Hospitalists and compensation incentives based on quality – what do we know?

John Nelson writes…

Since SHM has began gathering data in 1997, the majority of hospitalists have shifted from a fixed, or “straight,” compensation, to a compensation method that includes a variable component based on performance.  Productivity, as measured in things like RVUs or encounters, is the most common variable element, but quality metrics used as a basis for a portion of compensation are rapidly gaining in popularity.

In late 2008, SHM’s Practice Analysis Committee conducted a survey focused on hospitalist turnover and participation in quality initiativesOf the 115 groups responding, 96% indicated that their group participates in quality initiatives at their hospital, most commonly serving on quality-related committees at the hospital.  You probably want to make sure that your group isn’t in the 4% that don’t work on quality initiatives.

A more remarkable fact from the survey is that “97% of respondents also indicated at least one individual in the group has a formally designated quality role within the hospital or health system (such as Chief Quality Officer, Patient Safety Officer, Medical Director for Case Management, etc.); 86% of such positions involve dedicated time and pay for this work.”

More than half of groups responding to the survey (58%) reported that a portion of hospitalist compensation is based on performance on quality initiatives.  Of these, 97% had less than 20% of annual compensation connected to quality, and nearly half (43%) had <7% of annual pay connected to quality.

Remarkably, 64% of groups responding indicated that the quality-related compensation was paid based on individual, rather than group, performance.  That is, within the same group one hospitalist might be compensated for a high score on a quality metric while someone else in the same group might be paid less for a lower score on the same metric.  This is surprising because so many quality metrics, like core measures and patient satisfaction, are difficult to connect to a single hospitalist’s performance.

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