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*Department of Anesthesiology, University of Texas Medical Branch, Galveston, Texas; Department of Anesthesia and Critical Care, The University of Chicago, Chicago, Illinois; Department of Anesthesiology, The University of Pittsburgh, Pittsburgh, Pennsylvania; and Department of Anesthesiology and Pain Management, University of Texas Southwestern Medical Center at Dallas, Dallas, Texas
Address correspondence and reprint requests to Amr E. Abouleish, MD, MBA, Department of Anesthesiology, University of Texas Medical Branch, Galveston, TX 77555-0591. Address e-mail to aaboulei{at}utmb.edu.
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Abstract |
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Introduction |
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Methods |
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The survey included sections on demographics of the department, types of incentive plans, and structure of plans. Requested demographic information included the numbers of faculty members, residents, certified registered nurse anesthetists, and hospitals where care was provided. For the number of residents, the number of resident positions available in the 2003 National Resident Match Program (Match) was noted for each group (including groups that did not respond) (10). An incentive plan for clinical productivity was considered to be present if 1) clinical productivity was measured and 2) compensation was varied on the basis of the measured productivity. If there was no incentive plan, the respondent was asked if the department was considering a plan and, if so, the reasons for consideration.
For the departments that reported an incentive plan, additional information was collected, including the number of years the plan had been in place and, for those plans in existence <5 yr, whether a previous plan had been replaced and, if so, why the plan had been replaced. Respondents were asked to estimate the percentage of total compensation that was productivity based and variable for a typical clinical faculty member as <5%, 5%–10%, 11%–25%, 26%–50%, or >50%. The intervals for paying clinical incentives and for evaluating the incentive plan were determined as monthly, quarterly, semiannually, or annually. If the department provided anesthesia services in more than one hospital, the respondent was asked if incentives were paid differently for different facilities and, if so, why. Respondents indicated if and what kind of quality measurements were used in the incentive plan. Finally, the existence of an incentive plan for nonclinical work was noted.
Clinical incentive plans were grouped according to the primary measure of productivity in the following categories: Charges, total charges or total ASA units billed; Time, time units or minutes billed; Shift, shifts worked or available; and Other, which includes revenue collected (Table 1). Each respondent was asked to complete only the section of the survey that characterized the primary measure of productivity used in his or her incentive system. Follow-up communications with respondents who initially reported no incentive plan identified a fifth category, subsequently termed Late/Call, as distinct from the Shift category. The Shift category included plans that measured all clinical activity during regular hours, evenings (late rooms), and nights and weekends (call). The Late/Call category included plans that did not quantify shifts worked during regular hours but measured late rooms or calls and paid faculty additional compensation for working at those times. Many departments that originally stated that they had no incentive plan revised their response to indicate that they used a Late/Call system.
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For each category of incentive plan, specific data tailored to the primary measure were collected. For the Charges category, the respondent was asked to define the primary unit of measure; to note whether the plan modified the measurements on the basis of concurrency (i.e., staffing ratios), daily OR schedule management (i.e., OR schedule supervisor), mentoring new residents, or assignment to the preoperative day surgery clinic; and to note whether and how the plan measured clinical care provided in remote sites outside the OR, obstetrical suites, pain-management services, or intensive care units. Finally, the respondents were asked to note whether clinical activity in late rooms or on call was given extra credit beyond charges or billed ASA units. The survey allowed for separate treatment of specialty calls (e.g., transplantation, cardiac, pediatric, pain management, and critical care).
Similarly, respondents who reported that they used the Time category were asked to define the primary unit of measure used; to note whether the plan modified the measurement for concurrency (i.e., staffing ratios) or personally performed cases; to note whether and how the plan gave credit for non-time-billable services (specifically, OR schedule supervisor, the preoperative day surgery clinic, turnover time, and base units >6); and to note whether and how the plan incorporated clinical care provided outside the OR (billed with or without time), including remote sites, obstetrical suites, pain-management services, and intensive care units. Finally, the respondents were asked to note whether clinical activity in late rooms or on call was given extra credit beyond the time billed. The survey allowed for separate treatment of specialty calls.
