| Incentive Based Compensation, Part 2: The Limitations of Spreadsheets |
Dr. Neal Little, MD, FACEP, is an emergency physician in Chelsea, Michigan and an adjunct clinical professor in the Department of Emergency Medicine at the University of Michigan Medical School. In 1999, Dr. Little was faced with the daunting task of managing an increasingly complex incentive payment program for a growing provider group. He met that challenge by implementing a computer system to handle the idiosyncrasies of a diverse set of requirements needed by each medical director for each facility to fairly pay each clinician. Sheila Conant interviewed Dr. Little about the benefits a computer system can deliver in paying providers incentive based compensation. This is the second article in a four part series.
Sheila Conant: Talk about using spreadsheets to calculate incentive based pay.
Dr. Little: Perhaps you can write macros to support some of these things, but it's not sophisticated enough to handle all types of incentives; it's not a real database. You need to have a real database that you can store things in and do calculations on. It's just too simple and is simply prohibitive for large groups across multiple sites [to use spreadsheets]. The other thing is, the next level up for a larger group is to track all these things for sites that have different fee schedules , different work schedules, different definitions of midnights or double-coverage facilities, or whatever, so that then kicks it up another notch for complications and complexity.
Here's a good example. If you are called in early, there can be a bonus. If you are called in because it's so busy, then the bonus isn't necessary if a physician is paid based on productivity. But when productivity doesn't measure up as enough, then you can use a bonus. This type of either/or logic is too complicated for spreadsheets.
Shiela Conant: So what does a large group do to manage incentives without a software system?
Dr. Little: It's extremely labor intensive. Another one of the principles of using [a computer system] is that you should only touch the data once. Every time you touch it, you have the potential for data input error, and then tracking them back without a sophisticated system becomes more work than putting the data in to begin with! So, if every time you touch the data there is a chance to make a mistake on it, you just multiplied the potential of error. And there is nothing that builds distrust among physicians more than what they think is an error. Usually they are not worried if it's more pay, but if it's less, there will be suspicion that something was done on purpose when, in fact, it could be done in error. If the physician can see the elements or weights given to various undesirable shifts or how RVUs are valued, the distrust is reduced. For bonuses, you may want to set aside some money and devise a point system for divvying up the pool for whatever it is you want to incentivize and reward; you need a system to track the components for that kind of bonus pay. The other major component to an incentive payment system, besides the concept of fairness to the physician, whatever they mean by that, is when incentives are put on by management or aligned with the hospital, to either see more patients or see patients more productively.
In the next article, Dr. Little will answer the question, “Do you think incentives work?”
Beth Maybee is a writer for COREmatica. For more information, visit http://www.corematica.com, email at bmaybee@corematica.com or call at 734-418-2310.
Article Source: UnArchived Articles
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