Compensation Conundrum

I'm asked from time to time what are the prevailing compensation rates for HPM physicians. The follow-up to that question is often, "what are the most common compensation models?"

The most common compensation model for HPM Practitioners is a guaranteed (straight) salary. Guaranteed base salary is straightforward, thus simple to implement. Its greatest value is in its simplicity. But one of the results of straight salary is that often role confusion emerges, because expectations are not clearly articulated, and often misaligned.

We are beginning to see variable (incentive) pay used more frequently than in the past. Base salary with incentive (or what we refer to as a hybrid model) is becoming more common -- where base salary is set, we've found, is critically important to how meaningful are the incentives. Conventional wisdom suggests that at least 20% of compensation should be at risk for the incentives to alter behavior.

Choosing metrics to be used for incentive pay, however, is a daunting process, and it is why straight salary remains the most common plan today. Yet, choosing metrics is a highly valuable process, and the mere exercise of that process yields substantial benefits. In a compensation plan with incentives, the key stakeholders will sit down and eventually come to an agreement on which metrics are most important, and then quantify those metrics. It is a process we refer to as "valuing physician activity".

Incentive pay is typically based upon a work effort metric (such as RVUs, collected revenue, patient visits/encounters). There are metrics in addition to work effort, although at present their use in HPM compensation plan design is uncommon. I'm familiar with a couple of hospices that require a quality gate be passed through before incentives kick in. I'm familiar with plans in which exceeding certain scores in family satisfaction surveys will trigger a bonus payment. And there are a small but growing number of compensation plans that reward what we refer to as group citizenship -- or activities such as committee participation, or mentorship.

The metrics that are used, in the end, are not as important as the process of valuing physician activity.

Different Paths, But Same Destination

I've learned that there are many paths to a full-time practice in Hospice and Palliative Medicine(HPM).

Two physicians (Drs. Cote and Martin) with thriving hospice and palliative medicine practices are profiled in the most recent issue of HPM Practitioner. Both started in private practice, one in internal medicine and the other in family medicine. One put down roots in his native Rhode Island after completing his residency, started working part-time for the local hospice and gradually increased his role until the hospice position became full-time 21 years later. The other has practiced in diverse hospice settings and moved his family cross-country several times in pursuit of opportunities for career development. But both are doing the work they love in hospice and palliative medicine full-time, seeing patients while building innovative end-of-life care programs.

Evolving Role of the HPM Physician - What Will the Third Generation Look Like?

Most would agree that the role of the Hospice and Palliative Medicine (HPM) MD is evolving – or moving into a second generation. The first generation has been characterized by contractual relationships, usually hourly pay, for a part-time medical director role. That role describes, by the way, the predominant arrangement today. It is giving way to the full-time MD, and to compensation arrangements that are typically 100% guarantee, accompanied by subsidies.

But we are starting to see pushback by program sponsors to continued subsidization – and I would respectfully submit that a physician specialty cannot be sustained when it is dependent upon subsidies. Look no further than geriatrics, if you need an example. There are 5% fewer certified geriatricians (7,345) today than 10 years ago, or, put another way, roughly half the number currently needed, according to estimates by those who have studied this workforce issue. Why is that? Surely not because there is less of a need for geriatric specialists. Geriatric services are no longer subsidized by hospitals at the rate, and amount, that they were just a decade ago, and a result compensation has not risen to levels that make the field attractive.

What will be the next (third) generation role of HPM physicians? And, how will those physicians be paid? I would watch closely to what Medicare Advantage plans are doing when it comes to reimbursement. Think bundled payments, or global capitation. What other likely scenarios do you see?

Accountable Palliative Care Organizations (APCOs)

Recently I was asked by a client to describe the role of Accountable Palliative Care Organizations (APCOs) in creating exemplar practices around "late-life" care within a community (see here for a previous post describing exemplar communities). The client is situated near a shopping mall that had been struggling until it recently brought in a major department store - a topic which had been a subject of an earlier conversation that day. An APCO, I replied, is like an "anchor tenant" of the palliative care community, setting norms to encourage the free-flow of ideas and collaboration, producing enduringly successful communities.

