How to account for the physician compensation gap

From left: Lisa Davis, senior vice president, strategic finance analytics, Ascension; Pam Hess, CFO of Ascension Saint Thomas Hospital; Kory Stout, CFO, Ascension Medical Group; and Gail Peace, founder and CEO of Ludi.

Photo: Susan Morse/HFN

NASHVILLE - An estimated three-quarters of physicians are employed by hospitals, according to information released at the HFMA session "Closing the Financial Data Gap in a Physician Alignment Strategy."

What's surprising is that only 52% of spend for physicians employed by a hospital goes towards employment, said moderator Gail Peace, founder and CEO of Ludi, a company focused on compensation and contract management.

The question then becomes, Peace said, where does the rest of that money go? 

"Someone has to watch that compensation gap," Peace said. "Physician payment is complex."

It's known that the compensation gap may be for on-call work, payment for locum tenens physicians who work temporarily in another practice, for independent physicians, nonclinical work or medical directorship positions. But getting to specifics on how much money is spent in each category and by which physician requires an alignment of data and clear contracts, according to three finance executives with Ascension: Pam Hess, CFO of Ascension Saint Thomas Hospital; Lisa Davis, senior vice president for strategic finance analytics at Ascension; and Kory Stout, CFO of Ascension Medical Group.

Ascension has automated physician data, being one of the few health systems to do so, according to Peace.

But the effort to align the information across the health system and make it easily accessible took a years-long effort, the finance executives said. 

Some physicians wouldn't submit time cards on time, and that stipulation wasn't in their contract, Hess said. Physicians are now required to put their time on an app, which also got some pushback. But Hess and the chief medical officer worked hand-in-hand to make it work, she said. 

Eight years later, Hess has one database of contracts and what is paid per physician, per month. Physician contracts are loaded in the system to understand what Ascension is paying and for what purpose. 

Alignment between the hospital and medical groups has evolved, Hess said. Both are now working together and aligned on data so Hess has information on where physicians are needed. Without that alignment, there's no good way to have a full view of physician spending, she said.

The scheduling system has the ability to pull information on physicians and procedures, Hess said. At month's end the health system can see if it's meeting targets. 

Data from the payroll, billing and scheduling is important, said Stout, who looked at compensation tied to clinical care and found gaps for which there was no accounting.

"What is that gap?" Stout asked. "It opened our eyes. Who manages this? … Does anyone know what the spend is?"

Hospitals need to know what service lines are driving hospitals and understand the physician piece that is driving the service lines, Stout said.

There must also be an accounting of what is really needed versus historical payments, Stout said. 

At the corporate level there has to be a focus on understanding the data in a standardized way, Davis said. This gives an opportunity for a holistic picture to determine if, enterprise-wide, they're meeting operational goals and community needs, Davis said. 

"Now we have a robust database," Davis said, "to understand what our spend has been." 

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org