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Ask the expert: What is the formula for a hybrid bonus plan for hospitalist programs?

Hospitalist Leadership Connection, December 14, 2010

Hybrid bonus plans for hospitalist programs are becoming more popular. Under a hybrid bonus plan, a hospitalist has the opportunity to build a bonus pool through one of the productivity measures. However, some or all of that bonus money is at risk if the hospitalist fails to attain certain quality goals. For example, consider a bonus plan in which the physician builds a bonus pool through a per-admission bonus of $35 per admission. However, for each quality measure not met, the physician forfeits a percentage of that bonus pool.

Here’s an example:
Base salary = $190,000
Bonus pool = $35 for each admission with 600 annual admissions projected
Bonus quality qualifiers:
1.    90% referring physician satisfaction = 15% of the bonus pool at risk
2.    90% core measures for community-acquired pneumonia (CAP) = 10% of the bonus pool at risk
3.    90% core measures for heart failure = 10% of the bonus pool at risk
4.    Minimum 80% attendance on at least two committees = 10% of the bonus pool at risk

In the example hybrid bonus plan, if a physician admits 162 patients in the first quarter, he or she would generate a quarterly bonus pool of $5,670. During this quarter, he or she met all of the bonus qualifiers except for CAP core measures, which disqualified the physician for 10% of the bonus pool. This physician’s first quarter would be $5,103, putting him or her on pace for a total annual bonus of $20,412, bringing the total salary and bonus to $210,412.

There is no one-size-fits-all formula when it comes to bonus compensation. Each program should consider the unique characteristics of the hospital. Perhaps the most critical thing to remember when designing a bonus plan is to remain mindful of the desired goals. Then, make sure the bonus motivates the behavior required to attain those goals.

The above excerpt is adapted from Practical Guide to Hospitalist Recruitment and Retention, by Kirk Mathews, MBA, and John Nelson, MD, FACP, FHM, published by HCPro, Inc.

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