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Transcript of Physician Employment Current Compensation Trends and Considerations in Establishing FMV Presented By...
Physician EmploymentCurrent Compensation Trends and
Considerations in Establishing FMV
Presented By
Jim Carr, ASA, MBA | PartnerBecker’s Hospital Review 5th Annual Meeting
May 16, 2014
Physician Employment Landscape
• Massive wave of private practice physicians moving into hospital-affiliated practices over the past five years
• Some of the reported drivers of this trend include:• Reimbursement cuts• Lifestyle/focus on medicine• Hospital-physician alignment and formation of ACOs• Fear
• Trend has produced significant impacts to physician comp and practice economics
• Employers are starting to explore creative ways to address those impacts• Appraisers continue to assess the best methods to establish FMV in light
of these changes
2May 16, 2014 Physician Employment
Private Practice Exodus
May 16, 2014 3Physician Employment
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
Physicians 0.5114 0.4596 0.407 0.4105 0.3896
Hospital/IDS 0.3442 0.4306 0.4711 0.4917 0.5426
Other 0.1444 0.1098 0.1219 0.0978 0.0678000000000001
Average MDs/Practice
22.4421193232413
24.6128620102215
20.8626141953619
21.3680054926193
15.7822093938599
5.00%
15.00%
25.00%
35.00%
45.00%
55.00%
2.5
7.5
12.5
17.5
22.5
27.5
MGMA Respondent Base
Perce
ntag
e of R
espo
nden
ts
Aver
age P
ractic
e Size
Private Practice Exodus
May 16, 2014 4Physician Employment
2009 2010 2011 20120.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Cardiology
Anesthesiology
Radiology
Urology
GastroenterologyOrthopedic Surgery
Hematology/Oncology
Neurology
OB/GYN
Internal Med
Pediatrics
Shifts in Major Specialties
Perc
enta
ge o
f Res
pond
ents
in H
ospi
tal/
IDS
Prac
tices
Anesthesiology
May 16, 2014 5Physician Employment
2009 2010 2011 2012 2009 2010 2011 2012
Median Comp - Hospital Practices
387342.5 389351 393722.44 378009
Median Comp - Non-hos-pital Prac-tices
428579.91 407292 436903 439000
Median Prof Col-lections/FTE
508089 513725 496393 548964
Hospital Owned Respon-dent %
0.101207590569293
0.0926509186351707
0.111302352266208
0.1923474663909
$50,000
$150,000
$250,000
$350,000
$450,000
$550,000
5.0%15.0%25.0%35.0%45.0%55.0%65.0%75.0%85.0%95.0%
Med
ian C
ompe
nsati
on/C
olle
ction
s
% Ho
spita
l Ow
ned
Resp
onde
nts
All data presented extracted from MGMA’s Physician Compensation and Production Survey
Internal Medicine
May 16, 2014 6Physician Employment
2009 2010 2011 2012 2009 2010 2011 2012
Median Comp - Hospital Practices
197755.56 203043.585 214184.96 220000
Median Comp - Non-hos-pital Prac-tices
195883 209039 221511.93 236828
Median Prof Col-lections/FTE
366622 383082 389019 375355
Hospital Owned Respon-dent %
0.507884208048953
0.560095579450419
0.562783661119516
0.619968518102092
$25,000 $75,000
$125,000 $175,000 $225,000 $275,000 $325,000 $375,000 $425,000
5.0%15.0%25.0%35.0%45.0%55.0%65.0%75.0%85.0%95.0%
Med
ian C
ompe
nsati
on/C
olle
ction
s
% Ho
spita
l Ow
ned
Resp
onde
nts
Medical Oncology
May 16, 2014 7Physician Employment
2009 2010 2011 2012 2009 2010 2011 2012
Median Comp - Hospital Practices
317542.806 375000 401507.63 425006
Median Comp - Non-hos-pital Prac-tices
401125.03 404412 443995.98024 435495
Median Prof Col-lections/FTE
446050 397196 464481 423448
Hospital Owned Respon-dent %
0.391447368421053
0.462301587301587
0.489326765188835
0.556537102473499
$25,000 $75,000
$125,000 $175,000 $225,000 $275,000 $325,000 $375,000 $425,000 $475,000
5.0%15.0%25.0%35.0%45.0%55.0%65.0%75.0%85.0%95.0%
Med
ian C
ompe
nsati
on/C
olle
ction
s
% Ho
spita
l Ow
ned
Resp
onde
nts
Orthopedic Surgery: General
May 16, 2014 8Physician Employment
2009 2010 2011 2012 2009 2010 2011 2012
Median Comp - Hospital Practices
516413.04 526397.965 544579 529360
Median Comp - Non-hos-pital Prac-tices
452128 482928 493094.67 546671
Median Prof Col-lections/FTE
775016.5 784985.425 799302.22 795395
Hospital Owned Respon-dent %
0.310344827586207
0.385064177362895
