Physician Compensation Patterns Pose Challenges to Efforts to Incentivize Changes in How Care Is Delivered

Feb 25, 2014, 9:00 AM

Salary is the most common type of compensation for physicians in non-solo practice settings, many of whom are paid through a blend of methods, according to a new American Medical Association (AMA) Policy Research Perspectives report that says it provides a “rare glimpse” into how non-solo physicians are paid.

Just over 53 percent of non-solo physicians reported that all or most of their compensation came from salary, while nearly 32 percent said all or most of their compensation was based on personal productivity. The report points out that this breakdown “suggests that it may be difficult to align practice-level incentives that encourage judicious use of resources with physician-level incentives that do not.”

Ideally, the report says, financial and other incentives would encourage physicians to make the best care decisions possible for patients, providing them “the right care, in the right place, and at the right time,” but current incentives often do not encourage that approach.

The report is based on data from a 2012 survey of 3,466 post-residency physicians who provided at least 20 hours of patient care per week and were not employed by the federal government. Those physicians who were not in solo practice were asked about four methods of compensation: base salary, compensation based on personal productivity, compensation based on practice financial performance, and bonus pay based on factors other than personal productivity and practice financial performance.

Thirty percent of non-solo physicians relied on two payment methods, and 17.9 percent relied on at least three.

Read the AMA report on physician compensation.

This commentary originally appeared on the RWJF Human Capital Blog. The views and opinions expressed here are those of the authors.