use wRVUs as a determinant of compensation.

Considerations for 2020 and Beyond

Although COVID-19 has sharpened industry focus on supporting financial sustainability, other market dynamics and the timing of anticipated financial recovery are also influencing the way hospitals and health systems are approaching physician compensation in both the short and long-term.

“Considering the implications of COVID-19 in 2020 and the impending impact of wRVU changes in 2021, the 2020 survey benchmark data represents the best data reference point for use in the near future. With appropriate context, it can serve as a foundation for understanding specialty market positioning leading into COVID-19, identifying recruitment and retention risks, and pinpointing areas of focus for targeted compensation adjustments as your organization moves forward with 2021 planning,” said Dave Hesselink, Principal, SullivanCotter.

There are a number of important physician compensation considerations for organizations to assess as they continue to navigate the new normal:

  • Be mindful of how to appropriately use 2020 survey data. Understand the timing of the data and consider what you are trying to assess before using it. It can be helpful in benchmarking the competitiveness of compensation program elements and incentive opportunities.
  • Develop an approach to physician compensation now in response to CMS’ proposed wRVU changes. Organizations should be proactive in assessing how these changes will impact payer reimbursement and physician compensation programs.
  • With continued uncertainty regarding the impact of the pandemic in FY2021 and beyond, be prepared for new pandemic-related challenges to patient revenues and physician compensation. Organizations would be well-advised to have a plan developed in advance of any new restrictions on elective and non-emergent care to mitigate additional financial losses.

For more information on SullivanCotter’s surveys or the upcoming Evaluation and Management wRVU value changes, please visit our website at www.sullivancotter.com, email us or contact us by phone at 888.739.7039.

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, expertise, data and technology products to help organizations align business strategy and performance objectives – enabling our clients to deliver on their mission, vision and values.


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INFOGRAPHIC | 2020 Physician Compensation and Productivity Survey

Utilizing the 2020 survey data to assess the competitiveness of physician compensation programs and incentive opportunities

Physician compensation programs are shifting to address changing market dynamics and mitigate the financial implications of COVID-19. Considering the current impact of the pandemic and the impending wRVU changes in
2021, the 2020 survey represents the best data reference point for use in the near future.

With appropriate context, it can serve as a foundation for understanding specialty market positioning leading into COVID-19, identifying recruitment and retention risks, and pinpointing areas of focus for targeted compensation adjustments as you move forward with 2021 planning.

Learn more from SullivanCotter’s 2020 Physician Compensation and Productivity Survey - which contains data from more than 800 organizations on approximately 244,000 individual physicians and advanced practice providers (APPs).

The 2021 survey is now open for participation!

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business meeting with charts and data graphics overlay

INFOGRAPHIC | 2020 Manager and Executive Compensation in Hospitals and Health Systems

Considerations for using the 2020 survey data in light of COVID-19

As the last set of benchmark data available prior to the onset of COVID-19, SullivanCotter shares results from its 2020 Manager and Executive Compensation in Hospitals and Health Systems Survey. This analysis also includes insight into pandemic-related pay actions, important considerations for 2020 and beyond as organizations plan for what lies ahead, and using this year's benchmark data to help navigate future executive compensation decisions in light of COVID-19 and other market dynamics.

Now in its 28th year, this survey is the largest and most comprehensive of its kind for hospitals and health systems nationwide. Information was collected from over 2,200 organizations comprising 460 health systems and 1,800 hospitals and includes data for more than 42,000 individual managers and executives.

The 2021 survey is now open for participation!

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INFOGRAPHIC | Considerations for Addressing the 2021 E&M Work RVU Changes

Considerations for Addressing CMS' final changes to the 2021 E&M Work RVU Values


RELATED CONTENT:
ARTICLE | 2021 Evaluation and Management CPT Codes: Understanding the Impact on Physician Compensation
SullivanCotter's CPT Advisory Services and Technology Solutions


Following its annual review of the American Medical Association’s Relative Value System Update Committee’s recommendations, the Centers for Medicare and Medicaid Services (CMS) finalized proposed changes to the 2021 Physician Fee Schedule and has significantly overhauled the Evaluation and Management (E&M) code documentation requirements, time-effort recognition, and wRVU values for new and established patient office visits.  These changes were effective as of January 1, 2021.

