De-Coding Components of Faculty Compensation January 29, 2015

.

Kyle L. Sharp, MHA, FACHE Interim Associate VP and Executive Director, OSU Faculty Group Practice Chief Operating Officer, OSU Faculty Group Practice Associate Executive Director, Specialty Care Network

2 Elements of Faculty Compensation

Agenda

Examples FGP Benchmarks

3

Elements of Academic Medical Center Faculty Compensation

Academic • Administrative • Consulting • Research • Teaching Clinical • Administrative • Clinical Contract • Teaching Your individual allocation toward these initiatives is driven from time assignment

4

FGP Benchmarks Used

Association of American Medical Colleges • Salary benchmarks for clinical departments segregated by academic rank University Health Consortium Faculty Practice Solution Center • Productivity benchmarks (wRVU’s) by specialty/sub specialty • Organizational Expectation – 75 th Percentile

5

Current Standard Measurement of Production: Work Relative Value Unit

Time • Pre-Service • Intra-Service • Face-to-Face Time (Evaluation and Management • Cut-to-Close Time (Surgical) • Post-Surgical Intensity • Physical Effort and Skill • Mental Effort and Judgment • Stress and Risk

6

Why wRVU’s are Used as the Driver of Compensation

 Medicare uses the RVU fees paid for the work – resources needed to complete the work as the driver to determine the  Since payors reimburse the Faculty Group Practice based on the Medicare framework, it is used on the foundation to measure physician clinical productivity

7

Academic Salary Funding Sources

     Clinical Teaching Subsidy Graduate Medical Education Support  National Institutes of Health and Other Research Awards o Private Foundation Grants, American Cancer Society, March of Dimes, United Way, etc.

Development Funds – Endowments, Specific Use, General Strategic Reserves Clinical Subsidy

8

Clinical Salary

  Patient care revenue from faculty members’ clinical work Contract revenue for clinical services (internal and external)  Each CPT code billed has associated wRVU value assigned by Medicare (CMS)  Dollar collected is not a dollar earned   Billing fees Dean’s tax   Direct expenses Overhead  Benefits  University benefit cost approximately double of community benefit rate

9

Compensation Example Dr. Fixer-Up

Clinical FTE Academic FTE

Total FTE 1.0

80% 20%

Proposed Salary $100,000

$80,000 Provider wRVU’s $20,000 Departmental Funds

$100,000 Dr. Take-Care-Of-You

Clinical FTE • Billable 20% • Contract 20% • Admin 20% Academic FTE • Research 20% • Academic/Teaching 20%

Total FTE 1.0

60% 40%

Proposed Salary $100,000

$60,000 Funding Source • wRVU’s • External Contract • Medical Directorship $40,000

$100,000