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


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


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


2009 2010 2011 2012 2009 2010 2011 2012


197755.56 203043.585 214184.96 220000


195883 209039 221511.93 236828


366622 383082 389019 375355


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


2009 2010 2011 2012 2009 2010 2011 2012


317542.806 375000 401507.63 425006


401125.03 404412 443995.98024 435495


446050 397196 464481 423448


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


2009 2010 2011 2012 2009 2010 2011 2012


516413.04 526397.965 544579 529360


452128 482928 493094.67 546671


775016.5 784985.425 799302.22 795395


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


2009 2010 2011 2012 2009 2010 2011 2012


515788.835 589266.5 700000 920555

Median Comp - Non-hospital Practices

568572 589277 572960 704584


944031.834 1011272 1060459.9177 954632


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


2009 2010 2011 2012 2009 2010 2011 2012


602771.56 586765 584360 583837


469820.415 474809 450379.5 518813


777116.908 717690 676541.9861252 644328


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


2009 2010 2011 2012 2009 2010 2011 2012


468007.8 477807.1 489830.615 564939


607000 618000 528143.21 612972


638286 641559.199999999

605359 662304


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


2009 2010 2011 2012 2009 2010 2011 2012


360033 374511.845 413469.63 449106


413548.38 391733.03 451779.01 465626


648937.860000001

730113.63 703194 865168


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


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


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?


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

physician employment current compensation trends and considerations in establishing fmv presented by...

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