Roadmap for Physician Compensation in a Value-based World.

HEALTH CARE REIMBURSEMENT IS RAPIDLY evolving from primarily fee-for-service to value-based, risksharing accountable care contracts. Health systems with employed physicians primarily paid on productivity-based compensation plans face the challenge of aligning their physicians’ financial incentives with the new market requirements for quality, outcomes and patient experience. Health systems will need to migrate their employed physicians and owned practices as soon as possible to compensation plans that support the “Triple Aim” of improved population health, better patient engagement and lower per capita costs. Productivity will continue to be a factor in the near term since the transition to risk-sharing contracts will be gradual, but there is no question that value-based contracts are the preferred business models of the future. It will prove difficult to impossible for health systems whose employed physicians are still compensated primarily on the old fee-for-service paradigm to successfully participate in these types of arrangements unless their employed physician compensation model is significantly realigned. In addition, a failure to align compensation incentives with the goals of reform may increase the risk of penalties for overutilization of acute care or diagnostic services that may be encouraged by the old volume-based practice mindset. This is especially important for employed primary care physicians. These physicians will play the most critical role in the clinically integrated networks as primary team leaders to manage the transition to accountable care and population health management. SALARIED EMPLOYMENT TO PRODUCTIVITY — The wave of physician employment in the early 1990s failed in large part due to guaranteed compensation models coupled with a lack of expertise in physician practice management. Direct