Learn how Withum worked with a large community hospital to implement a comprehensive tool to ensure an appropriate provider compensation structure.
Executive Summary
Withum was engaged by the CFO of a regional not-for-profit community hospital (the “System”) to provide insight into the compensation and performance of all physicians and advanced practice providers (“APPs”) across the System. Withum’s work efforts focused on determining the fair market value compensation levels for the physicians and APPs of each specialty and developing a compensation plan to further the System’s ability to recruit and retain new physicians.
The Client
A large not-for-profit community hospital located on the East Coast with satellite locations in surrounding counties.
The Challenge
While the System had historically been successful in recruiting and retaining providers across many specialties, the success of those efforts was not consistent across the board. For some specialties, the System was paying its physicians and APPs below market rates. For others, the System struggled to understand and support the higher compensation levels necessary to recruit and retain providers. This created a growing concern that the benchmarks and methodologies used to assess provider compensation inaccurate, resulting in compensation structures above fair market value for some specialties (a compliance issue) and well below fair market value in other specialties (a recruitment and retention issue).
The Approach and Solution
Withum conducted a high-level review of the System’s compensation models and historical compensation arrangements. The team also considered local recruitment factors and conducted interviews with service line leaders to determine improved benchmarks to ensure competitive recruitment offers and fair market value compliance. Withum prepared a comprehensive set of guidelines that, alongside ongoing advisory, is now enabling the System to consistently determine the most appropriate compensation structures for its physicians and APPs, as well as precisely evaluate provider performance.
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