physician/APC pay cuts

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Topic Author
Dmanse02
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physician/APC pay cuts

Post by Dmanse02 »

I am employed at a medium-size healthcare organization, which has recently asked for physicians/APCs to take voluntary pay cuts to improve financials within the organization. The system's production has been limited given non-emergent services are cancelled. With telehealth options now available in our clinic (primary care), our production and hours are nearing baseline. We may even be more efficient currently as ~50% of ancillary staff have been furloughed. I have discussed this with my colleagues in the office, but realize this only offers a one-sided perspective. Ideas that have been voiced:

1) benefit of being employed - we did not take business/private practice risk and relinquished benefits of ownership.
2) similarly, we do not reap the rewards when organization rakes in profits - no stock/ownership and no options to do so.
3) one of few service lines still making at least some money for the hospital system.
4) specialties with high percentage elective procedures (i.e. plastic surgery) seem more reasonable to take pay cut.
5) would rather make a donation for the tax benefits.
6) unsure if employer would provide extra financial support to us if we individually fell on hard times, although thought unlikely.
7) many of us have actually put in longer, uncompensated hours on committees to adjust hospital system's policies and procedures for the pandemic.
8) consideration for taking risk (still seeing sick patients in clinic, including possible coronavirus cases). Admins are mostly working from home.
9) hospital system will receive funding through CARES act (confirmed through previous email correspondence); none of us will.
10) pay is mostly production based. we will likely forfeit any quality/production bonuses with year-end reviews. possibly even owe some monies.
11) truly feel hospital is unlikely to close its doors either through government support or buyout. system has wide catchment area without other options locally
12) monies will not go towards helping other hospital staff, at least not directly.

On the flip side, the executives reported taking 15-20% pay cut each, they have been good to work with, and it seems to be the "right" thing to do. However, that brings me to my last point that I believe is widely felt among healthcare providers:

13) Is this another example of executives/healthcare admins taking advantage of good-natured healthcare providers?

I am fishing for other ideas, opinions, perspectives. On this site, I imagine there are many other physicians/APCs in similar situations as well as healthcare executive/admins that could share their thoughts. What would you do? Is there a happy medium or less straightforward solution that could benefit all parties?
Last edited by Dmanse02 on Thu Apr 23, 2020 8:23 am, edited 1 time in total.
NxNW
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Re: physician/APC pay cuts

Post by NxNW »

Do not take a voluntary pay cut.
decapod10
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Re: physician/APC pay cuts

Post by decapod10 »

I mean, what happens if you say no?
mega317
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Re: physician/APC pay cuts

Post by mega317 »

13) Yes

I can tell you they don't give a darn about anything you typed. Especially laughable are #1, #6, and #8 in terms of things that matter in real life but won't in your situation. This is the problem with being employed, you don't reap the rewards like you said, but also you do still take some of the risk. Not judging, I am an employed physician as well. Be careful with #7, if you bring that up they might get a good idea for bigger cuts for those who didn't participate in those committees. I am seeing something kind of like that.
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david
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Re: physician/APC pay cuts

Post by david »

NxNW wrote: Wed Apr 22, 2020 10:23 pm Do not take a voluntary pay cut.
This.
HawkeyeJD
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Re: physician/APC pay cuts

Post by HawkeyeJD »

From a legal perspective, and knowing nothing about your structure, the idea of voluntary cuts always strikes me as suspicious.

If the company is in danger it should say so to partners and institute appropriate measures to deal with the risk. This is literally why you have a corporate structure!

If the company is not in danger and profits are just depressed, why take a pay cut to prop up others profits?


Bottom line, treat the scenario with suspicion and caution. Understand the why, which should help make your decision. If you don’t agree with the “why” then don’t do it.
mega317
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Re: physician/APC pay cuts

Post by mega317 »

OP is not a partner and should not (and sounds like does not) expect to be fully informed about what's really going on. OP is like a bagger at a grocery store to these people. Again, not judging I am in the same shoes.
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HawkeyeJD
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Re: physician/APC pay cuts

Post by HawkeyeJD »

mega317 wrote: Thu Apr 23, 2020 12:46 am OP is not a partner and should not (and sounds like does not) expect to be fully informed about what's really going on. OP is like a bagger at a grocery store to these people. Again, not judging I am in the same shoes.
OP says “I have discussed this with my partners” which is what led me to assume OP is a partner of some sort.

