In a survey performed back in April, 18% of physicians treating Covid-19 patients had been furloughed or experienced a pay cut, as had 30% of physicians not treating Covid-19 patients. Now organizations with productivity-based compensation plans are grappling with the reality of an ongoing pandemic. There are two choices: react and adjust incrementally, or be proactive and seize the opportunity to build a more resilient plan. While every organization is different, these three key steps should serve as guideposts when designing a new plan:
- Start with standards-based compensation. It’s important to align to national benchmarks, sure, but set standards within your organization so that everyone understands that the change is universal, equitable, and thoughtful. If you don’t already leverage standard components and payment structures in a compensation plan, start here.
- Know your priorities. Covid-19 will be the tipping point for some organizations to transition more actively into value-based care; others will continue to focus on recovering volume and operating more efficiently within a productivity-based model. Know your organizational priorities and align physician compensation to them. For many, this will mean rewarding physicians for non-clinical time spent developing operational efficiencies, and compensating for telehealth, and will result in a more diversified set of metrics than previous productivity-based plans.
- Create predictability. Establishing a base salary component that isn’t at risk due to productivity or other metrics creates a sense of stability. Creating a modest base with incentives paid as a bonus also allows organizations to improve cash on hand by simply right-sizing paychecks rather than paying a higher projected salary upfront and performing clawbacks as needed. Another tool to smooth the pandemic’s impact on finances is to incorporate rolling averages, and base compensation incentives on multiple years of performance data.
Is your organization considering a compensation plan adjustment? If so, what steps have you taken to plan for the ongoing impact of the pandemic?