Performance Pay for MGOA Physicians
Performance Pay for MGOA Physicians
The Massachusetts General Orthopaedic Associates are a physician group within the MGH formahospital. MGH was the first hospital to provide orthopedic services in the country, and since its inception, MGOA has led the way in clinical care and research. Although their reputation for high level research and patient care was impeccable, MGOA faced serious financial deficiencies that put the future of the group in danger. The group was hemorrhaging money at a rate of hundreds of thousands of dollars per year. To help control and solve these financial woes, MGOA hired Dr. Harry Rubash and Dr. James Herndon. Because of their success with the orthopedics department at the University of Pittsburgh, MGOA was hopeful that Rubash and Herndon could turn their books around. For starters, it is important to understand what put MGOA in such a dire position to begin with. Their problems began with decreasing payments from private and public(government) insurers. While this was the direct cause of the deficits, more importantly, it exposed the flaws in their structure. Their structure before Rubash and Herndon was that of a flat salary based on seniority. There was little to no component of compensation based off of productivity. In addition, doctor’s salaries are often augmented somewhat by grants that do not contribute to the group’s bottom line. Grants are typically between 80 and 100 thousands dollars based on the time expected to be spent on research based on a 40 hour workweek. For example, a $100,000 grant expects 40 hours in the lab where an $80,000 grant expects 30 hours. While MGOA doctors work much more than a 40-hour workweek, the time that they spend doing research limits the time that could be spent doing more profitable activities. This incentive structure incentivized doctors to remain very dedicated to their research, while not bringing in adequate revenues to cover their salaries and other costs. The mission of MGOA was
The Massachusetts General Orthopaedic Associates are a physician group within the MGH formahospital. MGH was the first hospital to provide orthopedic services in the country, and since its inception, MGOA has led the way in clinical care and research. Although their reputation for high level research and patient care was impeccable, MGOA faced serious financial deficiencies that put the future of the group in danger. The group was hemorrhaging money at a rate of hundreds of thousands of dollars per year. To help control and solve these financial woes, MGOA hired Dr. Harry Rubash and Dr. James Herndon. Because of their success with the orthopedics department at the University of Pittsburgh, MGOA was hopeful that Rubash and Herndon could turn their books around. For starters, it is important to understand what put MGOA in such a dire position to begin with. Their problems began with decreasing payments from private and public(government) insurers. While this was the direct cause of the deficits, more importantly, it exposed the flaws in their structure. Their structure before Rubash and Herndon was that of a flat salary based on seniority. There was little to no component of compensation based off of productivity. In addition, doctor’s salaries are often augmented somewhat by grants that do not contribute to the group’s bottom line. Grants are typically between 80 and 100 thousands dollars based on the time expected to be spent on research based on a 40 hour workweek. For example, a $100,000 grant expects 40 hours in the lab where an $80,000 grant expects 30 hours. While MGOA doctors work much more than a 40-hour workweek, the time that they spend doing research limits the time that could be spent doing more profitable activities. This incentive structure incentivized doctors to remain very dedicated to their research, while not bringing in adequate revenues to cover their salaries and other costs. The mission of MGOA was