The analysis and assessment of physician productivity that
falls below employer expectations present unique challenges
to both the employing organization and the physician.
Recently, in the throes of changing practice economics,
longstanding, community-based private practice physicians
have also been attracted to hospital or system employment
as a default, seeking “rescue” from a perceived financial
unraveling of their own practices. While they often rely on
hospitals and health systems to provide a “soft landing” in
exchange for capturing their patients and their attendant
clinical activity, an ongoing source of frustration for the
health system/hospital is often the failure of these physicians to maintain levels of clinical productivity characteristic
of their previous practice environments.
That said, hospitals and health systems do benefit materially from control and ownership of physician groups, as this
facilitates maintenance of clinical activity within their system
(e.g., admissions, ancillaries, and referrals). In turn, physicians
enjoy a reasonable measure of professional autonomy within
a less productivity-oriented environment.
Both physician employment models have expectations for
strong provider productivity, but hospitals and health systems
particularly so, in part to offset the financial losses common
to these employment structures. As it relates to physicians
attracted to the hospital/health system model, complications
may also arise over the poor alignment of productivity expectations, particularly if these were not clearly articulated during
recruitment or were not transparent in the physician’s employment agreement, or both.
When lower-than-expected productivity occurs, this places
considerable stress on the employer-physician relationship and
highlights unclear or ambiguous expectations. The hospital/
health system expects strong productivity and intra-system
referrals; the doctor may wish to teach or perform research.
The following analyses spotlight both root causes of
lower-than-anticipated clinical productivity as it would apply
to either employment model, as well as steps to clarify where
the responsibilities underlying these root causes may be
assigned, thereby suggesting corrective actions.
Notwithstanding the steady movement of physician payment models toward pay for performance—with
foundations built on quality, safety,
patient experience, and reduction in
the cost of care—physician productivity,
as measured by factors such as relative
value units (RVUs), work RVUs (wRVUs),
or simply old-fashioned cash, continues
to be central to physician compensation in many practice
environments. Based on the employment model they have
chosen, important differences can also be observed in the
physician’s reaction to productivity demands. This is particu-
larly noticeable when comparing the environments of the two
most common employment models, highlighted below:
and -Managed Practices
Such practices, irrespective of size, tend to struggle less with the
issue of physician productivity as a defining compensation metric. Given that these practices lack an outside financial sponsor
such as a hospital or health system, funding sources available
for physician compensation are finite and obvious to all.
This reality creates little conflict within the group. Aware of its
incentives and structure, these physicians willingly joined the
group, and their response to productivity targets align with both
the group’s culture as well as their own internal compasses.
Health System/Hospital-Sponsored (-Owned)
and -Managed Practices
Such cultural norms tend to be less evolved within hospital- or
health system-sponsored physician practices. Physicians who
choose these employment models, particularly those who
have just completed residencies or fellowships, may also be
less focused on overall compensation, in addition to having
scant interest in the business or management side of medicine. Other factors are also a draw, such as opportunities to
teach, do clinical research, or focus on other dimensions of
health care such as new delivery models or the transformation
of clinical practice.
The differential diagnosis of low physician
productivity and how to improve it
By Gordon W. Josephson, M.D., M.P.H.