Rural healthcare organizations face unique challenges when it comes to recruiting, retaining, and incentivizing top medical talent. One of the most effective ways to address these challenges is by integrating incentive compensation into physician and advanced practice provider (APP) compensation plans. However, rural organizations must carefully design incentive models that are both financially sustainable and reflective of their community’s specific healthcare needs.
This presentation explores the strategic incorporation of incentive compensation programs in rural healthcare organizations. We discussed how tailored incentive structures—ranging from performance-based bonuses to patient satisfaction and quality care incentives—can motivate physicians and APPs while driving measurable improvements in healthcare delivery. Gain insights on how to design, implement, and manage incentive plans that are both fair and motivating, ensuring long-term success for healthcare providers and the rural communities they serve.
Key learnings include:
- Understand the role of incentive compensation in rural healthcare settings: Learn the unique challenges rural healthcare organizations face and how compensation structures can play a role in recruitment, retention, and overall satisfaction.
- Identify key performance indicators (KPIs) for incentive compensation plans: Explore measurable goals such as quality of care, patient satisfaction, service utilization, and operational efficiency that align with rural healthcare objectives.
- Design sustainable compensation models: Gain insights into cost-effective, customizable incentive structures that take into account the financial constraints of rural organizations while motivating physicians and APPs.
- Address potential pitfalls in implementing incentive plans: Identify common mistakes and barriers such as fairness, transparency, and alignment with organizational goals, and learn how to avoid them.
- Learn from real-world case studies: Examine successful examples from rural healthcare organizations that have effectively implemented incentive-based compensation models.
Q&A
Changing compensation models or even incorporating incentives can make providers nervous. So you want to make sure that you have a good relationship with the providers prior to starting such an effort and you want to make sure that you have a good provider leadership team to help establish compensation models. Work to ensure to providers that this is not a “cost cutting” program, but a way for the providers and organization to meet common goals. Also recognize that there is no compensation plan that will make everyone happy – you are not designing compensation for an individual but for an organization – Focus on consensus, fairness and effectiveness.
Lots of organizations pay for good citizenship which could include patient satisfaction. Many organizations use Press Ganey or some other form. Its good to track this information. But patient satisfaction is an expectation too.
If your organization does want to compensate for patient satisfaction think about choosing one main question from the survey to monitor – i.e, how likely are you to recommend this provider to family and friends. We also do not recommend paying for good citizenship in a way that simply pays for attending meetings. You want providers who want to be informed and engaged, not who need to be paid for participating in general medical staff requirements.
An appropriate FMV analysis takes this into consideration and normalizes; this is an incorrect equivalency of thinking survey data is the same as FMV.
OBGYN – The OBGYN billing (especially for OB patients and the global delivery billing) can make an incentive model very complex. It’s not impossible to develop. Often patients will see multiple providers during their pregnancy as they may not know who will be delivering them (unless its scheduled). There are ways to develop a pool model, but you have to be careful with those. Developing this type of model is beneficial to reward productivity, but it can get manual which leaves room for error. It is also important to consider how sometimes aging providers desire to move to more a GYN focused and be removed from OB call. This should be considered in developing any incentives.
So different states have different criteria when it comes to the supervision of APPs. States can be full practice authority (or unrestricted), reduced practice authority, or restricted practice authority. In most cases, even with new providers there is a mentorship period and I do think it acceptable to compensate supervising physicians for this work. As the APPs become more comfortable in their roles and physicians are comfortable with medical decision making, this supervision burden becomes less. So it would be recommended to set a time limit on how long to supervise an APP. In rural communities there could be a good bit of turnover with providers, so that is a challenge, but organizations could think about compensating supervision for new grads differently than experienced APPs.
