FACULTY COMPENSATION IN AN ACADEMIC RADIOLOGY DEPARTMENT: A CASE STUDY

FACULTY COMPENSATIONFACULTY COMPENSATIONIN AN ACADEMIC IN AN ACADEMIC

RADIOLOGY DEPARTMENT:RADIOLOGY DEPARTMENT:A CASE STUDYA CASE STUDY

Margaret Birrenkott, MBAMargaret Birrenkott, MBAUniversity of Wisconsin Medical School University of Wisconsin Medical School

Madison, WisconsinMadison, Wisconsin

AAARRO Meeting, AAARRO Meeting, September 13, 2003September 13, 2003

RESULTS OF RESULTS OF COMPENSATION SURVEYCOMPENSATION SURVEY

28 respondents28 respondents 75% have formalized comp plans75% have formalized comp plans

57% use RVUs as a component of the comp 57% use RVUs as a component of the comp plan; 43% have no formal clinical plan; 43% have no formal clinical productivity measures.productivity measures.

43% measure academic productivity as a 43% measure academic productivity as a basis for distributing incentive; 57% have no basis for distributing incentive; 57% have no formal academic productivity measures.formal academic productivity measures.

25% allocate comp based on chair 25% allocate comp based on chair discretiondiscretion


DEFINITION OF TERMSDEFINITION OF TERMS

““INCENTIVE” = productivity-based INCENTIVE” = productivity-based measure of work for which radiologist is measure of work for which radiologist is compensated.compensated.

““BONUS” = Additional salary paid out to BONUS” = Additional salary paid out to radiologists based on revenue in excess of radiologists based on revenue in excess of expenses (including ‘regular’ comp)expenses (including ‘regular’ comp)

““COMPENSATION” = Salary paid out COMPENSATION” = Salary paid out exclusive of fringe benefits but including exclusive of fringe benefits but including retirement.retirement.


COMPENSATION FUNDING COMPENSATION FUNDING SOURCESSOURCES

Clinical RevenuesClinical Revenues 87%87% Hospital (GME)Hospital (GME) 5% 5% Medical School (MAMA)Medical School (MAMA) 6% 6% Research GrantsResearch Grants 2% 2%


UW RADIOLOGY UW RADIOLOGY COMPENSATION PLANCOMPENSATION PLAN

COMPONENTS:COMPONENTS: ClinicalClinical

• 10% pool for call pay (‘Call Merit’)10% pool for call pay (‘Call Merit’)• 70% equally shared with some disparity for rank 70% equally shared with some disparity for rank

and years of service in dept (‘Clinical Base’)and years of service in dept (‘Clinical Base’)• 10% based on total RVUs (‘Clinical Incentive’)10% based on total RVUs (‘Clinical Incentive’)


UW RADIOLOGY UW RADIOLOGY COMPENSATION PLANCOMPENSATION PLAN

COMPONENTS:COMPONENTS: AcademicAcademic

• University base salary allocated for research and University base salary allocated for research and teaching activitiesteaching activities

• 10% from clinical revenues awarded based on a 10% from clinical revenues awarded based on a point system (academic RVUs) for academic point system (academic RVUs) for academic activities (‘Academic Incentive’)activities (‘Academic Incentive’)


HOW IS $$ ALLOCATED?HOW IS $$ ALLOCATED?

CALL MERITCALL MERIT Distributed first before other pools allocatedDistributed first before other pools allocated Provided only to IVR and community sectionsProvided only to IVR and community sections Allocation based on frequency and intensity Allocation based on frequency and intensity

of callof call



CLINICAL BASECLINICAL BASE Largest pool distributed equally regardless of Largest pool distributed equally regardless of

rank, track or productivity rank, track or productivity +$5,000 increase for every rank greater than +$5,000 increase for every rank greater than

Assistant ProfessorAssistant Professor +$1,000 for every year of service at UW +$1,000 for every year of service at UW

RadiologyRadiologyExample: Associate Professor w/10 yr UW exp:Example: Associate Professor w/10 yr UW exp:$150,000 + $5,000 + $10,000 = $165,000$150,000 + $5,000 + $10,000 = $165,000



CLINICAL INCENTIVECLINICAL INCENTIVE Take faculty RVUs for previous 12 months Take faculty RVUs for previous 12 months

clinical workclinical work Dollars distributed via a 1:1 ratio (every RVU Dollars distributed via a 1:1 ratio (every RVU

awarded = $$$)awarded = $$$) Plain film (including dx mammo) adjustment Plain film (including dx mammo) adjustment

of 1.35of 1.35



CLINICAL INCENTIVE EXAMPLE:CLINICAL INCENTIVE EXAMPLE: $1,000,000 in pool/385,000 total dept clinical $1,000,000 in pool/385,000 total dept clinical