As organizations look to understand the impact of these changes on reported physician productivity levels, it is also important to assess the effect it will have on physician compensation arrangements, fair market value and commercial reasonableness considerations, financial sustainability and national survey benchmarks.

Contact us or visit our CPT Solutions page learn more about assessing the impact of the E&M code changes within your organization.

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INFOGRAPHIC | APP Leadership Practices and Structures

Leadership Structures to Support Advanced Practice Provider 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 developing APP leadership structures to create comprehensive workforce strategies that focus on APP optimization, workforce planning, recruitment, retention, engagement and ensure alignment with physician workforce strategies.

Learn more from SullivanCotter's 2019 APP Workforce Practices and Structures Survey.

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ON-DEMAND WEBINAR | COVID-19: Impact on Physician and APP Workforce Strategies

Positioning Your Organizations for Success in the New Normal

View an on-demand record of this exclusive webinar hosted by the Health Forum/American Hospital Association - featuring data, insights and industry experts from SullivanCotter.

VIEW THE RECORDING


The impact of the pandemic has accelerated the need for strategic alignment between health systems and their employed and affiliated physicians and advanced practice providers (APPs).

As the industry begins to look ahead and plan for financial recovery and operational transformation, executive leadership should take this time to reassess their organization’s alignment strategies and affiliation models in order to identify key workforce and care delivery optimization opportunities.

Working in partnership with physicians and APPs, organizational leaders are evaluating ways to best position themselves to manage anticipated increases in volume, navigate the transition to value-based reimbursement, and support long-term financial sustainability.

During this webinar, industry experts from SullivanCotter will discuss:

  • Physician and APP alignment strategies during and beyond the COVID-19 pandemic
  • Key components for enhancing strategic alignment between physicians, APPs and health systems
  • Leading practices in physician needs assessments and key considerations for primary care team optimization
  • Emerging trends in physician and APP compensation
  • The utilization of physician feedback and emerging performance management tools to aid in the development of core performance expectation and incentive plan metrics


Case Study | Optimal Use of APPs Can Help to Enhance Post-COVID-19 Financial Recovery

Featured in the July edition of hfm Magazine

As hospitals and health systems plan for post-COVID-19 recovery and operational transformation, the focus on optimizing care delivery, lowering expenses and increasing revenue to ensure financial sustainability will be critical.

Enhancing the use of existing clinical resources can help to support these goals. As part of this effort, leaders should make it a priority to reassess the role of advanced practice providers (APPs) given their extensive training, broad skill sets and ability to adapt to different practice settings.

In their work with SullivanCotter, learn how Excela Health's efforts to optimize their APP workforce yielded millions in financial opportunity - proving valuable during their COVID-19 response and recovery plan.

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Modern Healthcare | 2020: Annual Executive Compensation Article

SullivanCotter helps to examine how health care organizations are adapting their executive compensation practices in response to COVID-19

As costs surge and revenue declines for health care organizations amidst the COVID-19 pandemic, many are re-evaluating their executive compensation programs as they focus on organization-wide equity, recovery and what lies ahead in such an uncertain environment.

Featured in an August 2020 edition of Modern Healthcare, SullivanCotter's Bruce Greenblatt and Tom Pavlik share data from SullivanCotter's recent COVID-19 research and highlight some of the key executive compensation changes being implemented or considered in response. This includes actions on base salaries, adjustments to current year incentives to account for the impact of the pandemic, and adjustments to future compensation programs and talent strategies to incorporate recovery considerations and ongoing uncertainty.

In order to focus on the need for financial sustainability, cost efficiencies and revenue growth, all of which have been accelerated by COVID-19, organizations should adopt a more flexible and fluid approach as they move into 2021 and beyond.

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PRESS RELEASE | SullivanCotter Launches Suite of Health Care Benchmarking Solutions

SullivanCotter Launches Innovative Suite of Products to Help Benchmark Health Care Workforce Compensation and Clinical Productivity

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July 30, 2020 – Chicago – SullivanCotter, the nation's leading independent consulting firm in the assessment and development of total rewards programs and workforce solutions for the health care industry and not-for-profit sector, is pleased to announce the launch of Benchmarks360TM. Powered by SullivanCotter's proprietary survey data and research, Benchmarks360TM is a suite of intelligent, web-based products that enables health care organizations to analyze and visualize workforce compensation and clinical productivity.

