Aligning Physician Compensation to Value Is No Easy Task

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Aligning physician compensation to performance can be a dicey matter, as it is difficult to reach a consensus on how to measure physician success. However, a number of oncology practices have been developing systems for doing this and achieving success.

Lucio Gordan, MD

Physicians and practice administrators participated in a panel discussion on the matter during the opening day of the Community Oncology Alliance meeting. They said developing metrics that can be easily interpreted and clearly point to achievement, or the need for improvement, are critical for success at hitching compensation to value.

They said, though, that it has been an evolving process that has taken some of them years of experimentation and development—and cannot be achieved overnight. Nevertheless, they had success stories to tell and helpful tips for the physicians and administrators in attendance. They warned that the growing emphasis on value, especially by The Centers for Medicare & Medicaid Services, makes it important for other practices to embark on the same journey.

“The landscape is rapidly changing,” said Lucio Gordan, MD, of Florida Cancer Specialists & Research Institute, who moderated the discussion. “Without accurate measurements, it becomes very difficult to move forward. We have to benchmark ourselves. We have to be able to use metrics to improve care, to improve safety, to improve efficiencies, and to potentially contain costs.”

Also participating from Florida Cancer Specialists & Research Institute,—a group of over 90 practice centers encompassing 50% of the Florida oncology market—were Michael Diaz, MD, and Todd Schonherz, chief operating officer. Other participants included Randy Broun, MD, president and chairman of Oncology Hematology Care (OHC) of Cincinnati, which has 20 locations in Ohio, Kentucky, and Indiana; and Richard Schiano, CEO of OHC.

Broun said that OHC began a multi-year transition to evaluating the quality of its work in 2012 by bringing in an outside consultant. That led to a complete redesign of their physician compensation system. They created various performance scales that would apply to the different departments within their practice, and physicians were evaluated based on how well their actions stacked up against those measures.

A total of 5% of physicians’ compensation was placed “at risk” in terms of their obligation to fulfill these expectations, Broun said. Each department participated in the development of some of the measures and, overall, the practice added additional metrics, such as patient satisfaction and compliance with guidelines.

“Those were monitored and applied, and at the end of the day, the 5% was awarded or not,” Broun said. Care was taken to establish a set of targets that were achievable, he said, and most of the physicians have been successful.

Even so, an enormous amount of data has to be collected to provide useful information that can aid in this process, Broun said. Practice administrators had to be prepared to argue in the event a physician disagreed with their assessment of his or her performance.

“Virtually every time somebody didn’t achieve the level they were supposed to, it was the data’s fault, and so they would be stomping into [the administrator’s office], pounding on his desk, saying, ‘Well, your numbers are wrong.’ And he’d say, ‘Show us.’”

Diaz said his group has taken a go-slow approach to tying physician performance to compensation. “One of the approaches we’ve taken at Florida Cancer Specialists & Research Institute, is developing the appropriate infrastructure so that physicians have all the tools there to be able to deliver optimal quality and value. We’re still trying to define value and quality—all of the measures. The last thing we want to do is focus in on moving targets.”

Schonherz said that Florida Cancer Specialists & Research Institute, has taken the discussion about value-based reimbursement to payers and that it takes a great deal of work to arrive at common measures. “These are not just simple agreements that we enter into: what’s in, what’s out, what’s capped, how do you handle inflation, and what about new drugs?” He said this will remain a work in progress for some time to come.

Payers that OHC works with have embraced the physician compensation program at OHC, and the practice is now looking to align its guidelines for performance with some of the things that payers are asking them to do, Broun said.

Problems were encountered in 2014 when OHC adopted a new EMR platform for recording and interpreting data and it wasn’t appropriate, which led the practice to temporarily abandon the effort. “It didn’t allow us to track the things that we wanted to track, so rather than being arbitrary and diminish what we were trying to achieve, we suspended our look at quality measures,” he said.

Patient perceptions of care were described as paramount and also as a collective tool that could be used to inform and motivate physicians.

Schiano said OHC has been using a consumer survey tool called Net Promoter that helps to determine whether your customers will grouse about your business or talk about it enthusiastically.

“What research has shown is that if somebody is a Net Promoter, they’re an advocate for you,” Schiano said. “They’re very difficult to dissuade, they’re a believer in your practice, and they will champion your cause. The long-term value to your practice is significant. We do these surveys on every billable that comes into the practice, and we score our physicians. We establish a number they can look at, and when the doctors see those numbers, due to their competitive nature, they want to deliver increased satisfaction to their patients. They want to be on the top of their game, and that ultimately is delivering value to the patient, but also value back to the practice. As we move forward, we’ll continue to build on that.”

The numbers that come of the metrics and survey tools should not be a closely guarded practice secret, the panelists said. The more transparency there is, the more likely other employees besides doctors are likely to recognize the need to try harder.

“My vision is that in each practice site, the entire practice is aware of how we’re performing in terms of patient satisfaction,” Schiano said. ”How you do that is you literally put the numbers up on your bulletin board each week. You have morning huddles with your staff. You have that level of transparency there, so that it becomes ingrained in the practice beyond the physician, because if the physician is doing it but the person at the front desk who’s doing the checking-in isn’t doing it, you’ve diminished everything you’re trying to achieve.”

Ultimately, a practice has to be forward-looking so that it has performance measuring systems in place and working successfully, because the demand for these will only increase, panelists agreed. Not only that, armed with reliable statistics on the value of its medicine, a community oncology practice’s bargaining power with payers and its ability to justify itself as a value-based operation will be enhanced, they said.

“You can’t meet the CMS guidelines unless you have the analytics to demonstrate that you’re performing. This is tough and—let’s be clear—this is a cost that we all have to bear to build that architecture and to ensure that we have the capability in our people to extract that data and to be able to give it to the various payers. That’s not an overnight mechanism,” said Diaz.