RVUs = $2.60 per RVURVUs = $2.60 per RVU Radiologist generated 10,000 RVUs (including Radiologist generated 10,000 RVUs (including

plain film adjustment)plain film adjustment) Clinical incentive = $2.60 x 10,000 = $26,000Clinical incentive = $2.60 x 10,000 = $26,000



ACADEMICACADEMIC UW base salary from medical school UW base salary from medical school

allocation of funds for grantsmanship, allocation of funds for grantsmanship, teaching, academic administrationteaching, academic administration

Academic incentive allocated based on Academic incentive allocated based on internal ‘RVUs’internal ‘RVUs’• Administrative work for dept, UW, hosp, UWMFAdministrative work for dept, UW, hosp, UWMF• Presentations/publicationsPresentations/publications• Funded grants/grant applicationsFunded grants/grant applications• Teaching awardsTeaching awards


HOW IS $$ ALLOCATED?HOW IS $$ ALLOCATED? ACADEMIC INCENTIVE EXAMPLEACADEMIC INCENTIVE EXAMPLE

MD completes Faculty Assessment Form to self MD completes Faculty Assessment Form to self report academic productionreport academic production

FAFs reviewed and scored by dept committeeFAFs reviewed and scored by dept committee Points totaled and MD placed in ‘tier’Points totaled and MD placed in ‘tier’

• 1-2501-250 $9,500 $9,500 • 251-500251-500 $12,500 $12,500 • 501-750501-750 $15,500 $15,500 • Etc. Etc.

Size of merit per tier determined by amount of $$ in Size of merit per tier determined by amount of $$ in poolpool

Everyone participatesEveryone participates



TOTAL SALARY IS SUM OF:TOTAL SALARY IS SUM OF: Call Merit (if appropriate)Call Merit (if appropriate) Clinical BaseClinical Base Subject to Subject to Clinical IncentiveClinical Incentive 5% withhold 5% withhold Academic IncentiveAcademic Incentive Academic BaseAcademic Base Bonus if revenues allow; distributed evenlyBonus if revenues allow; distributed evenly Withhold returned at year-end if revenues Withhold returned at year-end if revenues

allowallow


MANAGEMENT OF PLANMANAGEMENT OF PLAN

Chair has small discretionary fund to Chair has small discretionary fund to ‘tweak’ salaries as needed‘tweak’ salaries as needed

Department Finance Committee meets Department Finance Committee meets regularly and reviews budgetary and regularly and reviews budgetary and staffing needs to ‘right-size’ sectionsstaffing needs to ‘right-size’ sections

Grieve through Dept Finance Committee; Grieve through Dept Finance Committee; if unresolved, appeal to chair and if unresolved, appeal to chair and ultimately to practice plan Comp ultimately to practice plan Comp Development CommitteeDevelopment Committee


MANAGEMENT OF PLANMANAGEMENT OF PLAN

Educate, educate, educate!Educate, educate, educate! Town hall meetings prior to plan Town hall meetings prior to plan

implementationimplementation Section meetings to explain changesSection meetings to explain changes Present simulations to show impactPresent simulations to show impact Presentation of plan components at faculty Presentation of plan components at faculty

meetingsmeetings Chair/administrator one-on-one meetings Chair/administrator one-on-one meetings

with facultywith faculty


CHALLENGES AND CHALLENGES AND LESSONS LEARNEDLESSONS LEARNED

Equalizing plain film RVUs vs. CT/MRI Equalizing plain film RVUs vs. CT/MRI and IVR. Fairest method??and IVR. Fairest method??

Switched to a 1:1 ratio vs. using internal Switched to a 1:1 ratio vs. using internal dept target for ‘simpler’ clinical incentive.dept target for ‘simpler’ clinical incentive.

How should academic productivity be How should academic productivity be valued? Who determines academic RVUs?valued? Who determines academic RVUs?

Reward intensity and frequency of call.Reward intensity and frequency of call. Give sections flexibility to allow Give sections flexibility to allow

redistribution among section members.redistribution among section members.

Documents

FACULTY COMPENSATION IN AN ACADEMIC RADIOLOGY DEPARTMENT: A CASE STUDY