Respondents who reported that they used the Shift category were asked to define the primary unit of measure used; to note whether the plan modified the measurements for personally performed cases; and to note whether and how the plan gave credit for OR schedule supervisor or mentor to new residents. The respondents were asked whether (and how) the assigned value of shifts worked differed by different types of surgical services (within the OR) or by location (specifically, day surgery preoperative clinic, remote locations, obstetrical suites, pain-management services, and critical care services). Finally, the respondents were asked to note whether clinical activity in late rooms or on call was given extra credit beyond the shifts worked. The survey permitted separate treatment of specialty calls.
For the Late/Call category, the specific questions related to types of shifts (e.g., late rooms, weekday call, or weekend calls) governing extra pay. For late room incentives, the survey queried how payments were calculated (e.g., hourly wage or guaranteed hours).
For the Others category, no specific questions were asked. Because detailed questions were designed with the primary measure used as a basis, it was not possible to design questions for this category.
Data were analyzed by overall department size, number of hospitals covered, and category of primary measurement. Comparisons were made with Microsoft Excel XP (Microsoft Corp., Redmond, WA) and 
2 tests. A P value of <0.05 was considered significant.
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Results |
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Table 2 summarizes the percentages of departments that had no incentive plan (29%), only Late/Call plans (30%), or complete plans (41%) and the breakdown of those plans according to group size and the primary measurements used in complete plans. Among departments with fewer than 20 faculty members, only 25% had complete plans. In contrast, among departments with 
40 faculty members, 55% had complete plans. The number of residents was not apparently associated with the prevalence or type of incentive plans (Table 3). However, among departments with a ratio of total faculty to total residents <3.5 (the median ratio), 11 of 13 departments with complete plans used Shift systems; among departments with a ratio of total faculty to total residents >3.5, 6 of 17 departments with complete plans used Shift systems (Table 4). In either group, >50% of departments had either no incentive plan or Late/Call plans.
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Although two departments reported incentive plans that had been used for >20 yr (one based on Shifts worked and one on Charges), 64% of the departments had had incentive plans (including Late/Call plans) in place <5 yr, and 40% had been used for <3 yr. The distribution was similar for just those departments with complete plans (58% for <5 yr and 45% for <3 yr).
Incentive payments represented 
25% of total compensation in 53 (90%) of groups with incentive plans (i.e., 10% of the total compensation in 44% of groups and 11%–25% in 46% of groups). Three of six groups that reported >25% of total compensation used an incentive based on Charges.
Fifty-three percent of departments paid incentive compensation monthly, whereas 32% paid quarterly. Incentive systems were reevaluated annually by 47% of departments and semiannually by 10%, and they were not evaluated on a regular schedule by 32%. Almost all (95%) departments that performed reevaluations used faculty satisfaction to rate incentive plans. In addition, 32% of groups evaluated their programs by using one or more of the following: individual productivity, group productivity, or university/faculty practice plan input.
Of 59 departments with an incentive plan, 46 (78%) provided care at more than 1 facility. Only 14 (23%) departments had different values for work performed in the different facilities. The most frequently cited reason for differently weighting clinical work was that payer mixes varied between facilities (e.g., one facility was an academic medical center, and the other was a community hospital or Veteran’s Administration hospital). Additional reasons included different call requirements (e.g., when the other facility was an ambulatory surgical center), and one facility provided the incentive payments for that specific facility.
For the groups responding in the Late/Call category (n = 25), 76% paid for late room coverage. Almost all compensated on the basis of an hourly wage and not on charges. Some groups guaranteed a minimum wage for availability (e.g., 1 h). Most (56%) paid for call by using a variable-compensation plan. Smaller percentages paid only for weekend calls (20%) or extra calls (16%).