Within these APCOs, physicians , hospices, hospitals, and long-term care facilities adopt measures to blunt harmful financial incentives, thus taking collective responsibility for improving care for those with advanced illnesses (what I'm terming late-life care). Much has been written and commented of late about the role of financial incentives in the health care system, and what provisions in the health care reform bill could bring about better outcomes while containing costs.

I'm curious to learn your thoughts and experiences, as we explore this subject in greater depth in future posts.

Palliative Care Grand Rounds - April MMX

A grand welcome to the April edition of Palliative Care Grand Rounds (PCGR), a monthly (first Wednesday) summary, or mash-up, of thought-provoking, timely, relevant, humane, and exceptionally well-written postings from the blogosphere. For a look back at year-to-date PCGRs, see here, here, and here. Now, onward.

With the landmark health reform bill commanding news throughout the past month, I’ll focus on blog posts relating to palliative care that any of us might have overlooked. First, a summary of how health reform may impact hospice via Larry Beresford’s post .

A higher than usual volume of current blog postings concern futile care. To wit, the Happy Hospitalist writes in his Unfiltered Hospital Medicine Blog about a recent case that highlights for him, just as for many who posted comments, the ethical issues surrounding futile care. So is this particular case an extreme example? Or is it more common than you or I realize? Decide for yourself.

Meanwhile, a neurologist with the blogger moniker of Dr. Grumpy writes about another example of futile care that’s sure to give pause to each reader.

Then there’s Joanne Kenen, a veteran journalist who logged more than a decade covering health policy on Capitol Hill. As Senior Writer in the Health Policy Program at the New America Foundation, Ms. Kenen’s blog focuses on the intersection between health policy and health politics. Read here for her reaction to an essay “Shock Me, Tube Me, Line Me” penned by an
Emergency Medicine specialist in the esteemed journal Health Affairs. Its author, Boris Veysman, an ER doc at a New Jersey academic medical center, describes caring for a terminally ill woman suffering from metastatic cancer. Her wish—to have a low-tech death, free of tubes and machines—both countered and confirmed his to have “everything” done to prolong life when his time comes. A provocative read.

Larry Beresford, host of last month’s PCGR, posted recently about the discussion circulating more widely these days on declining enrollment at hospices. A decline in hospice referrals, Larry posits, may correlate to what the economists refer to as a necessary market correction.

The critical nexus of death and religion often fascinates Ann Neumann. In her blog Otherspoon, she weighs in with a thoughtful piece on the role that three institutions (church, state, and health care industry) play in the national structure of late-life care.
Concurrently, her post grapples with the racial disparities prevalent in hospice enrollment.

I’m indebted to Christian Sinclair for facilitating my role as Grand Rounds host in his post . It nicely crystallizes several blog posts that have deservedly garnered much attention and discussion.

Dr. Michael Kirsch asks in his blog “Are Feeding Tubes Futile Care or Morally Obligatory?” See where you stand.

A family medicine physician who writes a blog, Musings of a Dinosaur, posted last month that “Palliative Care is an Unnecessary Specialty”. Well, as you’d expect, this view generated considerable discussion throughout the blogosphere. Some came from Buckeye Surgeon, who comments occasionally about palliative care, posting these comments.

On Geripal, Alex Smith writes about how his “What is palliative care?” response has evolved. Today, he starts by saying, "Palliative care is about matching treatment to patient goals." Hard to argue with that.

Are you curious how physicians choose to practice in hospice and palliative medicine? In the first edition of Pallimed’s new feature, Origins, Pam Harris, who recently passed her Physical Medicine and Rehabilitation boards and is HPM-certified, details what drew her to the HPM specialty.

Suzana Makowski joined Pallimed last month as a blogger, posting about emergency room use by patients with cancer approaching end of life. Dr. Makowski adds her suggestions to those of the study’s author on how ER visits could be reduced. One notion: establishing “palliative care medical homes” that provide palliative care seamlessly across healthcare settings.


Risa’s Pieces has been a blog whose posts have been regularly featured in PCGR. In this post,
Risa writes about her new roles in and out of end-of-life care.

