Pay for performance MGOA Physicians (A) (B) (C) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Pay for performance MGOA Physicians (A) (B) (C) Case Solution

CASE OVERVIEW

This case is about pay for performance for surgeons at a premier teaching and research hospital. The system was inefficient due to which the surgeons were compensated with flat salaries based on the profitability. However, the new pay system was implemented under which financial performance was linked with pay. At one hand, this system leads to improvement in quality, but prove to be difficult to manage at the other hand. Furthermore, after implementing the plan, the management noticed significant rise in the groups’ productivity. The new plan enabled the surgeons to perform more surgeries. Despite of the improved productivity, some doctors were concerned about the research work, which was essential for their careers as they felt that the new plan decreased their research work. Moreover, Dr. Rubash hired several new doctors and implemented a policy that the new doctors will not receive bonuses until the expense to hire them is recovered.

After some time, the management noticed positive results from the new compensation plan, which were improved compensation of physicians, productivity incentives, and rewarding physicians. The physicians perceived that the plan contributed in building positive relationships with fellow doctors. In addition, Dr. Rubash implemented another pay plan in order to manage things better in the group by establishing an executive committee to discuss the group’s financial condition and things related to development of research laboratories. The plan intended to pay doctors who worked with uninsured patients.

Furthermore, in 2005 a new program was initiated to reward the academics activities and to raise the pay for physicians. In addition, this retained some of the amount to fund the departmental activities. A new building was build to manage the growing staff of MGOA. New physicians were also hired in to order to accomplish the plan of opening satellite offices in Boston. Moreover, academic enrichment fund was created in order to facilitate physicians and private practitioners.

PROBLEM STATEMENT

The first problem that has been identified is associated with concerns of doctors that the new compensation plan would decrease or stop their research work. In addition, would restrict them from making more money. Moreover, the productivity plan resulted in the departure of doctors and created a complex situation for MGOA’s management to retain its doctors. Doctors started private practice to make the more money. The retention of doctors became difficult. Furthermore, the transparency of the compensation plan was a major concern for many doctors, as they believed that they were not paid equally despite of the efforts they were putting. In addition, the management of MGOA decided to hold back 50% of the revenues that were generated by doctors in order to cover their expenses and facilitate the department. This frustrated many doctors, as despite of working hard; they weren’t compensated fairly.

ANALYSIS

The compensation plan was designed in a way that was beneficial for some doctors and hindered benefits for other doctors. The compensation was helpful in improving productivity but it created a negative perception in the mind of doctors, their research was affected, since they focused towards increasing their productivity despite the fact that their research work was an important aspect in making their career successful. The compensation required either focus on making money or on the research related work, which in turn wouldn’t resulted in the decrease in incentives/pay. In order to continue, the doctors were required to pay more time, which affected their routine and personal life. This caused dissatisfaction among doctors. On the other hand, the heavy load of clinical activities caused many doctors to limit their research work..................

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