0.428723404255319
0.481087470449173
$50,000 $150,000 $250,000 $350,000 $450,000 $550,000 $650,000 $750,000 $850,000
5.0%15.0%25.0%35.0%45.0%55.0%65.0%75.0%85.0%95.0%
Med
ian C
ompe
nsati
on/C
olle
ction
s
% Ho
spita
l Ow
ned
Resp
onde
nts
Orthopedic Surgery: Hip & Joint
May 16, 2014 9Physician Employment
2009 2010 2011 2012 2009 2010 2011 2012
Median Comp - Hospital Practices
515788.835 589266.5 700000 920555
Median Comp - Non-hospital Practices
568572 589277 572960 704584
Median Prof Col-lections/FTE
944031.834 1011272 1060459.9177 954632
Hospital Owned Respon-dent %
0.148760330578513
0.13768115942029
0.181102362204724
0.31496062992126
$100,000
$300,000
$500,000
$700,000
$900,000
$1,100,000
5.0%15.0%25.0%35.0%45.0%55.0%65.0%75.0%85.0%95.0%
Med
ian C
ompe
nsati
on/C
olle
ction
s
% Ho
spita
l Ow
ned
Resp
onde
nts
Interventional Cardiology
May 16, 2014 10Physician Employment
2009 2010 2011 2012 2009 2010 2011 2012
Median Comp - Hospital Practices
602771.56 586765 584360 583837
Median Comp - Non-hos-pital Prac-tices
469820.415 474809 450379.5 518813
Median Prof Col-lections/FTE
777116.908 717690 676541.9861252 644328
Hospital Owned Respon-dent %
0.222720478325859
0.404761904761905
0.512516469038207
0.663551401869159
$50,000 $150,000 $250,000 $350,000 $450,000 $550,000 $650,000 $750,000 $850,000
5.0%15.0%25.0%35.0%45.0%55.0%65.0%75.0%85.0%95.0%
Med
ian C
ompe
nsati
on/C
olle
ction
s
% Ho
spita
l Ow
ned
Resp
onde
nts
Radiation Oncology
May 16, 2014 11Physician Employment
2009 2010 2011 2012 2009 2010 2011 2012
Median Comp - Hospital Practices
468007.8 477807.1 489830.615 564939
Median Comp - Non-hos-pital Prac-tices
607000 618000 528143.21 612972
Median Prof Col-lections/FTE
638286 641559.199999999
605359 662304
Hospital Owned Respon-dent %
0.287128712871287
0.379310344827586
0.449438202247191
0.428571428571429
$50,000
$150,000
$250,000
$350,000
$450,000
$550,000
$650,000
5.0%15.0%25.0%35.0%45.0%55.0%65.0%75.0%85.0%95.0%
Med
ian C
ompe
nsati
on/C
olle
ction
s
% Ho
spita
l Ow
ned
Resp
onde
nts
Plastic & Reconstructive Surgery
May 16, 2014 12Physician Employment
2009 2010 2011 2012 2009 2010 2011 2012
Median Comp - Hospital Practices
360033 374511.845 413469.63 449106
Median Comp - Non-hos-pital Prac-tices
413548.38 391733.03 451779.01 465626
Median Prof Col-lections/FTE
648937.860000001
730113.63 703194 865168
Hospital Owned Respon-dent %
0.38888888888889
0.427807486631016
0.5 0.42713567839196
$50,000 $150,000 $250,000 $350,000 $450,000 $550,000 $650,000 $750,000 $850,000 $950,000
5.0%15.0%25.0%35.0%45.0%55.0%65.0%75.0%85.0%95.0%
Plastic & Reconstructive Surgery
Med
ian C
ompe
nsati
on/C
olle
ction
s
% Ho
spita
l Ow
ned
Resp
onde
nts
Hospital/IDS Practice Economics
May 16, 2014 13Physician Employment
All data presented extracted from MGMA’s Cost Survey
Multispeci
alty
Cardiology
Orthoped
ics
Genera
l Surge
ry
Urology
Neuro
logy
OB/GYN
Gastro
enter
ology
Internal
Medicin
e
Family
Med
icine
Pediat
rics
-2,000,000
-1,500,000
-1,000,000
-500,000
0
500,000
Median Practice "Income" by Specialty
Median Income
90th P Income
Annu
al In
com
e
Emerging Employer Responses
• Parting ways with significant under-performers• Removing salary guarantees for established physicians
• Pure production models
• Shifting from wRVU-based to collections-based incentives
• Implementing variable wRVU-based compensation• Using earnings-based incentives• Adding teeth to quality incentives
May 16, 2014 14Physician Employment
What Does This Mean for FMV?
• Market Approach – use of market “comps”• Is survey data reliable?
• Cost/Income Approaches – “revenue less expenses” models• Does this method really represent the market?
• Many compensation models are based on payment for service• How to incorporate shift to payment for quality
• Are FMV and commercial reasonableness becoming adversarial?
May 16, 2014 15Physician Employment
Physician EmploymentCurrent Compensation Trends and
Considerations for Establishing FMV
Presented By
Jim Carr, ASA, MBA | PartnerBecker’s Hospital Review 4th Annual Meeting
May 16, 2014