Productivity-based compensation is often pitched to physicians as a fairer model — work more, earn more, with a direct line between output and pay.
Three physician leaders joined Becker’s to discuss how the reality is more complicated. Hidden overhead quietly inflates the denominator, work relative value units are set low enough that volume never fully translates to income and quality bonuses are structured in ways that rarely pay out.
The most common way productivity models disadvantage physicians, they say, is that the physician has no way to verify whether the math is being done correctly in the first place.
Question: What’s the most common way productivity-based compensation structures are designed in a way that disadvantages physicians?
Sudhir Bhaskar, MD. Gastroenterologist at Gastro Health (Orlando, Fla.): The employers fail to accurately divulge the real overhead — this could be the practice overhead, individual overhead or some other form of expense such as salaries of the common staff, a previous loan for the practice, etc. which will eventually result in less take home income, even if the model is based on productivity.
Sam Cady, MD. Cataract Surgeon at Maine Eye Center (Portland): Productivity-based compensation models (payment as a percentage of collections) should fairly represent a practice expense that compensates the practice for the risk they have in supporting a physician. Non-revenue-generating work (call, patient communication, teaching, administration, etc.) should be considered when arriving at a reasonable compensation model.
Rajiv Sharma, MD. Gastroenterologist and President of Mirage Health (Phoenix): RVUs are rigged to give lower units per RVU. It is so bad for physicians. RVUs are being manipulated by careless and unscrupulous employers. This is the worst way to practice. It’s a slavery model.
A lot of times they even “forget” to keep track of RVUs. MDs have no visibility here. Unless the system has transparency, good billing practices and has physician’s wellbeing in mind, RVUs will disadvantage MDs. Second is the quality bonus. It’s a mirage, a carrot that sometimes never actualizes. Or is rigged to ding physicians. Physicians need to have an audit right backed into the contract. Pay a good lawyer. Always ask “Who is in my wallet?” Build your own independent enterprise and create opportunities.
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