1. Performance Pay for MGOA Physicians
Laman Abdullayeva
Naureen Dhukka
Rachna Gaur
Porscha Jackson
Jessica Saenz

2. Overview Background of the Case Initial Compensation Plan Review
New Proposed Plan Discussion
Recommendations
Questions

3. Background MGH MGOA Third hospital founded in United States
Long history of providing outstanding clinical care
Prestigious research & teaching hospital
MGOA
Harvard Medical School professors
World reputation for care & research
Received grant funding for research & salary
Worked hours per week
Provides services to all socio-economic groups

4. Key Players

5. Case Overview Financial stability of MGOA
Annual financial deficits
Money flow of health care industry
Costs, productivity, & compensation of MGOA physicians
Roles of nonprofit environment & teaching hospital
Compensation of MGOA physicians vs private practitioners

7. Current Plan Flat Salary
Salaries were adjusted based on seniority and very loosely on productivity
“Protected” time for research
Academia-Faculty Compensation Plan
Promotion system similar to tenure

8. Current Plan Challenges
Some doctors were bringing in substantial profits in, others were costing the group
Strategic alignment of goals
Clinical productivity
Physicians outcome needed to be rewarded appropriately

9. Rubash’s Initial Steps
1. Open and frank meetings
2. Negotiated with MGH to secure 10% time increase in operating room
3. Group administrative functions were enhanced
4. Non-academic group compensation plan
Meeting
Flexibility, time/cost
Productivity focus: salary/performance adjustment

10. Proposed Compensation Plan
Doctor’s base salary
Maybe you could add a picture here!!!!!!!!!!!!
Development fund tax
Bonus
NAUREEN’S SLIDE
Base salary adjusting system

11. Proposed Compensation Plan
Set semi-annually
Varies at 1999 levels ranging from $200,000 to $300,000
Doctor’s base salary
Development fund tax
Bonus
1999????
NAUREEN’S SLIDE
Base salary adjusting system

12. Proposed Compensation Plan
Doctor’s base salary
Development fund tax
Bonus
NAUREEN’S SLIDE
Base salary adjusting system

13. Proposed Compensation Plan
Equals 50% of profits generated
Is a subject to change
Bonus= r*(R-OC-GC-S)
R: revenues generated by professor after development tax
OC: costs of the physician
GC: physician’s share of general group costs
S: physician’s base salary
r: bonus rate
Doctor’s base salary
Development fund tax
Bonus
LAMAN
Base salary adjusting system

14. Proposed Compensation Plan
Doctor’s base salary
Development fund tax
Bonus
Base salary adjusting system

15. Compensation Plan Analysis
PROS
Long-term fix through Development Fund
Short-term fix through employee empowerment
Productivity focus through bonuses

16. Compensation Plan Analysis
CONS
Taxing high performers & rewarding low performers
Inconsistent bonus rate
No “protected” research time
Murky status of new physician status
Complicated & costly structure

17. Recommendations

18. Recommendation Overview
MAIN ISSUES
Instability & uncertainty in the bonus rate level
Unclear status of “protected” research time
Strategic alignment of goals
Feedback
SOLUTIONS
Performance Based Bonus
Research time flexibility
Performance measures
Physician’s survey

19. Performance Based Bonus
Tied to the performance.
Each doctor has enough control on their work outcomes.
Every doctor can get bonus if he/she is able to bring profit.
Implementing a pay-for-performance (P4P) program holds the promise of stemming the
tide of rapidly-rising Medicare costs. By penalizing inefficient physicians and rewarding
efficient ones, Medicare could potentially save millions or billions of dollars each year. The
successful realization of such a system requires not only that efficiency ratings are
comprehensible to both providers and policymakers, but also that they affect provider behavior

20. Strategic Alignment of Goals: Performance Measures
Indicator
Maximum Points
Productivity Revenue earned > cost incurred 10
Safety Reduction in infection rates through better cleaning standards
Teaching residents and medical students 9
Patients treated with quick turnaround 8
Grants
Article published 7
Total Points 45
This promotes the relationship between doctor’s pay and performance.
It also promotes equal distribution of compensation. The better they
perform, the more they earn.

21. Performance Based Bonus
Performance Points
Bonus (percent of individual profit)
High: 37-45
40%
Average: 32-36
25%
Low: ≤31
No Bonus
physicians should be rated by how well they beat benchmarks for delivering chronic care, standards that are set after rigorous testing and review. The top-performing doctors should be rewarded for their performance.

22. Feedback? Employees view of Compensation Plan
Specificity -Feedback works best when it relates to a specific goal. Establishing employee performance expectations and goals before work begins is the key to providing tangible, objective, and powerful feedback.
Performance productivity -taking feedback will make doctors feel as if their opinions matter, boosting their productivity. When doctors get to safely share their appraisals, they feel valued. Contributing to your workplace gives a measure of ownership.
Job Satisfaction- Collecting feedback from doctors will reveal what they of the hospital they represent. Get their perspective about the opportunities for advancement and the hospital’s benefits package. This information is helpful to shape future perks, operating procedures and training programs.
Idea: split slide into 2 sections (flexibility time and survey)