Designed to address enterprise-wide benchmarking needs for employees at all levels – including executives, physicians, advanced practice providers and other clinical and non-clinical staff positions – Benchmarks360TM provides critical industry-leading data, analyses and reporting to support the compensation decision-making process in an increasingly complex operating environment.

"Amidst a rapidly evolving global pandemic, hospitals and health systems are struggling to navigate a number of unprecedented financial and workforce challenges. Strengthening compensation practices and clinical workforce productivity through unique, data-driven intelligence and insights can help to support long-term sustainability in today's ever-changing marketplace. With the ability to conduct a wide variety of quantitative reviews and custom benchmarking analyses, Benchmarks360TM allows organizations to interactively assess clinical productivity and changes in compensation against national market data," said David Schwietz, Chief Information Officer, SullivanCotter.

As one of the most comprehensive products of its kind, it includes two distinct modules to help balance pay and clinical productivity across the organization:

Workforce Compensation and Clinical Productivity Manager

Compare your organization's compensation and clinical productivity benchmarks to the nation's largest health systems and medical groups. Utilize SullivanCotter's proprietary benchmarking information, representing over one million total incumbents, along with other third-party data sources. This module comes in both a Standard (offered with the purchase of SullivanCotter survey data) and a Pro version (upgrade available for additional licensing fee).

Clinical CPT Manager

Analyze and measure your organization's Current Procedural Terminology (CPT) coding distribution against national physician and advanced practice provider clinical benchmarks at the specialty, work RVU and CPT level. This module can be purchased and added separately.

Benchmarks360TM is offered exclusively to organizations who purchase SullivanCotter survey reports. To learn more, including important licensing information and a full list of features and functionality, visit sullivancotter.com/benchmarks360 or call 888.739.7039.

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.


PODCAST | Impact of COVID-19 on Physician and APP Compensation Practices

BESLER | The Hospital Finance Podcast®

LISTEN TO PODCAST

Zach Hartsell, Principal, discusses some of the results from SullivanCotter's 2020 COVID-19 Physician and Advanced Practice Provider Compensation Practices Survey on the July 29, 2020 episode of the The Hospital Finance Podcast® with BESLER.

Highlights of this episode include:

  • Background on SullivanCotter's COVID-19 survey series
  • How organizations are handling furloughs and layoffs during the pandemic
  • How cash compensation and benefits have been affected by the pandemic
  • What are organizations looking at in terms of salary protections and incentive compensation for physicians?
  • Some trends around redeployment and premium compensation for advanced practice providers

TRANSCRIPT

 

Mike Passanante: Hi, this is Mike Passanante and welcome back to the award-winning Hospital Finance Podcast®. Consulting firm SullivanCotter recently released survey results indicating that organizations are anticipating changes to physician non-productivity-based incentives in 2020. To discuss the study results, I’m joined by Zachary Hartsell, a principal at SullivanCotter. Zachary, welcome to the show.

Zachary: Michael, glad to be here. Thank you for inviting me.

Mike: Today we’ll be talking about the results of SullivanCotter’s COVID-19 Physician and Advanced Practice Provider Compensation Practices survey series. What were you looking at, specifically, in this survey? And who did you survey?

Zachary: Well, happy to discuss it, Michael. SullivanCotter has actually conducted two surveys on this topic, one in April and one in May. We conducted these survey to provide insight to our clients and to the market as to how organizations were responding to the pandemic from a workforce and total rewards perspective. Both surveys had over 100 participants, and we saw a 70% repeat in participation from the first to the second survey. Participating organizations had annual net revenue ranging anywhere from 400 million to 28 billion -  representing many of the largest integrated, academic and pediatric hospitals and health systems in the country. The goal of the survey was to understand the changes that occurred or are being considered as it relates to physician and APP compensation practices. When we think about compensation, we think not only about cash compensation, but things like incentives, premium pay, and benefits. We also wanted to understand what kind of compensation plan changes organizations were considering as a result of the different workflows in response to the pandemic, such as redeployments, closed clinics, etc.

Mike: Got it. So let’s dig into something you just said there. What are you finding organizations are doing in terms of furloughs and layoffs at this point?

