JUNE 3, 2017

Welcome to the Health Care Compensation Update eNewsletter
Editor: Benjamin R. Grant

The Healthcare Executive's 2-minute Read on Priorities in 2017: Labor Optimization and Human Resources

Labor Optimization: A merger or acquisition may make great sense on paper, but hospitals often encounter difficulty in realizing the economic benefits of the deal. Although there is a high level of consolidation in healthcare, the inability to execute workforce or expense reductions remains equally steady. Brad Fetters, Chief Operating Officer of Prism Healthcare Partners, recommends hospital and health system CEOs push to finally realize the labor and expense economies of scale that were expected. Also important is the continual discipline and accountability to drive performance and labor productivity improvements.

Human Resources/Compensation: In the shift to pay-for-performance, it is essential to reinforce a performance-based culture within the hospital that incentivizes improvement and allows organizations to attract and reward top performers, suggests Neil Faux, SPHR, SWP, Managing Director with Prism. Compensation and benefits drive culture, and there are specific areas where hospital leaders should focus their efforts in 2017. First, leaders must know their market. Hospitals no longer only compete with other hospitals. The move to outpatient and retail healthcare has changed the labor market dramatically. Combined with a tumultuous regulatory environment where minimum wage and overtime rules are changing, it is urgent for HR departments to redefine the labor market where they compete and enhance compensation strategies to attract and reward the talent required to deliver quality patient care. Second, outdated and inaccurate job descriptions are a common challenge for organizations, especially on the heels of reorganizations and mergers. Inaccurate job descriptions make it difficult for HR departments to ensure an accurate benchmark comparison when performing market reviews. These job description should be updated. Third, market adjustments are vital to ensuring an organization is market-competitive. There are a variety of methods on how to calculate these adjustments. In many cases, market adjustments become an entitlement to employees and can overshadow merit increases. Organizations must understand the role of market and merit strategies to ensure both are aligned and supportive of the broader compensation strategy.

FCA Issues to Watch: FCA Claims Concerning Physician Compensation
Physician employment arrangements with hospitals have remained a significant area of regulatory scrutiny in recent months with the announcement of several high profile settlements and decisions in key FCA cases involving Stark and AKS-related issues. While the noted settlements evidence the potential liability for improper arrangements, several cases have demonstrated the regulatory flexibility and defensibility of employment if employment arrangements are structured appropriately under Stark and AKS. This article provides a detailed overview of relevant settlements and cases.

Study Finds 'Serious Staffing Concerns' for Hospitals
Hospital Turnover is "Reaching Epidemic Proportions," According to a new Report from Leaders for Today.

  • Leaders for Today released a newly-released report that found "unprecedented turnover and attrition" all the way up to the C-Suite, and that hospitals are on a pace of needing to "replace virtually half of their staff every five years."
  • The survey of 852 healthcare job candidates found that hospitals have slow hiring processes, which is causing them to lose candidates who find other job opportunities more quickly.
  • Retirement is also part of the staffing problem, with nearly half of respondents reporting they plan to stop working within the next 10 years and 22% expecting to retire within five years.

Even though there are some who argue that the nation's clinician shortage isn't real, there are many hospitals in certain areas across the U.S. that are undoubtedly struggling to meet the demand for care services. The country's aging population is expected to increase that demand but more physicians are planning on retiring early. Early retirement will be the main contributor to a projected shortage ranging between 34,600 and 88,000 physicians by 2025, according to new estimates from the Association of American Medical Colleges. Hospitals are "losing critical employees faster than they can replace them" and that the "average hospital has hundreds of open positions at any one time," Bill Haylon, CEO of Leaders for Today, said in a statement. A big issue that many clinicians are dealing with on a daily basis is the large number of administrative tasks they are required to do, which has in turn caused more job burnout over the past few years. There have also been a lot of layoffs at hospitals lately. More and more care delivery systems have been reporting substantial financial losses as it has been challenging to keep up with the fast-changing industry, partly due to major healthcare policy changes. Some have been laying off staff members and restructuring their workforce in attempts to improve quality during the industry's move toward value-based care. Turnover has been such a big issue at hospitals that nearly 43% of respondents said they have been at their current hospital for fewer than two years and 37% plan to leave their hospital within the next two years, the report states. Some states are tackling shortages by lifting restrictions on nurses. Telemedicine is also being used to increase access to care. A new survey found telemedicine is becoming mainstream at many hospitals.


