Member Briefing for the Teaching Hospitals and Academic Medical Centers Practice Group of the American Health Lawyers Association

Authors: Karl A. Thallner Ronald L. Vance, Managing Director, Navigant

Overview and Executive Summary

Organizations with employed and affiliated physician faculty members have accelerated the refinement of their physician faculty compensation plans to prepare themselves to bridge between the current “Curve 1” world (where providers are primarily paid based on fee-for-service reimbursements) to a “Curve 2” world (where providers are primarily paid based on outcomes and/or reduced costs). Organizations have focused mostly on modifying the predominant base-plus-incentive design approaches to include expanded minimum-work-standards (MWS) requirements and to include payments for higher levels of quality, service, efficiency, and other non-throughput activities. As Academic Medical Centers (AMCs) also expand their faculty plans to include geographically dispersed and predominantly clinically focused physicians, they also are utilizing modified “bridge” plan designs with a mixture of base, production, and other Curve 2 performance incentives. As the transition to the Curve 2 world progresses, many AMCs feel enhanced urgency to design and implement more-progressive physician faculty compensation plans.

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