The COVID-19 pandemic has impacted innumerable aspects of healthcare and healthcare delivery in the United States, and could potentially change the way we approach future engagement with physician leaders. As we continue to plan for our industry’s “new normal,” it is important that we consider a couple of important factors—the role of physician leaders and the associated compensation.
Now is a perfect opportunity to review your organization’s current physician leadership agreements, and, in light of the pandemic, consider such questions as:
- Should compensation be adjusted for physician leaders?
- Should special considerations be given to physician leaders in specific, more essential specialties?
- Are our physician leadership duties and responsibilities clearly defined in our agreements?
- Should duties and responsibilities be updated to include expectations during public health emergencies (PHE) or other widely impactful public health crises?
Additionally, there are other, more difficult issues to be addressed as well. For example:
- Physician leadership contracts often include a cap on the annual hours and/or total annual compensation. In the wake of a pandemic, and a PHE never before considered, it is prudent to ask the question: should this methodology be reviewed to provide for flexibility in times of extraordinary need? While this may be an “across the board” type of review, additional consideration should be given to the flexibility needed within certain essential specialties to ensure adequate resources are available.
- Some physician leaders also may have been asked to serve in alternative roles as part of an organization’s crisis management plan and COVID-19 response. Do current agreements contemplate this potential, or are those circumstances covered by the waivers issued as part of the PHE?
- Hospitals experiencing a significant financial strain due to the COVID-19 pandemic may consider suspending or terminating other non-essential physician leadership positions. Hospitals should consider whether it is possible, on at least a temporary basis, to combine and consolidate leadership responsibilities as a cost-savings measure.
Careful evaluation on a case-by-case basis is necessary to ensure organizations document their responses to the PHE, these questions, and any challenges, appropriately. Organizations must also contemplate future extraordinary circumstances, amending and supplementing agreements as necessary to provide for future flexibility. To the extent needed, PYA has benchmarks and resources to help you determine appropriate structural elements and compensation for such physicians.
As the country begins to look beyond the PHE, organizations have begun planning for a new, uncertain future, which may necessitate new and/or additional physician leaders and leadership roles. As part of your organization’s planning process, PYA recommends performing an overall physician leadership needs assessment to evaluate existing inventory and emerging needs, ensuring all positions are not duplicative in the services provided, are compensated within fair market value, and are commercially reasonable.
While the COVID-19 pandemic has been a stressful and ambiguous time for many healthcare providers, this time also affords an opportunity to identify organizational gaps. Reviewing physician leadership contracts can offer clarity and stability to ensure your organization’s continued success.
If you would like additional COVID-19 guidance, visit PYA’s COVID-19 hub. If you would like more information about physician leadership structures, contracts, or compensation, or for assistance with any matter involving valuation, strategic planning, transaction experience, or compliance, contact one of our PYA executives below at (800) 270-9629.