Zachary: Great question, Michael, and something that we often get. Contrary to the attention-grabbing headlines, most organizations are not furloughing or laying off their employed physicians or advanced practice providers. In fact, less than 10% of survey respondents had implemented layoffs or furloughs. What we’re seeing in place of that is nearly half of the organizations are instead reducing physician and/or APP compensation or considering changes to benefit programs like retirement plans, CME, etc. For the minority of organizations who have looked at furloughs or layoffs, the consistent trend we are seeing is that organizations are focusing more on temporary furloughs rather than layoffs, which seem a little more permanent. Additionally, these changes are impacting the staff physicians and APPs more than they are the APP or physician leaders. When we look at organizations that have implemented furloughs, on average, the duration lasts anywhere from about three to four weeks. I will say, though, since our survey release, through conversations with our clients and media reports, we are seeing an uptick in the need to have, in some markets, more workforce actions like furloughs and layoffs due to the continued financial strain and the lack of patient volumes. But this really varies market by market and organization by organization. In our experience, it seems to be in part due to the pre-COVID financial health of the organization. I think this will be really important to monitor in the coming weeks and months, as we hit additional surges and/or volumes don’t return as projected. And if that were to happen, we could see an increase in the prevalence of furloughs and layoffs. Whereas if volumes return greater than expected, we are going to see more returning to work and even potentially new hiring.

Mike: That would be optimal. Zachary, how have you found cash compensation and benefits? How have they been affected?

Zachary: We’ve been seeing changes in the way organizations are handling compensation of their APPs and physicians as a result of COVID. But it’s not just the COVID pandemic, it’s also the economic fallout from that. And again, like with furloughs and layoffs, these changes are occurring with a lot of variability and are really dependent on the degree of disruption the organization has experienced and the pre-COVID financial health of the organization. Now, within this, we have seen some things that we expect, and we’ve seen some surprises. For example, one surprise was that we have not seen a lot of premium pay for physicians or APPs working in frontline areas with only 10% of organizations reporting that they’ve considered or have implemented premium pay compensation. This was something that we were expecting a lot more of. Compensation protection for physicians were expected, and we see them present. As of May, about half the organizations implemented or were considering temporary compensation floors - and this is for the non-frontline physicians. This is understandable given the continued loss of volume and the loss of patient revenue. Interestingly, though, while half of the organizations were protecting physician compensation, this number actually decreased from the April survey by about 10% - indicating that some organizations that may have offered initial protections had lifted those protections. Benefits are another area where we are seeing organizations making changes. In our May survey, about 35% had implemented or were considering changes to benefit programs such as reducing or eliminating retirement plan contributions, reducing or eliminating CME funds or time off, or reducing PTO time.

Mike: Zachary, let’s talk specifically about physicians for a moment. What are organizations looking at in terms of salary protections and incentive compensation for them?

Zachary: As I mentioned above, it really is dependent on whether they were frontline providers– and I mean ED, critical care, hospital medicine, or non-frontline. As we said, for frontline providers, we saw very little in the way of premium compensation. For the organizations that did use a premium, we have seen a bit of an interesting shift. Initially, those were all applied as a percentage increase to the shift rate. But as financial situations have evolved, the structure of those premium payments has changed to a one-time stipend or bonus. We talked about non-frontline physicians and about half of organizations having cash compensation protection for physicians experiencing a loss of shifts or productivity as a result of the decrease in elective procedures or non-emergent visits. When you break down the detail and you look at the scope of the protection, about 40% of organizations were providing about 100% of historical cash compensation protection, about 40% were protecting between 75 and 90 percent of historical compensation, and anywhere from 5-15% were protecting somewhere in the neighborhood of 50-75% of historical compensation. So there was a significant amount of protection being offered. As organizations begin a slow recovery out of the COVID crisis and as people start to think about how they reconcile the health system financial sustainability, I think that these compensation protections are going to be more in the limelight. As we said, organizations are starting to lift them a bit and I think as protections linger on, or market conditions create the need for subsequent protections, we’ll likely see that the increase of organizations requiring repayment of these – currently it’s about 22%. But as this continues on, we may see more and more organizations requiring repayment. One last thing to talk about with physicians would be the incentive component. And when we talk about incentive, nearly 40% of organizations plan to modify physician incentive plans for the remainder of 2020. When we talk about incentives, though, in this context, we are specifically talking about non-productivity incentives - things such as value-based incentives or the system-wide incentives that physicians are eligible for, not the productivity incentives that we spoke about earlier. Additionally, about a quarter of organizations anticipate making future changes to the physician compensation plan as a result of the fallout from COVID-19.