Fourteen (82%) of 17 groups using the Shift system defined the unit of measure as "clinical days worked" (i.e., if a faculty member worked 1 day in a clinical setting or was on call, that faculty member received credit for a clinical day worked) (6). Of the remaining three groups, two defined the shifts worked by the hours on duty (e.g., an in-hospital call of 16 h was worth twice an 8-h regular shift worked). Finally, one group varied the value depending on the shift worked (i.e., the group developed an individualized point system for which each shift was given a predetermined value). In addition to defining the value of shifts worked, 8 (47%) of the 17 groups provided credit for the OR schedule supervisor (Table 5). A smaller number accounted for personally performed cases (18%) or mentoring new residents (12%). Pain-management services were modified by using charges in only three groups (18%), and the others (72%) did not adjust the clinical day worked. Eight groups (47%) gave extra compensation for working late rooms. A smaller number gave extra credit for in-hospital call (24% for the main OR and 30% for labor and delivery) and out-of-hospital call (24% for specialty OR call, 18% for pain management, and 9% for critical care).
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The next most common complete incentive plan was based on Charges (n = 9). Gross charges billed were used in six groups. One group modified the charges on the basis of medical direction modifiers used in billing. This group, which was the only group that accounted for differences in concurrent coverage, credited a faculty member 100% of the charges if the personally performed modifier was used (AA modifier) but discounted charges by 20% if the medical direction modifier was used. Two groups converted all charges to units. One used ASA units billed as its measure and converted all relative value units (RVUs) to ASA units. The other group used RVUs as the primary measurement and converted ASA units billed to RVUs. A smaller percentage (33%) in the Charges category than in the Shift category gave credit beyond billed charges ("extra credit") to the OR schedule supervisor. Seven groups (77%) did not give credit for work performed in the outpatient preoperative evaluation clinic. No group gave extra credit to faculty who worked in obstetrical suites. Similarly, concerning late rooms and call, most groups did not modify billed charges for this work. Three groups (33%) did pay for late rooms, but only two groups gave extra credit for any kind of call (in-hospital OR, in-hospital labor and delivery, out-of-hospital specialty OR call, pain management, or critical care).
Each of the five groups that used Time as the basis for incentive payments used billed time—either time units or actual billed minutes—as the primary unit of productivity. Three of the five groups developed a department-specific formula to convert into a time the value charges or the number of patients seen in pain-management and critical care services. One group gave extra credit beyond time billed to the OR schedule supervisor. Two groups accounted for concurrency differences. Only one group accounted for turnover time, as previously described (11). No group modified time billed in cases with high base units (e.g., seven or more base units). One group modified time billed for work performed in labor and delivery. Forty percent (two groups) gave additional credit for late rooms worked. Concerning call coverage, almost all the groups did not give extra credit, and most did not even include call in their system. For in-hospital OR or obstetric anesthesia call, only one group gave extra credit, and three groups did not include these modifiers in their systems. No group included out-of-hospital specialty OR (e.g., pediatric call), pain management, or critical care call in their systems. Concerning quality of care, 47 (80%) of 59 departments that had clinical incentive plans did not include quality measurements. Of the remainder, all used a form of peer evaluation as the quality measure.
Of the 49 departments with None or Late/Call (i.e., did not have a complete incentive plan), 13 (26%) stated that they were under pressure to implement an incentive plan. All specified that either the medical school (dean or faculty practice plan) or the hospital administration was the source of the pressure. Only one stated that the pressure was also from the department’s faculty.
Finally, although specifics of nonclinical incentives were not asked, their existence was noted. Groups that had no incentive plan for clinical care also had no incentive plan for nonclinical work. Of the 59 groups with an incentive plan for clinical work, 27 had an incentive plan for nonclinical work. Groups with a complete plan (Shift, Charges, Time, or Other) had a significantly more frequent prevalence of nonclinical incentives than those with only a Late/Call system (53% versus 36%, respectively).
