Eyeworld

EW NEWS & OPINION July 2016 27 by John Pinto and Corinne Wohl, MHSA, COE pro-rata to their ownership and a majority of profits are shared pro-rata to each partner's personal collections. 2. Some practices concentrate on expense sharing rather than profit sharing. Under this alternative approach, X% of overhead (often indexed in some manner to the fixed overhead—rent, marketing, computer systems, core man- agement staffing, etc.) is shared equally among the providers, and Y% of overhead (related to the variable overhead for supplies, support staff, etc.) is shared pro-ra- ta to personal collections, charges, patient visits, or some other measure of personal production. Depending on the percentages applied, this approach tends to be favorable to higher-production partners and less favorable—even punishing—to lower producers. 3. A number of practices take a pure "eat what you kill" approach, where 100% of overhead (or prof- it) is shared pro-rata to personal No perfect comp model has ever been developed; doctors who need "perfect" fairness should be in solo practice. Like a happy friendship or marriage, you have to be able to say, liberally, "I can live with that." Here are a few common approaches: 1. The largest percentage of oph- thalmic practices today use some variation on the following: a mi- nority of profits are shared equally among the partner providers I f 2 doctor-partners in a practice are using the same resources and generating the same rev- enue, then any compensation model is fair. In all other cases, the feelings and the mathematical facts can quickly get complicated. Because conditions change, your compensation model should be examined formally every year or 2 for continued fairness. Has your time come? Is our partner compensation model due for a revision? production. This can be great for some practices, poor in other settings; high patient volume pro- viders and high revenue doctors (e.g., retina) working with lower producers sometimes complain that they are unfairly covering the overhead, and that this model provides a disincentive for high producers. 4. A very small number of egalitar- ian, "socialist" practices (most often found in the shadow of Harvard) take an equal split ap- proach where all profits are divid- ed equally irrespective of financial productivity. It is often reasonable to con- sider a compensation premium for high-producing members of the practice. And it is sometimes reasonable to consider a subsidy or "kink" in the compensation rules for low-producing members of the practice. This is directly related to the philosophy and values of the owner-doctors, requiring signifi- cant group practice openness and discussion. A very small number of prac- tices located in markets with a historically high penetration of managed care use some variation on an RVU-based system. Although this is common in larger multi-specialty groups, as a matter of principle, we shy away from this approach be- cause of the perception among most providers that how much a doctor gets paid should be related to how much money he collects (i.e., how much VALUE he generates), not how many "work units" he accrues. A rare approach is to reward doctors in a combined fashion, partly for revenue productivity, and partly for actual clinical time spent in the practice, irrespective of production. While few ambitious doctors would be comfortable with their partners being paid for "just showing up," this approach can work in a harmonious environment, where everyone is feeling somewhat more socialistic. " He that is of the opinion money will do everything may well be suspected of doing everything for money. " –Benjamin Franklin To the point: Simple practice tune-ups for complex times continued on page 28

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