1. FACULTY COMPENSATION IN AN ACADEMIC RADIOLOGY DEPARTMENT: A CASE STUDY
Margaret Birrenkott, MBA
University of Wisconsin Medical School
Madison, Wisconsin

2. RESULTS OF COMPENSATION SURVEY
28 respondents
75% have formalized comp plans
57% use RVUs as a component of the comp plan; 43% have no formal clinical productivity measures.
43% measure academic productivity as a basis for distributing incentive; 57% have no formal academic productivity measures.
25% allocate comp based on chair discretion
AAARRO Meeting, September 13, 2003

3. DEFINITION OF TERMS
“INCENTIVE” = productivity-based measure of work for which radiologist is compensated.
“BONUS” = Additional salary paid out to radiologists based on revenue in excess of expenses (including ‘regular’ comp)
“COMPENSATION” = Salary paid out exclusive of fringe benefits but including retirement.
AAARRO Meeting, September 13, 2003

4. COMPENSATION FUNDING SOURCES
Clinical Revenues 87%
Hospital (GME) %
Medical School (MAMA) 6%
Research Grants 2%
AAARRO Meeting, September 13, 2003

5. UW RADIOLOGY COMPENSATION PLAN
COMPONENTS:
Clinical
10% pool for call pay (‘Call Merit’)
70% equally shared with some disparity for rank and years of service in dept (‘Clinical Base’)
10% based on total RVUs (‘Clinical Incentive’)
AAARRO Meeting, September 13, 2003

6. UW RADIOLOGY COMPENSATION PLAN
COMPONENTS:
Academic
University base salary allocated for research and teaching activities
10% from clinical revenues awarded based on a point system (academic RVUs) for academic activities (‘Academic Incentive’)
AAARRO Meeting, September 13, 2003

7. HOW IS $$ ALLOCATED? CALL MERIT
Distributed first before other pools allocated
Provided only to IVR and community sections
Allocation based on frequency and intensity
of call
AAARRO Meeting, September 13, 2003

8. HOW IS $$ ALLOCATED? CLINICAL BASE
Largest pool distributed equally regardless of rank, track or productivity
+$5,000 increase for every rank greater than Assistant Professor
+$1,000 for every year of service at UW Radiology
Example: Associate Professor w/10 yr UW exp:
$150,000 + $5,000 + $10,000 = $165,000
AAARRO Meeting, September 13, 2003

9. HOW IS $$ ALLOCATED? CLINICAL INCENTIVE
Take faculty RVUs for previous 12 months clinical work
Dollars distributed via a 1:1 ratio (every RVU awarded = $$$)
Plain film (including dx mammo) adjustment of 1.35
AAARRO Meeting, September 13, 2003

10. HOW IS $$ ALLOCATED? CLINICAL INCENTIVE EXAMPLE:
$1,000,000 in pool/385,000 total dept clinical RVUs = $2.60 per RVU
Radiologist generated 10,000 RVUs (including plain film adjustment)
Clinical incentive = $2.60 x 10,000 = $26,000
AAARRO Meeting, September 13, 2003

11. HOW IS $$ ALLOCATED? ACADEMIC
UW base salary from medical school allocation of funds for grantsmanship, teaching, academic administration
Academic incentive allocated based on internal ‘RVUs’
Administrative work for dept, UW, hosp, UWMF
Presentations/publications
Funded grants/grant applications
Teaching awards
AAARRO Meeting, September 13, 2003

12. HOW IS $$ ALLOCATED? ACADEMIC INCENTIVE EXAMPLE
MD completes Faculty Assessment Form to self report academic production
FAFs reviewed and scored by dept committee
Points totaled and MD placed in ‘tier’
$9,500
$12,500
$15,500
Etc.
Size of merit per tier determined by amount of $$ in pool
Everyone participates
Bring copy of FAF to show.
AAARRO Meeting, September 13, 2003

13. HOW IS $$ ALLOCATED? TOTAL SALARY IS SUM OF:
Call Merit (if appropriate)
Clinical Base Subject to
Clinical Incentive % withhold
Academic Incentive
Academic Base
Bonus if revenues allow; distributed evenly
Withhold returned at year-end if revenues allow
AAARRO Meeting, September 13, 2003

14. MANAGEMENT OF PLAN
Chair has small discretionary fund to ‘tweak’ salaries as needed
Department Finance Committee meets regularly and reviews budgetary and staffing needs to ‘right-size’ sections
Grieve through Dept Finance Committee; if unresolved, appeal to chair and ultimately to practice plan Comp Development Committee
AAARRO Meeting, September 13, 2003

15. MANAGEMENT OF PLAN Educate, educate, educate!
Town hall meetings prior to plan implementation
Section meetings to explain changes
Present simulations to show impact
Presentation of plan components at faculty meetings
Chair/administrator one-on-one meetings with faculty
AAARRO Meeting, September 13, 2003

16. CHALLENGES AND LESSONS LEARNED
Equalizing plain film RVUs vs. CT/MRI and IVR. Fairest method??
Switched to a 1:1 ratio vs. using internal dept target for ‘simpler’ clinical incentive.
How should academic productivity be valued? Who determines academic RVUs?
Reward intensity and frequency of call.
Give sections flexibility to allow redistribution among section members.
Determining what is fair was tough. Didn’t implement at onset of our comp plan, so CT/MR/Community/IVR felt like $$ was taken away.
Same as #1. Used to use a dept benchmark so MDs who earned high RVUs felt they were incentivized but caused some in-fighting. When tried to equalize it to simplify plan, pool diluted and high earners felt $$ taken away.
Needs to be an incentive for having to take more frequent and intense call when doing riskier procedures. Rest of faculty okay with it. Ante has gone up, though.
Some feel administration should not be valued very high; some feel research valued too much. So, really depends on where their interests lie and what they each value. Hard to come up with a plan that pleases everyone.
AAARRO Meeting, September 13, 2003