Manage Your Practice

What Herman Cain Knows About the Defect in Medical Group Compensation Plans

May 6, 2019

Herman Cain withdrew his name from consideration for a Fed seat because he couldn’t afford (or didn’t want) to work for the relatively low pay.

So, how can you expect one of your partners to devote time to running your medical group, if you won’t compensate him or her for it?

After all, you get what you pay for.

If you try to get it without paying for it, you won’t get much of it, at least not of high quality.

And you are probably stealing. The irony is that you are stealing from yourself, from your future.

Medical Group Compensation Plans

What does your medical group’s compensation plan compensate for? The usual answer is “productivity,” whether measured in units or minutes or by some other standard.

If your group compensates for X, you will get more of X. So if X is units, your group’s physicians will be motivated to maximize their production of units.

But if your group compensates for X and also wants Y, you will get a lot of X and not very much, if any, Y.

For many medical groups, Y is leadership. They want their group leaders to lead, but their compensation plans incentivize only the production of units.

Is it any surprise that the “leadership stuff” is relegated to the wee hours of the night or even to the wee hours of never? Is it any surprise that there’s no actual leadership, only “consensus?” Is it any surprise that the leaders schedule business meetings at 7 pm or on weekends, signaling amateur status?

If you don’t pay for leadership, you won’t get much, if any, of it. You will create tension. You will create resentment. But you will not create leadership.

You’ll be stealing from the leaders – either from their ability to generate units or from their time for themselves or with their families.

And, as a result you will get a very weak form of leadership, one that results in your group stealing from its own future in the form of poor decisions and lost opportunities.

You’ve got great plans to take over the region or to simply protect your position at one facility. You expect your leaders to achieve that goal. Yet you’ve incentivized them away from your goal. Don’t blame them when you never get there. Blame yourself.

It’s time to make sure that your group’s compensation plan is in synch with your group’s business strategy and future.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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