Page 35 - 0515_SAM_FINAL
P. 35
BUSINESS OF
MEDICINE
Productivity and efficiency are closely related. However, they case, “work,” rather than number of patients or billings, is the be-
are distinct from quality and service. A provider may be very pro- havior being measured and rewarded.
ductive and very efficient, but the quality of his or her work can
be very low. For example, if the provider sees 10 patients in two In 2007, the Medical Group Management Association’s
hours yet does so in such a way that none of the patients’ concerns (MGMA’s) Physician Compensation and Productivity Report in-
are addressed and the patients leave the visit feeling like their con- dicated that 16 percent of group practices used an RVU formula
cerns were not addressed, then the quality of the provider’s work to calculate physician compensation and productivity. This same
may be considered low, even though the productivity and effi- report also showed that 34 percent of physicians had their com-
ciency are high. pensation/productivity tied to RVUs. In MGMA’s 2010 report,
in comparison, 35 percent of group practices were using RVU
EXISTING MEASUREMENTS compensation/productivity metrics, and 61 percent of physicians
One traditional measure is the number and types of patient vis- had their compensation/productivity tied to RVUs.
its. The number and types of patient encounters says nothing In a similar study, the 2011 Review of Physician Recruiting In-
about the efficiency of the provider, so this measure is often ac- centives, by Merritt Hawkins, found that in 74 percent of the
companied by measures of time. For example, how many total physician search assignments it conducted between April 1, 2010,
hours did the provider work? How many hours were spent in di- and March 31, 2011, a salary plus a production bonus was the
rect patient care or on-call? Combining patient visits with meas- form of compensation offered to physician candidates. Fifty-two
ures of time allows for measurement of efficiency (visits per hour) percent of the searches featuring a salary plus production bonus
as well as productivity. based the production component on RVUs, rather than number
of patients seen, revenue generated, or quality and cost effective-
Another measure of provider productivity is dollars generated ness measurements. There are presently a plethora of RVU for-
to a practice. Traditionally this was measured by charges for serv- mulas being used in employment contracts for determining
ices rendered. With the prevalence of discounted fee-for-service, physician compensation. Frequently these formulas are compli-
collections may be a more accurate measure of dollars generated. cated, confusing, or even beyond comprehension.
This measure is also limited since it is highly dependent on the
patient’s type of insurance coverage. Two providers providing the A problem with tying physician compensation strictly on RVU
same services may generate entirely different collections for the production is that when insurer payments change or groups have
practice depending on the payer mix of their patients. a bad year with a negative operating margin, the model may not
be sustainable. For instance, for primary care providers, in addi-
Similarly, measures of time and patient encounters suffer from tion to RVU productivity, achieving benchmarks for management
the limitation that, conceptually, not every office visit or time of chronic diseases like diabetes or hypertension, patient satisfac-
period spent with a patient is the same. For example, an office tion, care coordination and other important functions must be in
visit for treating tinea pedis with topical therapy is not the same the mix. This concept is more important with the popular med-
as an office visit to evaluate and manage a patient’s complaint of ical home concept. Participation and contribution to the group’s
chest pains. Likewise, an hour spent providing critical care in overall strategic plan also should be rewarded.
the hospital is not the same as an hour spent counseling a patient
in the office. THE FUTURE AND MEASUREMENTS
Today, provider productivity and compensation are moving to- There are a variety of benchmarks that can be used to set goals
ward models based on Relative Value Units (RVUs). RVUs reflect
the relative level of time, skill, training and intensity required of and measure success in a medical setting. A benchmark is “a stan-
a physician to provide a given service. This is a method for cal-
culating the volume of work or effort expended by a provider in dard by which something can be measured or judged.” By com-
treating patients. A well-patient visit, for example, would be as-
signed a lower RVU than an invasive surgical procedure. In this paring a provider’s practice to a benchmark there is an
opportunity to:
• Quantify performance measures
• Quantify the gap between your organization and
“best practices” Continued on page 36
visit us at www.bcms.org 35