Certainly my thought might be different if non partner.
mega317
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Re: physician/APC pay cuts

Post by mega317 »

I presume partners meant the other primary care docs. I could be wrong about that but then the post doesn't make much sense.
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Vaporvalley
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Re: physician/APC pay cuts

Post by Vaporvalley »

You already took a voluntary pay cut by becoming an employed primary care physician. Administrators are willing to cut their own pay because they know their positions could be eliminated completely without much trouble. You are the indispensable ones. Administration has to show they are doing their due diligence by seeking these voluntary salary cuts. Stay calm, stop feeling guilty, and carry on.
BionicBillWalsh
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Re: physician/APC pay cuts

Post by BionicBillWalsh »

The climate for many health care organizations is verging on Armageddon but you are ultimately the talent. Hospitals and "medium sized healthcare organization(s)" don't treat patients. Doctors do.

Make those administrators and middle management earn their money. They are in place to deal with crisis such as these. I know some physician groups that have had to cut their pay by 40% for the time being. A 15-20% cut for admin is laughable. I won't go into my personal feelings on their monetary worth. But I suspect there are other costs within the organization that can be absolutely reduced but keep the physicians whole.

A unilateral reduction in pay if you have a signed contract may constitute a breach. Especially if you're on a production system where you're already going to take a hit. Its not your fault that their "consultants" they hired to structure your contract didn't envision this. But the organization is lucky to have doctors working for them.

Stay safe.
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Katietsu
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Re: physician/APC pay cuts

Post by Katietsu »

You seem to be one of the last physicians who should take the voluntary pay cut. You are already in a specialty that is underpaid relative to your colleagues. You are showing up and working everyday. You are at higher risk of Covid-19 exposure than many of your colleagues. Your production pay will already be affected.

I would not be expecting a pay cut from you. Now, I would have a different opinion of the orthopedic surgeon who is getting paid 3 times as much and currently spending most of his time gardening.
kmurp
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Re: physician/APC pay cuts

Post by kmurp »

If the hospital doesn’t survive this, you will be unemployed. My hospital has cash to make it through most of June before insolvency. The CARES act funding for the hospital will be 4-5 million on a budget of 330 million. Not much.
My private practice is projecting a 15-20% hit in compensation for the calendar year if we reopen in late may and don’t have to close again. That would equate to maybe 25th percentile MGMA levels.
So yes, I would consider the cut. Money doesn’t grow on trees for any of us.
Derpalator
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Re: physician/APC pay cuts

Post by Derpalator »

david wrote: Thu Apr 23, 2020 12:30 am
NxNW wrote: Wed Apr 22, 2020 10:23 pm Do not take a voluntary pay cut.
This.
This. Yes. As an employed physician myself, I am UNDER CONTRACT for my services. If my employer asks for pay cuts, and they have, I point out that the CONTRACT states the nature of my pay. In my own case, I let them know I was ready to walk away if they broach my contract. They have agreed to shelve the matter until May 6th, and if they are still asking for pay cuts they now understand that NEGOTIATIONS are necessary. And yeah, I do all of that committee stuff ad nauseam too.

Bodgleheads have made it possible for me to walk away and for that I am truly thankful.
tyrnup13
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Re: physician/APC pay cuts

Post by tyrnup13 »

I am in private practice, and my group has a contract with a large hospital system where nearly everyone else is employed. My group will take about a 20% pay decrease this year, if things return to near normal in June. We also have years where we make much more than our baseline pay because we are business owners and we reap the rewards.

As an employed physician, there is no way I would accept a pay cut, unless I thought the organization was truly at risk (only for job preservation). My employed physician friends haven't received pay increases in recent years, when profits have been huge. The systems need to absorb the blow when times are tough and they can reap the benefits when times are better.

You became employed to reduce risk, for situations exactly like this.
BruinBones
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Re: physician/APC pay cuts

Post by BruinBones »

Derpalator wrote: Thu Apr 23, 2020 4:37 am
david wrote: Thu Apr 23, 2020 12:30 am
NxNW wrote: Wed Apr 22, 2020 10:23 pm Do not take a voluntary pay cut.
This.
This. Yes. As an employed physician myself, I am UNDER CONTRACT for my services. If my employer asks for pay cuts, and they have, I point out that the CONTRACT states the nature of my pay. In my own case, I let them know I was ready to walk away if they broach my contract. They have agreed to shelve the matter until May 6th, and if they are still asking for pay cuts they now understand that NEGOTIATIONS are necessary. And yeah, I do all of that committee stuff ad nauseam too.

Bodgleheads have made it possible for me to walk away and for that I am truly thankful.
+1.
I have been an employed physician for several years. Any change in base pay is a change to the contract (that both sides signed) and would have to be re-negotiated to enact.
DownToThis
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Re: physician/APC pay cuts

Post by DownToThis »

BruinBones wrote: Thu Apr 23, 2020 7:13 am
Derpalator wrote: Thu Apr 23, 2020 4:37 am
david wrote: Thu Apr 23, 2020 12:30 am
NxNW wrote: Wed Apr 22, 2020 10:23 pm Do not take a voluntary pay cut.
This.
This. Yes. As an employed physician myself, I am UNDER CONTRACT for my services. If my employer asks for pay cuts, and they have, I point out that the CONTRACT states the nature of my pay. In my own case, I let them know I was ready to walk away if they broach my contract. They have agreed to shelve the matter until May 6th, and if they are still asking for pay cuts they now understand that NEGOTIATIONS are necessary. And yeah, I do all of that committee stuff ad nauseam too.