Over at the blog Death Club for Cuties, look for a new feature titled Memorial Monday.
Blogger Jerry Soucy visits a site called Find a Grave, searches through its database to find the people who died on the particular date of a given Monday, and then selects an entry that has some relevance to palliative care, or that otherwise resonates with him personally.

Next month’s host is Thaddeus Pope, at his blog http://medicalfutility.blogspot.com/. Lots of March posts on the subject of yes, medical futility. Among these posts you'll find many video links, one of them of a short film nominated for Best Animated Short Film at the 2010 Academy Awards. I think you'll find it worth eight minutes of your time. And while on the subject of the connection between the arts and death and dying, have a look at Pallimed's Arts and Humanities blog and postings by Drs. Christian, Clarkson, and Wollesen.


Of course, your comments are, as usual, invited.

Minimum Volume Thresholds - Do They Apply to Late-Life Care?

The Volume-Outcome Relationship

Over the past 30 years, there has been considerable research on the relationship between surgical volume and outcomes for a variety of complex procedures. The proposed cause of the relationship is intuitively simple: practice makes perfect. Surgeons who perform high volumes of, for example, coronary artery bypass surgeries (CABG) per year are expected to have improved outcomes over surgeons who perform low volumes.



The finding that higher procedure volumes by facility and by surgeon are associated with improved outcomes has led to the development of minimum procedure requirements. These initiatives promote patient care by surgeons and facilities who meet certain volume thresholds. Guidelines published by the American Heart Association/American College of Cardiology specify the minimum number of procedures performed annually by cardiac surgeons.

Perhaps the most influential initiative has been the selective purchasing strategy of the Leapfrog Group (www.leapfroggroup.org), a large coalition of public and private purchasers of about $60 billion of health insurance annually. Members include many Fortune 500 companies such as Chrysler, Cisco Systems, Inc., IBM and Verizon. The Leapfrog Group’s mission is to trigger giant leaps forward in the safety, quality, and affordability of health care by "supporting informed healthcare decisions by those who use and pay for health care and promoting high-value health care through incentives and rewards."



As part of its “Evidence-Based Hospital Referral” guidelines, the Leapfrog Group recommends that its members contract for selected surgeries, including CABG, only with hospitals that meet minimum volume thresholds.


In line with Leapfrog’s initiatives are state regulatory policies towards the regionalization of healthcare. These projects aim to concentrate certain medical services in facilities throughout the state. The most widely adopted approach towards regionalization is state-based certificate-of need-programs. Think Florida and hospice. The goal is to distribute certain specialized procedures and services rationally and efficiently across the state.

Initially devised to restrain increasing healthcare costs, these programs have led towards concentration of specific procedures to high volume facilities. New York State is considered by many students of this issue to be a model for the successful regionalization of healthcare. One study by Hannan et al. titled “Improving outcomes of coronary artery bypass surgery in New York” showed that increasing the number of CABG procedures performed at high volume hospitals decreased the risk-adjusted mortality rates by 41 percent. Another study demonstrated the positive effect of certificate-of-need programs on percutaneous coronary intervention outcomes across a number of states. The authors showed that in states with certificate-of-need programs, Medicare patients with acute myocardial infarction were less likely to undergo revascularization procedures than patients in states without certificate-of-need programs.

So, do minimum volume thresholds have a role in improving late-life care, or put another way, is the spread of a health service innovation, like palliative care , accelerated or slowed as a result of organizational concentration? The NHPCO FY2008 National Summary of Hospice Care shows that 40% of hospices care for fewer than 25 patients per day, and that 80% of hospices care for fewer than 100 patients per day. Perhaps more to the point, almost half of this nation's hospices ADMIT less than 150 patients per YEAR (or fewer than three every week). The obvious question is, are Florida's hospices delivering better late-life care because of their volume of patients. Hard to say, because there are few agreed-upon measures of the quality of late-life care. Yet, what is widely acknowledged is that Florida's hospices make more expansive use of Hospice and Palliative Medicine (HPM) physicians. That must count for something in spreading the influence of hospice and palliative care, don't you think?