This document discusses physician compensation models and the relationship between physician revenue, expenses, and pay. It provides information on basic compensation models, including production or RVU-based models. It emphasizes the importance of understanding physician productivity metrics like RVUs, patient encounters, and collections in order to negotiate compensation. Data from industry surveys on metrics like RVUs, encounters, and compensation by specialty are presented to facilitate understanding of compensation structures.

2.  Understand
 The relationship of physician revenue to pay
 The relationship of practice expenses to pay
 Become familiar with
 Basic physician compensation models
 Physician productivity

3. Revenue Expenses Pay

4. Revenue Expenses Pay
Changes in the medical practice environment have made this
relationship less direct and easy to understand.

7. Revenue Expenses Pay
Primarily billing
for
patient services

10. Expenses
40%
Compensation
60%
Internal Medicine Hospitalist, MGMA Survey, 2013

11. Expenses
61%
Compensation
39%
Internal Medicine, MGMA Survey, 2013

12. Revenue Expenses Pay
More than half of
the revenue

16. Model used by 75% of practices in 2012/2013 Merritt Hawkins Survey

17. Quality bonuses in 39% of practices in 2012/2013 Merritt Hawkins Survey

19.  Cases/Patient Visits
 Collections for medical services
 Relative Value Units (RVUs)
 Arbitrary units set by Medicare for the value of
healthcare services

20. Merritt Hawkins Physician Compensation Report, 2013

21. Initial
Inpatient
Evaluation
CPT Code
Medicare
Allowable
Charge
RVUs
Level 3 99223 $204 3.86
Level 2 99222 $138 2.61
Level 1 99221 $102 1.92
2014 Medicare Physician Fee Schedule, National Payment Amount, Accessed

22.  You need to know a few facts about your
specialty
 Workload (patients/cases per year)
 RVUs
 Collections
 Unfortunately, you will not find these answers
in PubMed or UpToDate.

23. Medical Group Management Association
$730 for non-members
Annual survey of over 60,000 physicians
Used by many practices to develop
compensation models

24.  RVUs
 Charges
 Collections
 Patient encounters
 Compensation
 Bonuses
 Vacation

25.  Region
 Practice setting
 Group ownership

27. Specialty Mean RVUs 25th % Median 75th %
Family Medicine 4,962 2,776 3,804 4,835
Internal Medicine 4,999 2,883 3,774 4,705
Hospitalist (IM) 4,461 2,236 3,209 4,298
MGMA Survey, 2013
Distributions skewed towards higher RVUs

28. Specialty Mean 25th % Median 75th %
Family Medicine 4,295 2,238 3,009 3,920
Internal Medicine 3,645 1,854 2,542 3,402
Hospitalist (IM) 2,413 1,038 1,586 2,219
MGMA Survey, 2013
Distributions skewed towards higher Patient Encounters per Year

29. Specialty Mean 25th % Median 75th %
Family Medicine $226,000 $142,000 $170,000 $207,000
Internal Medicine $225,000 $148,000 $178,000 $224,000
Hospitalist (IM) $253,000 $183,000 $211,000 $240,000
MGMA Survey, 2013
Distributions skewed towards higher Compensation

32. Free

33. $249

35. Model used by 75% of practices in 2012/2013 Merritt Hawkins Survey

36.  Key relationships
 Revenue – Expenses = Pay
 Base + Production = Pay
 Know the value of your services