Performance Pay for MGOA Physicians (A)
Introduction:
Massachusetts General Orthopedic Associates (MGOA) is the department of Massachusetts General Hospital (MGH) and teaching center headquartered in the United States. The hospital was founded in 1811 and was the third hospital that has been built in the U.S. Furthermore, MGOA was the first one that has introduced orthopedic service in the country. Dr. Joel founded the hospital in 1899, and Dr. Joel was known to be a pioneer in the field of orthopedics. The department is full of success stories in terms of offering exceptional clinical services along with making contributions to medical teaching and research. In fact, the first discovery of herniated disc was done by a doctor at MGH. In addition to this, the literature for annals of orthopedic was full with the names of doctors of MGH, who have made major contributions in medical research and discoveries. The status and self-esteem earned by the doctors of MGH were well deserved.
Issues identification:
The basic issue faced by the hospital was related to the fiscal deficits of the organization as it was not on the positive side for many consecutive years. In addition to that, their projections were also negative and led to no security in terms of financial aspects. The executive board level team has made an attempt to implement a new plan that was based on pay for performance, but still the plan was a failure as the board was failed to align it with the financial needs of the department. The basic need of the department was to continue doing excellent research and having outclass physicians.
Dr. Herndon along with Dr. Rubash need to make a quick action plan to solve the issue and overcome the financial deficits that have been faced by MGOA. Along with this, the management need to make an appropriate compensation plan to reward the physicians and doctors based on the time they spent in doing various researches and surgeries.
From the importance and urgency viewpoint, the management of the department needs to do something on an immediate basis to increase the overall cash flows of the department. The department of the hospital will not be able to take any decisions if the cash flows of the department are not positive. If the cash flows are not positive, all other matters related to surgeries will not matter.
Analysis:
The MGOA is a group of physicians that was connected with MGH hospital. Despite the fact that the contributions made by the department was flawless, the department faced several issues related to financial deficits that put the department’s future at risk. Dr. Herndon and Dr. Rubash had been hired to solve the issue due to their good reputation because the management believed that both the doctors can turn the whole scenario around.
The problems faced by the department were started by the decrease in insurer payments by government and private sectors as well. In addition to this, the salary structure of the department was also flawed because the salary system was so basic and flat. The only factor that counts in the salary structure was the tenure and seniority. The department was not giving any incentives based on the efficiency and productivity of doctors.
Along with this, the salaries of most of the doctors are time and again amplified to some extent by grants, that does not make any input to the department’s bottom line. The amount given in terms of grants often ranges between $80,000 to $100,000 and it was based on the time that was expected by the doctors and physicians to be spending about 40 hours of research in a week. In actuality, most of the doctors worked for the research Dept more than 40 hours and thus the grants were not able to cover their costs and salaries.
The department was not-for-profit organization and thus the basic goal of it was achieving monetary benefits.However, because of the high financial debt, the management was forced to think in other way around to bring financial stability in MGOA. The basic idea behind pay for performance was to make doctors accountable for the contribution they have made in terms of money and profits to MGOA. The pay for performance plan initiated by Dr. Rubash was as follows. The basic salary of every physician was put in place at the start of a six-month-time period. The revenue generated by the physician has been placed in the fund with a percentage of five. The bonus will be given to the doctors and physicians on a semi-annual basis. The criteria for the bonus system will be 50% of the profits that will be generated by the physicians and doctors. Along with this, each and every doctor needs to do his share in the costs that are related to office.................
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