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Discussion |
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Although the method of a survey limits the information collected and the conclusions that can be drawn, the results provide important background information for the development and refinement of incentive plans in academic anesthesiology departments. The response rate of 64% for this study was similar to that for a previous survey of SAAC/AAPD concerning financial and management issues (11) and was two to three times more than in national surveys used for benchmarking productivity and compensation (12). Using positions available in the Match as a demographic measurement, we compared responders and nonresponders. The mean ± sd numbers of positions for responders and nonresponders were 11.2 ± 6.0 and 8.2 ± 4.9, respectively (not significant). Although nonresponders included a larger proportion (36%) of smaller departments (fewer than seven positions) than responders, of which only 25% were smaller departments, we doubt that this difference was sufficient to bias our results.
As noted by some of the respondents in the comment section of the survey, clinical incentives have not been shown to increase clinical activity by anesthesiology departments. The prevailing impression is that clinical incentive plans for anesthesiologists can minimally influence overall OR productivity because the clinical productivity of an anesthesiology department is dependent on factors that anesthesiologists do not control, such as OR case scheduling, block allocation, surgical duration, transportation, turnover time, and determination of the number of ORs to staff (6,8,9,13,14). However, one department (of two of our authors) has successfully argued to hospital administration that, as part of the implementation of a clinical incentive plan for anesthesiologists, anesthesiologists should have more control over OR management issues because these issues directly influence overall OR and anesthesiologists’ productivity.
As seen in our results, some departments without a clinical incentive plan are being encouraged by hospital or medical school administrators to consider implementing clinical incentive plans. One likely assumption on the part of institutional administrators is that an incentive plan for anesthesiologists will increase the number of surgical cases. It is not clear that incentive plans can generate this effect, although clinical incentive plans have been shown to better align compensation with clinical activity (15). As an example, if covering late rooms is compensated in addition to the base salary, then compensation will increase for faculty who work more late rooms.
Another likely reason for administrative pressure to implement clinical incentive plans is that many of the departments are receiving financial support from the hospital or medical school (11). We identified 51 departments that responded to the present survey and to the previous survey of SAAC/AAPD concerning financial and management issues (Tremper KK, Department of Anesthesiology, University of Michigan, personal communication, 2004). Forty-five (89%) of the 51 departments replied that they receive extradepartmental stipends for staffing costs. When comparing this subset of 51 departments with the entire group of respondents, similar percentages (55% of the 52 departments versus 59% of the entire 83-department cohort) had None or Late/Call, and the same percentage (29%) had no incentive plan for clinical work.
Incentive plans can also influence compensation as total clinical faculty numbers change. If faculty numbers decrease, either overall department productivity goes down (e.g., when ORs are closed), or the remaining faculty increase individual productivity to continue to produce the same overall output (16,17). Compared with a straight-salary system, a clinical incentive system allows compensation to vary. For example, if there are 365 in-hospital calls per year, under a clinical incentive system for call, the compensation per faculty member will increase when the number of faculty members sharing call responsibilities decreases. In a straight-salary system, the compensation would not change. The purpose of the incentive system is to align compensation with clinical activity and not to necessarily increase the overall work performed by a department (i.e., to perform more cases). This study suggests that larger departments perceive a greater need than smaller departments for variable compensation plans. A larger proportion of larger departments had complete or Late/Call incentive plans compared with smaller departments. A possible explanation is that larger groups may have greater difficulties with equitable work distribution because of specialization, multiple facilities, and more faculty members.
