Rethinking Production Based Compensation Plans

Sep 2006   Print PDF

By Thomas A. Lerner | Related Practice: Health Care

This article originally appeared in the King County Medical Society Bulletin.

Negotiations regarding compensation are one of the primary reasons that physicians consult lawyers for non-medically related matters involving their practices. The issue arises in the context of hiring or association, the merger or separation of practices or simply when a member of a group practice seeks a change. Because the common compensation structure is set up to define one's economic worth, and by extension, value to the practice, the negotiations carry with them an inherent tension, even when the goals of all involved are substantially the same.

The default compensation system tends to be a production based plan. The premise of this article is to encourage consideration of a simpler and less formulaic approach that may add cohesion to a group practice, relieve administrative burdens and contribute towards a less stressful and more satisfying work experience. The dynamics of each group will be different, of course, but the discussion may be worth having.

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