Question

Mapleton Family Medicine Case Study

Mapleton Family Medicine is a physician group practice located in a small city (population 150,000) in the Midwest. Mapleton is an eight physician practice consisting of family physicians, internists, and pediatricians. The practice is owned by two of the physicians; the other six physicians are salaried. The owners are concerned with productivity and quality in the practice. The waiting time for appointments is relatively long, and a recent chart review revealed that the percentage of children who are up-to-date with immunizations has dropped. Also, anecdotal evidence suggests that at-risk persons are not routinely receiving fly and pneumonia vaccinations. Many patients have complained about having to wait up to 90 minutes in the waiting room. At his time, however, the practice is not in a position to hire another physician.

Each physician in the practice sees an average of 25 patients per day. The owners want this number increased to 30 patients per day without sacrificing quality of care. To reach this goal, they are thinking of moving to an incentive system whereby physicians have a base salary equivalent to 75 percent of their current salary and have the opportunity to earn up to 125 percent of their base salary if they meet defined volume and quality goals. While the owners have not completely through this system through, they want to set 30 patients per day as a base and, through the incentive system, encourage physicians to see, on average, up to 35 patients per day.

In terms of quality, the owners have considered three measures:

1. Patient satisfaction surveys
2. Child immunization audit data
3. Patient waiting times

Quality goals will be set biannually for each physician. The expectation is that physicians who achieve these goals will earn their full salary (assuming volume is adequate), and quality measures above these goals will result in bonuses according to a pay schedule.

Case Questions

1. You have been brought in to advise the owners on their proposed compensation plan. What advice will you give them before they proceed?
2. Do you see any potential negative consequences of this plan based on the information provided? If so, how will you address these concerns?
3. How do you think the physicians in the practice will react to this plan? Should they be involved in developing the plan, and if so, how should they be involved?

Answer 1

1. You have been brought in to advise the owners on their proposed compensation plan, what advice will you give them before they proceed?

The Mapleton Family Medicine practice is proceeding with productivity-focused pay-for-performance incentive and quality-focused pay for performance incentive. Productivity-focused pay for performance “seeks to maximize organizational profitability by tying financial incentives to individual employee productivity” Quality-focused pay for performance is used in which “programs reward activities and practices that are likely to improve healthcare outcomes, including increased prevention screenings, ensuring up-to-date patient vaccinations, investing in information technology designed to reduce medical errors, and consistently adhering to evidence-based medical guidelines”. The owners want to see improvement in productivity in which physicians are seeing more patients per day and they want improvement in quality factors in three areas which are patient satisfaction, immunization compliance, and decreasing wait times for appointments. Since they have multiple areas they want to improve it will important to tie incentives to each of the areas instead of as a whole. They will want to use piece-rate incentives. Piece-rate incentives “reward employees for each unit of outcome produced”. This will help keep the physicians focused on all areas to achieve targets and not just one or two. For example, if a physician only accomplishes meeting productivity they will get a small incentive for that but if they don’t meet on patient satisfaction they lose out on incentive.

2. Do you see any potential negative consequences of this plan based on the information provided?

Fried and Fottler state that quality-focused pay for performance can be expensive when implemented. “These costs can be considerable and may include designing new procedures, training employees on their implementation, and collecting data on process and outcome measures necessary to support the program’s reporting requirements”. Another issue with the plan could be dissatisfaction amongst the physicians. If the goals are set up to be overall for the office instead of individual goals for incentive then there may be discord in the relationships of physicians when one physician may not be performing well. If one physician is bringing down scores which inhibits the overall incentive of physicians there will be turmoil in the work environment.

3. How do you think the physicians in the practice will react to this plan? Should they be involved in developing the plan, and if so, how should they be involved?

Without input or buy-in from the physicians, I believe they are not going to be happy with this plan. The plan is to cut back their salary to a base salary which is 75 percent of their current salary. Even though there is an incentive to be had with the new plan I believe the physicians will be upset with the 25% cut in salary. While the owners are setting the goals to meet they are not providing the physicians with support on how they will do it. Is it a process or workflow issue? They need to identify the barriers of why these goals have not been met in the first place. This is where they need the physician's input in the planning process of this. The physicians should be involved in this decision making as this will help identify other areas of opportunity and will learn of the barriers and what is needed to be successful in meeting these goals. Most importantly for the success of the outcomes is to create SMART goals. A SMART goal is one that is specific, measurable, achievable, results-focused, and time-bound. It is a thorough communication tool used between employer and employee as it sets the expectation on what needs to be accomplished and how. Both employee and employer are involved to create SMART goals so that the employee can be set up for success and to work with the employer on barriers that may be identified during the process of creating the SMART goals.