Question

Give as much as information about following.

COMPENSATION FOR PHYSICIANS WITHIN MEDICAL GROUP PRACTICES:

There are different compensation models that are provided for physicians who work within medical groups. Compensation models are determined based on the regional market factors that allow the comparison of skills and experience for each physician. However, CEOs of different organizations can change the compensation packages for physicians.

Dr. Harry is a physician who has specialized on pediatrics. He has been a physician for 15 years and has 1200 patients. He is compensated by the salary plus incentive. This incentive model mandates that the benefits are determined by the number of patients that he has acquired in the past 15 years and gross billing bonus which is based on the quarterly billing. His contract can also be based on the annual billing. This model is also based on the net collections and quality factors which include his patient satisfaction rate, peer reviews, committee work, and administrative work. Dr. Harry is very pleased with the arrangements of the group practice and continues to do an excellent job.

Within the past month, the group practice has hired a new physician, Dr. Phillip, who has been in private practice within Internal Medicine for two years. He brings to the group practice 200 patients. He is not active in any committees, has no experienced any administrative responsibility, and has no peer reviews that have been documented, but good patient satisfaction rates.

Dr. Phillips has communicated to the CEO that he wants the same compensation as Dr. Harry has received. He feels that he has more training and certifications than Dr. Harry.

The CEO reviewed Dr. Phillips contract and explained to the physician that he was compensated on a different model than Dr. Harry.

The CEO also communicated that Dr. Phillips compensation is based on the income model. This model assists new physician income for a period of time. Generally it is for the first, second and third years so that the physician can build his practice. However, Dr. Phillips did not require this loan and was not legally mandated to accept.

Dr. Phillips sued the group practice for missed compensation. He maintained that he should receive the same compensation as Dr. Harry. The basis of the suit was unfair practices.

From your own understanding of this issue, discuss your own understanding of the case. Should Dr. Phillips win the case?

Please Use This Strategy When You Analyze A Case:

Identify the most important facts surrounding the case.

Identify the key issue or issues.

Specify alternative courses of action.

Recommend the best course of action.

Answer 1

Compensation models describe the earning potential of a physician based on several factors such as the qualification, years of experience, quality fators such as patient satisfaction and productivity of the treatment of outcomes.Since, Dr.Phillips has lost some of his compensation, there is high chance of him to get legal justice. Dr. Phillips is paid based on Income model which maens that he would be paid based on the amount of work and is fixed. But in case of Dr.Harry, since he is experienced and gets more patients and the quality of work is good, it justifiable to pay him based on salary plus incentive model. The key issue here is Dr. Phillips is not understanding the concept of these pay models. He could work for some years in this pay structure and after which he could switch to some other company for practice. If the physician has worked for extra hours, he has to be paid for it based on relative value unit (RVU). Relative value unit is a pay system which focus on time spent, expenses of the practice and the deduction from payment if any malpractice occured. If the company can add RVU plus fixed salary, it would be the best choice for Dr. Phillips based on the credentials he hold and the practice of his profession.