Mike: Zachary, the work of many advanced practice providers was affected by COVID-19. Tell us about the trends you saw around redeployment and premium compensation for those providers.

Zachary: Well, as we discussed earlier, Michael, this is really interesting to me, being an advanced practice provider myself. I think that this has really been one of the "aha" moments organizations have experienced as a result of COVID - and that is the value that the flexibility of the APP workforce. For example, 71% of organizations have redeployed or plan to redeploy their non-frontline APPs into frontline specialties. And I’ll tell you anecdotally, that’s not just the ICU or hospital-based units. But it’s things like COVID screening clinics, telemedicine, infectious disease, and pulmonary medicine clinics. A critical consideration for organizations looking to redeploy their APPs is ensuring that they’re redeploying the APPs with the right skill set. This is incredibly important and can’t really be overlooked. This is often best accomplished through performing an organization-wide skill inventory of your APPs. Other important considerations when thinking about redeployment include clarifying emergency credentialing policies, reviewing staffing plans, and providing training for new care delivery and documentation requirements. On the compensation side, about half the organizations have made reductions to cash compensation with the average reduction of approximately about 10%. While APP incentive programs are not as common as with physicians, in our survey, about two-thirds did say that they have incentive plans. This is higher than what we typically see. Our May survey indicated that about a quarter of them were modifying their incentive plans. When we break down the data, that was fairly evenly split between modifying the plan, reducing the plan, or eliminating the incentive opportunity altogether. I think what we’re starting to see now is organizations thinking about the future. In our May survey, about 15% of organizations anticipated making changes to future APP compensation, as a result of COVID-19, with another 47% unsure. As the pandemic continues and as there is more clarity around the financial situation post-pandemic, I suspect we’ll have more organizations making decisions about whether they will be making future changes to APP compensation.

Mike: Do you have any recommendations for organizations that are revisiting their compensation packages for physicians and APPs as a result of the pandemic?

Zachary: This really may be a crossroads for physician and APP compensation as COVID-19 will serve as a referendum on the traditional compensation programs. We imagine that there will be organizations who will use this disruption to escalate the movement away from productivity-based compensation to more performance-based compensation. I’ll tell you, though - there will be other organizations that will see this as an opportunity to double down on productivity in order to try to see a quick financial recovery. I think for all organizations the overall question is, “Can you afford to return to the old model? Or is this time of disruption a chance to reset using a different formula?” I think the challenge that most organizations will face is how to make these long-term decisions when there are still so many unanswered questions. "How long will the COVID disruptions last? What’s going to happen to telehealth and the payments? What impact will the rise of the uninsured be on organizational finances?" And something else that has not been discussed as much but will have a big impact is the impending CPT coding changes and how these changes will impact organizational finances and physician compensation in the future. As healthcare organizations attempt to plan for these uncertainties, there’s going to be a need for more efficient operating models. I think there’ll be some right-sizing of cost structures and the reassessment of organizational processes and structures to become a little more clear. I think organizations should be thinking about taking inventory as, “Do you have a clear and consistent base performance and work expectations for all of your physicians and APPs? Do you have physicians and APPs working at the top of their license and training and aligned with desired outcomes like patient access, throughput, and quality? Do you have a compensation philosophy and a model for physicians and APP that is aligned with organizational goals, that is equitable, externally competitive, efficient, and easy to administer?" And most importantly, "Is it understandable to the physicians and APPs?" A clear compensation strategy that is paired with a clearly-defined performance and clinical work expectations are the critical components that leaders can utilize to hold the clinicians accountable, differentiate performance, and in turn, compensation in the future. As the COVID-19 pandemic continues to evolve, we will continue to monitor the market and provide updates to the trends we shared here today. I think these trends are important to keep an eye on and for organizations to consider while they’re analyzing their own compensation plans and financial positions.

Mike: Zachary, if someone wanted to read more about the study results, where can they go?

Zachary: Go to www.sullivancotter.com and look under our resources page. You can also follow SullivanCotter on LinkedIn, where we regularly post compensation trends and insights related to COVID-19 and physician and APP compensation. Finally, I’m happy to answer any specific questions at zacharyhartsell@sullivancotter.com.

Mike: Zachary Hartsell, thanks so much for stopping by today and talking with us on the Hospital Finance Podcast.

Zachary: Thank you again, Michael. I appreciate the invite.