Physician Compensation Considerations Amidst the COVID-19 Pandemic


Background

As the COVID-19 pandemic grows in its severity and impact, there is rising urgency to address imbalances between physician compensation and their current work demands.

Some physicians — including intensivists, emergency medicine doctors and hospitalists — are now working in extreme conditions, with longer hours and extra shifts, all of which add to the stress and intensity of the current COVID-19 crisis. Other physicians may have been reassigned to new roles with entirely new responsibilities, such as anesthesiologists, for which different compensation is appropriate. Finally, some physicians, such as orthopedists and gastroenterologists, are experiencing significantly reduced volumes due to cancellation or delays of elective or non-emergent cases and procedures. Regardless of an individual provider’s compensation structure, there are risks of under- and over-compensation and, at best, a misalignment of compensation with productivity, worked hours and clinical and personal burdens.

In the moment of pandemic crisis, it is unwise to implement fundamental changes to physician compensation models. However, some considerations and short-term actions are warranted and necessary. Given the likely duration of the pandemic, the impact on healthcare revenues, expected significant deterioration in health system and medical groups’ financial performance, and the significant alterations likely to take place in physician practices, it seems untenable that physicians can categorically be “kept whole.” Health systems, medical groups and faculty practices should consider the following steps.

.

Immediate Actions:

Review pertinent physician employment contracts to understand obligations, commitments and due process.

Communicate to all physician constituents an awareness of potential compensation issues and the intention to address them both in the present and upcoming months as the pandemic experience is fully realized. Key messages to all physicians are:

Address each unique situation with a consistent set of guiding principles. Key questions to be answered that will inform an organization’s guiding principles include the following. Is it best to have specific compensation reductions or merely deferral pending future return of clinical volumes? What is the timing for restoring compensation based on predetermined thresholds in production or clinical volumes? Is there value in a staged or sequenced restoration based on achieving specific benchmarked metrics? How should these thresholds relate to pre-COVID-19 activity, particularly if the COVID-19 impact is lingering? If relying on a true-up of salary or monthly draw at a future date, what must be taken into consideration now and later? Informed by guiding principles, attend to each of the following situations, which may have implications for compensation but not necessarily require action:

Take proactive and decisive action to address the need. Develop guidelines that can be consistently applied and sustained for many months until the pandemic stabilizes. For example:

Conclusion

As immediate, short-term changes in compensation are made, keep the following considerations in mind:

Authors

Mark J. Werner, MD
Director, Clinical Consulting and Chartis Physician Leadership Institute
[email protected]

Todd Hoisington
Principal
[email protected]