The fact that most academic groups do not measure the clinical productivity of individuals is consistent with private-practice business models. In private-practice anesthesiology groups, the most common method of measuring clinical productivity is a subset of the shifts-worked category. Two thirds of private-practice groups responding to a survey in 2002 by the Anesthesia Administrator Assembly of the Medical Group Management Association (Scott SJ, Brevard Anesthesia Services, Melbourne, FL, and Blough GG, G. Blough Associates, Mobile, AL, personal communication, 2003) used "equal share" compensation plans in which the revenues of groups were split equally among partners regardless of any individual productivity measurement. The equal-share model assumes that all partners work an equal number of shifts and, hence, equally distributes revenue among the partners. Similar to straight-salary systems in academics, the equal-share model does not measure continuing productivity but assumes that the work will be equally distributed. However, in contrast to straight-salary plans, individual compensation will vary depending on a group’s overall productivity (overall revenue) and the number of individuals in a group.
As in our survey, the Anesthesia Administrator Assembly survey showed that the larger private-practice groups (>40 providers) used productivity-based compensation more often than the smaller groups (<20 providers). This result is consistent with the assumption that larger groups have more difficulty distributing work equally.
Furthermore, we found the absolute number of residents (via Match positions) was not as important as the ratio of faculty to residents. The implication is that the larger ratio would represent a department that functioned in part as private practice. Although the percentage of departments that had complete clinical incentive plans (Shift, Charges, or Time) did not change, the type of incentive plan was different. In the larger-ratio departments, the prevalence of Charges and Time was significantly more frequent (Table 4).
The purpose of this study was to determine not only the prevalence of clinical incentive plans, but also some of the details. In almost 90% of the groups that offer incentive payments, those payments account for <25% of total compensation. This model contrasts with the equal-share compensation plans most often used in private-practice anesthesiology, in which 100% of compensation is variable and no base salary is used for partners.
These differences in compensation models are not surprising, considering that academic departments not only must provide clinical care, but also must meet educational, research, and administrative commitments. Hence, base salary is partly intended to pay for these types of activities that may not be as easily measured as clinical activities. In this study, only 33% of the groups had an incentive for nonclinical activities. Even with a nonclinical incentive plan, a base salary plus incentive is the predominant model.
Another perspective on the differences between private-practice groups and academic departments is that, although clinical activities represent most revenue-generating activities, academic departments have been hesitant to reflect this fact in incentive plans. Almost 90% of the groups had incentive payments accounting for <25% of total compensation. This suggests that academic departments implicitly assign value to nonclinical activities. In contrast, a clinical incentive plan that highly values daily OR work without assigning implicit or explicit value to nonclinical activities likely encourages faculty to forego nonclinical work in favor of clinical activities. This antiacademic incentive even applies to research grants from the National Institutes of Health, which has a maximum individual compensation level that is well below starting salaries in many academic anesthesiology departments.
Even inclusion of incentives for nonclinical activities may fail to offset the tendency to favor clinical activities. Unlike clinical work, which can be frequently quantified and converted into incentive payments, incentives for academic activities such as publications, presentations, grant applications, and grants received necessarily must encompass a much longer time frame than the monthly or quarterly incentives provided for clinical activities in this survey. Incentive plans may therefore make clinical activities more attractive to faculty, especially junior faculty with a large debt burden.
Our survey results revealed a spectrum of system complexity. The Late/Call systems are simple incentive systems that do not include regular work hours. Faculty can simply choose whether to accept assignment to late rooms or call. In contrast, the other categories also show a spectrum of simple to complex systems. In all categories, most groups did not modify their primary measure for additional factors (Table 5). The only exceptions were the extra value given to the work performed by the OR schedule supervisor and the work performed in late rooms. The day surgery preoperative clinic was included in a large percentage of the Charges and Time systems, apparently in recognition of the value of this nonbillable work.
