- Joined
- Nov 21, 1998
- Messages
- 13,068
- Reaction score
- 7,597
S: "I have a concern that this employed-HOPD pain doctor is being compensated over fair market value."
B: My friend who is a CMO at a community hospital calls and asks for advice regarding pain MD compensation. Hospital has employed the pain doctor for 4 years and the doctor is on track to make $1 million this year. S/he is doing a ton of kypho, vertilfex, pumps, and stim. Sees 40 patients per day in the clinic with NP. I ask the CMO, "What's the doctor's enterprise value to the hospital?" Without even taking a breath he says, "It's on track to be over $11 million this year." Note: When negotiating with Admin they will always act sketchy and naive if you ask about projected physician enterprise value. Some Admin claims to "not track it." That's pure, unadulterated BS. It would be tantamount to business malpractice for any CFO, Department Chair, etc to not know the "top-line revenue" of their employed MD's. Moreover, any competent hospital governing board EXPECTS to see 2, 3, and 5-year projections based upon enterprise values. Despite this, physicians routinely fail to consider enterprise value when negotiating compensation arrangements.
A: I say, "You're telling me s/he brings in $11 million per year and you're paying out $1 million. His compensation is certainly greater than 90%tile of MGMA benchmarks, but this doctor seems justifiably exceptional in his/her productivity. The only question the C-suite and Board need to answer is whether or not they think the ROI is satisfactory and meeting expectations.
R: Pay him. While I'm not certain I could stomach such a lopsided split on my proceeds, I also can't imagine the hospital doing much better for itself in this scenario. And, at this current pace, the doctor is likely to burn out. But, so what? When that happens, just get another one and lather, rinse, repeat.
B: My friend who is a CMO at a community hospital calls and asks for advice regarding pain MD compensation. Hospital has employed the pain doctor for 4 years and the doctor is on track to make $1 million this year. S/he is doing a ton of kypho, vertilfex, pumps, and stim. Sees 40 patients per day in the clinic with NP. I ask the CMO, "What's the doctor's enterprise value to the hospital?" Without even taking a breath he says, "It's on track to be over $11 million this year." Note: When negotiating with Admin they will always act sketchy and naive if you ask about projected physician enterprise value. Some Admin claims to "not track it." That's pure, unadulterated BS. It would be tantamount to business malpractice for any CFO, Department Chair, etc to not know the "top-line revenue" of their employed MD's. Moreover, any competent hospital governing board EXPECTS to see 2, 3, and 5-year projections based upon enterprise values. Despite this, physicians routinely fail to consider enterprise value when negotiating compensation arrangements.
A: I say, "You're telling me s/he brings in $11 million per year and you're paying out $1 million. His compensation is certainly greater than 90%tile of MGMA benchmarks, but this doctor seems justifiably exceptional in his/her productivity. The only question the C-suite and Board need to answer is whether or not they think the ROI is satisfactory and meeting expectations.
R: Pay him. While I'm not certain I could stomach such a lopsided split on my proceeds, I also can't imagine the hospital doing much better for itself in this scenario. And, at this current pace, the doctor is likely to burn out. But, so what? When that happens, just get another one and lather, rinse, repeat.