We conducted interviews with senior executives at 10 leading health systems to better understand how organizations use performance-based compensation. Of the organizations interviewed, five pay physicians using productivity-independent salaries, and five use productivity-adjusted salaries. Performance-based pay is more prevalent in primary care than in subspecialties, and the most consistently identified performance domains are quality, service, productivity, and citizenship. Most organizations have less than 10% of total compensation at risk, with payments distributed across three to five domains, each containing several metrics. Approaches with many metrics--and little at-risk compensation for each metric-may offer weak incentive to achieve any particular goal.
Keywords: Incentives; Performance-based compensation; Productivity; Provider organization; Quality improvement; Value-based healthcare delivery.
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