Emergency Medicine at Westlake Hospital Compensation Structure

        Dr. Padma Singh, Director of Emergency Medicine at Westlake Hospital, has a staff meeting tomorrow to review the compensation and bonus system with the ER physicians and get their approval on a new plan.  The ER doctors, however, had different preferences for the new system.  Some wanted a system that maintained a communal atmosphere while others felt they were carrying more of the load and should be compensated for that.  Monthly records clearly supported the fact that some doctors routinely treated more patients than others.

        The case presents three major problems with the current compensation system.  First, triage doctors often had lower average charge points per hour (ACPH) than follow-up doctors.  No one wanted to take on triage shifts because they typically yielded lower ACPH.  Second, doctors viewed the monthly bonus system as unfair.  Doctors with ACPH just below 10 did not receive any bonus at all.  Finally, the current compensation led to wide variances in time spent with patients.  Some doctors were spending very little time with patients, which could be attributed with the desire to see more patients per hour to be eligible for the monthly bonus.  Dr. Singh needs to address these issues if she hopes to establish a system that will motivate the doctors rather than add to their dissatisfaction.

        Valued and desired behaviors may be promoted by Westlake doctors who are paid based on a percentage of revenue generated by their charge points.  As previously mentioned, doctors viewed the monthly bonus as unfair because they had to achieve an ACPH greater than 10 to be eligible for any bonus.  This promoted undesired behaviors, such as ordering unnecessary tests or falsely embellished documentation, that could endanger patient safety to meet this requirement.  Studies have shown that humans need control over their lives and futures.  Pay for performance plans addresses this need by need by allowing individuals to influence their future pay and status through their own effort and performance.  If Dr. Singh implements this plan and links pay to specific outcomes, she may see greater patient satisfaction because the doctors have greater control over the outcome of their service.  This may motivate non-performing doctors to change their overall behavior to align with those valued and desired by the organization.

We support the argument that paying doctors based on percentage of the revenue generated by their personal charging points (i.e. 25% of the revenue generated by their charge points per month) with no hourly salary.

Pay for performance motivate individual by enhancing their self-esteem, by providing self-actualization (need for achievement) and by providing social belongingness (need for affiliation) which helps in maintaining close interpersonal relationship between doctor and patients.

Moreover, pay for performance distinguish low and high performers, this helps in keeping workplace composition sorted which motivates the group rather than adding dissatisfaction. Physicians who cannot provide the patient care based on stated expectations can leave the group keeping workplace composition intact with high performers.

Pay for performance can be measured both subjectively as well as objectively.  Subjective performance measure can be used to measure the quality of the patient care which include history and diagnosis of the patient in the chart whereas objective performance measure can be based on number of patient seen.

As the Revenue based model is based on number of patients seen, ACPH generated by physicians, there will be enough motivation to work as triage doctor or follow up doctor.

Even though triage doctor accumulates less charge points but seeing higher number of patients can leads higher revenue and compensation

Theories of motivation suggest that pay is a strong motivator of action because it provides both intrinsic and extrinsic rewards. Also, theories of motivation suggest that people will do what they are rewarded for, given that they value the rewards. It was also suggested that 50% of the productivity increases associated with pay for performance plans has come from changes in workforce composition.

        Also theories have suggested that such pay structure imparts fairness in the system thus increasing better relations with one’s supervisor/manager and most importantly with the patients