Because no studies have been performed to determine the efficacy of incentive plans, it is not possible to decide whether a simple or complex plan is better or whether any plan exerts positive effects on revenue or efficiency. Because it is impossible to state from current information which, if any, primary productivity measurement is most effective (6,15), it is also impossible to recommend a specific way to calculate or evaluate a clinical incentive. The most important consideration for a department that is considering instituting a clinical incentive plan or altering an existing plan is to determine what specific clinical activities require incentives. Any measurement of productivity values and devalues certain clinical services and activities (6). For instance, the Charges model values total billed charges and favors anesthesia care given to fast surgeons and specialty care (high base units) and devalues anesthesia provided in ORs that are poorly utilized, care provided for patients undergoing prolonged surgery, and unbilled services (e.g., day surgery preoperative clinic, OR schedule runner, and mentoring). The Time model values billed time and anesthesia care given to slower surgeons (less turnover time) and devalues specialty care, nonbilled time (turnovers, poor OR utilization, and day surgery preoperative clinic), and obstetric care (in states that use face-to-face time or set limits on time billed). Both the Charges and Time models can be confounded if concurrency or staffing ratios differ among faculty members. In addition, work performed on call may vary depending on utilization. The shifts-worked model values availability and devalues charges or time billed and specialty care. A Shift system is not confounded by differences in concurrency or OR utilization but does require the OR schedule supervisor to manage staffing and equality of work. In Time and Shift systems, specialty anesthesiologists may want credit for cases with high base units. The Late/Call system pays for work performed after hours (late rooms and call). The Late/Call system assumes that regular workday incentives do not influence group productivity and that the base salary provides compensation for that work. As with the Late/Call system, any of the other systems could pay extra beyond the primary measure for late rooms and calls. In contrast to None (straight salary), all four systems increase compensation for faculty when total faculty numbers are decreased, because the same amount of work is accomplished with fewer people.
In contrast to the OR work noted previously, pain-management services and critical care services are difficult to incorporate and equate with OR work. For instance, in the Charges system, if billed charges are used, then all OR care billed with ASA units can be compared. If one faculty member bills twice as much as another faculty member, one can safely assume that the first faculty member billed twice as many ASA units. Even when non-ASA units are included (e.g., line placement), the approximation still can be used. However, the charge structure for pain-management procedures (both evaluation and management and surgical procedures) may not be based on RVUs and may not be easily equated to ASA units. For instance, although one pain-management specialist may bill twice as much as another, one cannot assume that that the first specialist billed twice as many total RVUs or work RVUs, because charges are not well correlated with RVUs. If ASA units are used, then using RVUs becomes more appropriate. In this case, a department must develop a conversion factor to change RVUs to ASA units or vice versa, as was done by two of the surveyed groups (18). In the Time system, pain-management and critical care services are not billed by using time for all pain procedures and most critical services. If these services are to be incorporated, then the department must determine time spent on each procedure billed and credit the faculty member the time, as was done by two of the surveyed groups. This conversion can be based on a departmental review and arbitrary values or can be based on time used by the Centers for Medicare and Medicaid Services to estimate work RVUs (19). In the Shift system, pain-management and critical care services are incorporated by giving credit for the shift-worked value for any clinical work. A department may choose to equalize regular hour shifts independently of facility or specialization or can develop different values for each (as done by one department in the study). The value of individual shifts must be established by each department.
As with values for shifts worked, valuing out-of-hospital specialty call is a challenge facing all departments. The results of the study provide few details about how departments have resolved this issue. Some departments add additional credit to working this call (Table 3). However, some departments do not include this type of call in the incentive plan (especially Time) and may deal with it in another way.
For both academic and private-practice anesthesiology groups, the important factor in designing or evaluating an incentive plan is to determine the goals that the department considers essential to success, including nonclinical goals. Even when two departments choose the same primary measure, the details of each incentive system will differ. Some departments may decide that no financial incentive plan is necessary to succeed in meeting their mission.
The authors thank Juliane M. Tarr in the Department of Anesthesia and Critical Care at the University of Chicago for her work in distributing the electronic survey and managing the responses. The authors also thank Jordan Kicklighter, BA, and Christy Perry in the editorial office of the Department of Anesthesiology at the University of Texas Medical Branch, Galveston, TX, for preparing and editing this manuscript.
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Footnotes |
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Accepted for publication September 16, 2004.
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