Using Organizational Philosophy to Create a Self-Sustaining Compensation Plan Without Harming Academic Missions

Abstract

Problem: Academic physician reimbursement has moved to productivity-based compensation plans. To be sustainable, such plans must be self-funding. Additionally, unless research and education are appropriately valued, faculty involved in these efforts will become disillusioned, yet revenue generation in these activities is less robust than for clinical care activities.

Approach: Faculty at the Department of Medicine, University of Florida Health, elected a committee of junior and senior faculty and division chiefs to restructure the compensation plan in fiscal year (FY) 2011. This committee was charged with designing a new compensation plan based on seven principles of organizational philosophy: equity, compensation coupled to productivity, authority aligned with responsibility, respect for all academic missions, transparency, professionalism, and self-funding in each academic mission.

Outcomes: The new compensation plan was implemented in FY2013. A survey administered at the end of FY2015 showed that 61% (76/125) of faculty were more satisfied with this plan than the previous plan. Since the year before implementation, clinical relative value units per faculty increased 7% (from 3,458 in FY2012 to 3,704 in FY2015, P < .002), incentives paid per faculty increased 250% (from $3,191 in FY2012 to $11,153 in FY2015, P ≤ .001), and publications per faculty increased 15% (from 2.6 in FY2012 to 3.0 in FY2015, P < .001). Grant submissions, external funding, and teaching hours also increased per faculty but did not reach statistical significance.

Next steps: An important next step will be to incorporate quality metrics into the compensation plan, without affecting costs or throughput.

Figure 1

Total and normalized for faculty number clinical relative value units (RVUs) for the year prior to (fiscal year [FY] 2012) and three years after implementation (FY2013–FY2015) of the Department of Medicine, University of Florida Health, compensation plan. Asterisk indicates P < .002.

Figure 2

Total and normalized for faculty number external research funding for the year prior to (fiscal year [FY] 2012) and three years after implementation (FY2013–FY2015) of the Department of Medicine, University of Florida Health, compensation plan (not significant).

Figure 3

Total and normalized for faculty number publications for the year prior to (fiscal year [FY] 2012) and three years after implementation (FY2013–FY2015) of the Department of Medicine, University of Florida Health, compensation plan. Asterisk indicates P < .001.