Very often when looking at productivity bonus structure for doctors, it can be a confusing area to understand and then decide which works best for your needs.
For many young physicians who are choosing their first practice opportunity, selecting among compensation plans isn’t likely an option. Contract terms will typically entail some room for negotiation, but the Productivity Bonus Structure for Doctors are often well established for most medical groups, hospitals, and large managed care organizations.
These days, physicians are not as likely to see wide variations in compensation structures, as there has been a move toward less complexity in compensation models. Some physicians may still find themselves with a steep learning curve when they’re changing jobs or trying to weigh one productivity bonus structure against another.
What is Minimum-Income or Net-Income Guarantee Compensation?
The prevailing model now is a salary or net-income guarantee with a potential bonus or incentive add-on.
Most often seen in large HMOs, and large corporate- or physician-owned practices, these closely related models are perhaps the most straightforward, because the income level is set and physicians know how much they’ll earn. When a bonus or incentive is added in, physicians should inquire about how, when, and under what conditions the sum is paid.
The minimum-income guarantee, with or without bonus, is the most prevalent model today for new physicians starting out. It provides security to physicians who need the support of an established practice and salary guarantee while they build a patient base. It could also be a stepping stone to a bonus arrangement and, a few years later, equity ownership.
The potential bonus or incentive add-ons can be something such as a percentage of either billings or collections, or they are paid based on the resource-based relative value scale (RBRVS) units assigned to procedures or patient-visit types.
What is Productivity Based Compensation?
Under a productivity-based compensation structure a doctor is typically paid 50 percent of their own collections, with the remaining 50 percent reserved for overhead expenses. He or she also can also receive a quarterly bonus based on revenues from the group’s ancillary services (i.e. laboratory, radiology, and cardiac services) Sometimes if it is via a complicated formula, it can provide a higher percentage of those revenues to partners than to non-partners.
As for productivity bonuses and profit shares, most medical group practices simply base them on collections from a physician’s work. In some practices, bonuses are paid on such factors as patient encounters, or some other relative value unit (RVU) which is applicable to the individual practice.
No matter what productivity bonus structure a doctor chooses, it is important to confirm that the bonus amounts are pay on a monthly or quarterly basis to avoid a delay in compensation.
