1.What to Consider Before Moving from Entrepreneur to Hospital Employee
Sponsored by:
Northern Colorado IPA
June 16, 2011
Presented by:
Karen Zupko, President

2. www.karenzupko.com
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3. Objectives of the Talk
Explain the case for the growing trend of surgeons becoming hospital employees.
Offer insights into employment positives and pitfalls.
Describe the compensation models used most commonly to pay employed surgeons.
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4. Didnt We Do This Before?
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7. Hospitals Race to Employ Physicians: The Logic Behind a Money-Losing Proposition
Hospitals lose $150,000 to $250,000 per year over the first three years of employing a physician owing in part to a slow ramp-up period as physicians establish themselves or transition their practices and adapt to management changes.
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Source: NEJM, May 12, 2011
8. Hospital Viewpoint Why Is This Happening?
Surgical specialist support is the most profitable of inpatient and outpatient services.
Re-control ancillaries that were taken out.
Call coverage for ER, trauma center.
Competitive fears.
Create ACOs.
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9. ACO Fear Factor
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ACOS on hold as of May 2011
11. MGMA comments on ACO rules :
The Association expressed concerns over:
The complexity of the program that has already established a bias against medical group participation
The excessively high cost of both ACO development and ongoing operation relative to the potential financial benefits
The small and uncertain financial benefits
The substantial regulatory risks under related joint notices from CMS and the Office of Inspector General (OIG), and the Federal Trade Commission (FTC) and the Department of Justice (DOJ) that deal with antitrust and fraud and abuse enforcement.
Source: MGMA, June 1, 2011
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12. Physicians View Point:Why Be Employed?
Competitive fears
Uncertain reimbursement
Bundled payments
Over-leveraged practices
Decline in ancillary payments
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13. Top Five Reasons Physicians Want Hospital Alignment
Source: PWC 2010 Report
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Source: New York Times, May 30, 2011
15. Top Five Reasons Physicians Dont Trust Hospitals
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Source: PWC 2010 Report
16. As Doctors, What Do You Think?
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17. The Rugged Individualists
I really like my freedom.
Like running my own practice, my way.
Id rather die.
I was in the military that was enough group practice for me.
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18. The Pragmatists
It would depend on the contract details.
We may need to, to retain referrals.
If they made an offer we couldnt refuse sure wed consider it.
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19. Compensation and Benefits
Retirement Savings Options

403-B

or
more?

Cash balance

20. Profit sharing 21. 401K19
22. The Finish Line Insight
Im 60, I have little or no opportunity to sell my solo practice
I cant recruit
Im nearing retirement I have five years, so it makes sense
The pressures of practice the alphabet-thugs are harmful to my health
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23. Recruitment Grows Difficult
49%
Choose Hospital Employment
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24. Reality
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25. EMR
Hospital CIO
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26. How Good Are They At Running
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27. How Do You
I want OUT!
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28. Before Moving From Entrepreneur to Employee: Ask These Questions
Who are you working for?
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29. Strategic Irritants
What is the physician governance structure?
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30. Who Chooses Staff?
You cant mean she is going to be my (fill in the blank).
I dont want to see 60 patients a day.
This space in a word sucks.
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31. Compensation Issues for Employed Surgeons
Generally, physicians are compensated through production based models:

Revenue minus expenses

32. Base compensation plus incentive compensation (incentive compensation at risk) 33. Work relative value unit production (Know what the multiplier is!) 34. Incentives for quality, good citizenship, etc.29
35. Pay Based onRelative Value Units
Practice Expense
Physician Work
Malpractice Expense
+
+
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36. Whats the advantage to RVU compensation?
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37. Comp and Benes
That many RVUs? Sounds like a lot of work.
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38. 33
39. General Surgery
$33.9764
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40. Compensation Issues
How long can a too-good-to-be-true deal last?
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41. Physician Compensation by Hospital Ownership
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42. Physician Work RVUs (CMS RBRVS Method) (TC/NPP Excluded) by Hospital Ownership
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43. Compensation Issues for Plastic Surgeons
Base: Calculated how?Watch your assumptions about work RVUs.
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44. Compensation Issues for Plastic Surgeons
In-office ancillaries: x-ray.Procedure room? Aesthetician services? Products?
ASC ownership and revenue.
Or is your pay based on collections?
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45. Billing Competency Counts More Than Ever!
SURGICAL ANDSPECIALTY BILLING
FOR
DUMMIES
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What is their billing track record for specialty practices?Your speciality, in particular?
46. Compensation and Benefits
Are you required to take charity, Medicare, Medicaid and all other patients in your office practice?Are there any limits as to the number of these patients you are required to see?
Are actual collections and payor mix taken into account when considering your compensation?
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47. Compensation and Benefits
Is the comp plan blended and does it reward participation in governance, good citizenship, etc?
Is there special compensation for call coverage?
Can you earn a bonus?If yes, what criteria must be met?
Multiple Procedure RVUs?
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48. Leaving a Group?It Aint Easy
Who pays for tail coverage?
Is there a covenant-not-to-compete?
Penalties for short notification if you leave?

No ancillary buy out

49. No accounts receivable buy out 50. Charge for overhead43
51. If You Are Considering Employment, Do This Now!
Promise, NO DIY!
Count your 2010 and YTD work RVUs individually and as a group.
Evaluate any offer(s) before you send your info.
Clarify EMR usage!
Get your practice management act in shape.
If in a group, check your obligations.
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52. How Will This Story End?
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