Value-based metrics gain ground in physician employment contracts


Physician employment contracts increasingly include value- and quality-based metrics as bases for production bonuses, according to an analysis of recruitment searches from April 1, 2018, to March 31, 2019.

Metrics such as physician satisfaction rates, proper use of EHRs, following treatment protocols, and others that don’t directly measure volume are becoming more commonplace in employment contracts, though volume measures still are included, according to Phil Miller, vice president of communications at health care recruiting firm Merritt Hawkins and author of the company’s 2019 report on physician and advanced practitioner recruiting incentives, released July 8.

Of 70% of searches that offered a production bonus, 56% featured a bonus based at least in part on quality metrics, up from 43% in 2018. The finding represents the highest percent of contracts offering a quality-based bonus that the company has tracked, according to the report.

Merritt Hawkins’ review is based on a sample of the 3,131 permanent physician and advanced practitioner search assignments that Merritt Hawkins and its sister physician staffing companies at AMN Healthcare have ongoing or were engaged to conduct from April 1, 2018 to March 31, 2019.

Other common value-based metrics include reduction in hospital readmissions, cost containment, and proper coding.

While value-based incentives are on the rise, “facilities that employ physicians want to ensure they stay productive, and ‘productivity’ still is measured in part by what are essentially fee-for-service metrics, including relative value units [RVUs], net collections, and number of patients seen.”

RVUs were used in 70% of production formulas tracked in the 2019 review, up from 50% in the previous year and also a record high.

Mr. Miller noted that employers are seeking the “Goldilocks’ zone,” a balance point between traditional productivity measures and value-based metrics, very much a work in progress right now.

A possible corollary to the increase in production bonuses is a flattening of signing bonuses. During the current review period, 71% of contracts came with a signing bonus, up slightly from 70% in the previous year’s report and down from 76% 2 years ago.

Signing bonuses in the review period for the 2019 report averaged $32,692, down from $33,707 during the 2018 report’s review period.

Overall, family practice physicians remain the highest in demand for job searches, but specialty practice is gaining ground.

For the 2018-2019 review, family medicine was the most requested search by specialty, with 457 searches requested. While the ranking remains No. 1, as it has for the past 13 years, the number of searches has been on a steady decline. Last year, there were 497 searches, which was down from 607 2 years ago and 734 4 years ago.

Mr. Miller said there were a few reasons for the lower number of searches. “One is just the momentum shifts that are kind of inherent to recruiting. People put all of their resources into one area, typically, and in this case it was primary care and they realized, ‘Hey wait a minute, we need some specialists for these doctors to refer to, so now we have to put some of our chips in the specialty basket.’ ”

The Baby Boomers also is having an effect – as they age and are experiencing more health issues, more specialists are needed.

“[Older patients] visit the doctor twice or three times the rate of a younger person and they also generate a much higher percentage of inpatient procedures and tests and diagnoses,” he said.

On the opposite end of the spectrum, “younger people are less likely to have a primary care doctor who coordinates their care,” Mr. Miller said. “What they typically do is go to an urgent care center, a retail clinic, maybe even [use] telemedicine so they are not accessing the system in the same way or necessarily through the same provider.”

Demand for psychiatrists remained strong for the fourth year in a row, but the number of searches has declined for the last several years. For the current review period, there were 199 searches, down from 243 the previous year, 256 2 years ago, and 250 3 years ago.

There is “pretty much a crisis in behavioral health care now because there are so few psychiatrists and the demand has increased,” Mr. Miller noted.

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