Structure and Compensation: The Genetic Defect in Medical Groups


It’s one thing to understand that playing to self-interest motivates. Harnessing that self-interest advances the business’ own interests.

It’s altogether something else to create a medical group that operates as a collective or in a club-like structure. In that situation, the group members generally put their own interests ahead of the group’s interests. That all but guaranties that the group will be unable, in the long run, to survive.

That’s because every decision in, for example, a 65 partner group operated as a club, is run through 65 individual filters of “what’s best for me?” and no, or at best only a very little and inconsequential, filter of “what’s best for the group?”

How can the group successfully build up cash reserves? How can it determine to expand to other sites that may not be as profitable if it will impact the individual’s take home pay although it will strengthen the group’s overall competitiveness?

The solution to these issues lies not only in the design of the group’s governance structure, it lies in the make up of the group’s compensation plan.

If all you’re rewarding for is individual performance and not for group goals, you’re all but telling your partners and your non-owner physicians (and, in fact, all of your staff rewarded in that fashion) not to care about the group’s success or the group’s future, only their own: They’ll listen to you.

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