This is the second of a two-part series examining each part of emergency physician compensation packages. This article looks at the more creative elements of compensation and the future building blocks of income.
The hottest thing to hit emergency physician incomes in the 90s was the incentive bonus. It now has become a major portion of many overall compensation packages and highly sought by both experienced physicians and graduating residents.
The initial concept was to create a mechanism whereby those physicians who move patients and document more efficiently could earn more than those who don’t. Today’s situation is quite complex, with no two bonus programs being exactly alike. The variety of formulas is vast and rarely, if ever, guaranteed. The most important things a job candidate needs to look for with a bonus program are:
- the formula for earning bonus money;
- the criteria bonus money is based on … For example, is it hours worked that pay period; productivity; patient feedback; patient complaints; departmental contribution and meeting attendance; director’s discretion; or a combination of all of the above?
- the formula throughout the group. Is it uniform?
- the reward incentive. Does the formula reward good work, or does it set up a billing competition between physicians?
Bonus income should reward the strong clinical skills and documentation abilities of physicians. It should not reward speed and productivity in such a manner that a slugfest for billing ensues. That creates a dangerous environment for both patients and physicians. The best bonus packages are based on a combination of factors and are uniform throughout the group or department. Other questions to ask include how and when the bonus income is distributed.
‘Because so many 401Ks and 403Bs took major hits in the recession, physicians became more interested in immediate cash as opposed to controlled investing.’
Relative Value Unit compensation started in California and swiftly worked east, encompassing many employers in the Texas market along the way. Based on billings and collections over a period of time, an RVU is established. It could be $3.45 or $32.85, depending on the department and payer mix. The production of the physician is broken down into RVUs, and the multiples of that equation make up the physician’s earnings for the pay period. It proves that documentation is a key factor in this income model. Sometimes scribes are employed in environments where RVU compensation is applied.