Healthcare Human Resources (HR) Software Market: Global Major Key Players Research - Forecast to 2021
Global Healthcare Human Resources (HR) Software Market- Forecast to 2021 Healthcare is one of the most conventional industries, across the globe. Across the world, in some of the areas of healthcare industry are yet to adopt information technology and new business process. This due to the lack of proper infrastructure for the healthcare industry. Furthermore in certain countries, the healthcare is underfunded, understaffed, and overloaded. It is expected that in the upcoming years the healthcare industry will seek solution for the human resource management. Currently the human resource market for healthcare is around $1 billion CAGR and expected to grow at low CAGR during the forecast period. The report provides comprehensive view about the healthcare human resources software market.

Gender, Specialty, Age And Productivity Among Factors in Physicians' Compensation
The Medical Group Management Association (MGMA) has released their 2017 Physician Compensation and Production Survey which revealed that age and productivity are contributing factors that impact gender disparity in physicians' compensation. Based on comparative data of more than 120,000 providers across more than 6,600 groups, MGMA's Physician Compensation and Production Survey is the most comprehensive sample of any physician compensation survey in the United States (U.S.). The survey represents a variety of practice types including physician-owned, hospital-owned, academic practices, as well as providers from across the nation at small and large practices. Highlights from the survey include:

  • Specialty: Specialty area influences the disparity in total compensation with males across all specialty areas earning more than their female counterparts. Males practicing in primary care reported earning 17 percent higher compensation while males in specialty care reported earning 37 percent more than females in the same practice area.
  • Experience: Survey results show that years in a specialty area may play a role in the gap in total compensation. For example, males are paid over 20 percent more than females in the specialty areas of family medicine and general pediatrics but have an average of seven years more experience than their female counterparts who participated in the study. As there are now more females graduating from medical schools than males, females represent a greater percentage of the population of physicians that are early in their career.
  • Productivity: Productivity also plays a role in the disparity in total compensation. It is a significant factor in the development of today's physician compensation packages. Males in invasive-interventional cardiology are making over 25 percent more than their female counterparts but show 42 percent greater median work relative value units (RVUs), a measure of value used in the U.S. Medicare reimbursement formula for physician services. Meanwhile, male general orthopedic surgeons make almost 50 percent more than their female counterparts with over 80 percent greater median work RVUs. The large difference in the data may be due to the number of women in these specialty areas and how much experience they have.

Featured Webinar: The Art and Science of Storytelling to Engage and Inspire Health Care Teams

Thursday, June 8, 2017
2:00 p.m. ET, 1:00 p.m. CT, 12:00 p.m. MT, 11:00 a.m. PT
(90 minute webinar with live Q & A)
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Margaret Cary, MD, MBA, MPH and co-presenter Tara Satlow, PhD will discuss the science of storytelling as an emotional and physiological influence practice. Attendees will learn how to employ practical tools, techniques, and tips for developing the art of leading through narrative and be able to recognize compelling storytelling to enhance team engagement, purpose, and connection.

Average Salary for Industry: Health Care Information Technology (IT) Services

http://www.payscale.com/research/US/Industry=Health_Care_Information _Technology_(IT)_Services/Salary

See How 7,700 HR Leaders, Executives and Comp Pros Are Approaching Pay this Year
In PayScale's eighth annual Compensation Best Practices Report, we touch on everything from compensation budgets to variable pay to talent retention to shed light on what organizations are focusing on in 2017 as it pertains to compensating employees. Learn about: Top comp priorities and concerns for orgs in 2017, The disconnect between employee and employer sentiment around pay, and How the most successful companies pay differently.

For a complimentary PayScale benchmark analysis for a position of your choice, please email BenG@payscale.com.

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Health Care Compensation Update e-Newsletter is one of a family of free e-Newsletters providing a complimentary video presentations and regularly updated news and key resources on major health care issues such as pay for performance, bundled payments and MACRA. To view and subscribe to other e-Newsletters go to www.HealthCareeNewsletters.com.


Benjamin R. Grant