Bodgleheads have made it possible for me to walk away and for that I am truly thankful.
+1.
I have been an employed physician for several years. Any change in base pay is a change to the contract (that both sides signed) and would have to be re-negotiated to enact.
These are great perspectives. I'm also an employed physician and have not had the conversation of pay cuts yet but anticipate it at some point coming up. Was not certain how I would respond but this is helpful

Still working right now but at reduced volumes.
jumppilot
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Re: physician/APC pay cuts

Post by jumppilot »

Not a physician but an airline pilot.

Don’t lose sight of the fact that you have a certification that isn’t easily replaceable. They can’t “plug and play” a doctor or an airline pilot. As another poster said, you are the talent.

Don’t ever take a voluntary pay cut. It’s a managers job to manage. Let them figure it out. When times are good management doesn’t hand out pay raises for “a job well done.” No, they enrich themselves and shareholders.

You take a pay cut, they’re just going to lay you off anyways.

Full pay to the last day.
potatopancake
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Re: physician/APC pay cuts

Post by potatopancake »

Hard pass on the voluntary pay cut. Have they ever offered a voluntary pay increase after an exceptional year? The hospital will never make any money if they lose their physicians.
zonacat
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Re: physician/APC pay cuts

Post by zonacat »

No to voluntary pay cut. I am in hospital administration. Non productive providers should be taking the cut and many are with incentive based compensation being a large part of comp plans.

Numbers are really bad. We will be lucky as an industry to have CARES act replace a $1-$2 for every $3 in losses. Going to be an ugly year where many healthcare systems will be triggering debt covenants for debt service coverage ratio

To forecast out might be forced pay cuts during next round of provider contract negotiation if the bond covenants get triggered and consultants are brought in to cut costs
Topic Author
Dmanse02
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Re: physician/APC pay cuts

Post by Dmanse02 »

HawkeyeJD wrote: Thu Apr 23, 2020 12:50 am
mega317 wrote: Thu Apr 23, 2020 12:46 am OP is not a partner and should not (and sounds like does not) expect to be fully informed about what's really going on. OP is like a bagger at a grocery store to these people. Again, not judging I am in the same shoes.
OP says “I have discussed this with my partners” which is what led me to assume OP is a partner of some sort.

Certainly my thought might be different if non partner.
I should have used the term "colleagues" given the implication of using the word "partner." We (myself included) do not have ownership of any kind within the healthcare system.
jeam3131
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Re: physician/APC pay cuts

Post by jeam3131 »

What did your organization do with the HHS stimulus money? They should have received one month of average Medicare payment based on 2019 numbers. This should be used to alleviate their losses
mega317
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Re: physician/APC pay cuts

Post by mega317 »

I'm not sure of the right thing to do, probably no like most are saying. I agree with the sentiment that OP is the talent and all the "shoulds" but they don't matter. I strongly disagree with the idea that OP is not very easily replaceable. Unless the pay is already well below market or an undesirable place to live. Most employed physicians could be replaced in a week, and there's a wave of new grads around the corner coming into a world of hiring freezes.
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gasdoc
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Re: physician/APC pay cuts

Post by gasdoc »

I just want to post an article I just read that gives some perspective:

https://www.medscape.com/viewarticle/92 ... 6259&faf=1

gasdoc
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pennsylvania211
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Re: physician/APC pay cuts

Post by pennsylvania211 »

If you want to know their motive, ask to be compensated the difference in equity.

If they agree to offer equity, then take it as you'll have share in profits when times are good again.

If they refuse to offer equity, then gently remind them that you will not be socializing their losses during the bad times so that they can keep the profits to themselves during the good times.
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WWJBDo
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Re: physician/APC pay cuts

Post by WWJBDo »

I'm told our hospital has agreed to give something like 35% of the CARES act money to be distributed among the physicians to help reduce the pay cuts we have already taken. You should get a similar promise - in writing, meaning you need someone who is negotiating this for your collective.

I would certainly argue that if your section are working and generating significant revenue (and you should be, since telehealth is now paid) then you need a much smaller cut than average. I'm not in primary care. We have a lot of forced days off, and reduced income. If our primary care colleagues were working full time and generating income, I would not expect them to subsidize our specialty.
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calvin+hobbes
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Re: physician/APC pay cuts

Post by calvin+hobbes »

Contracts are contacts, sure. They have an agreed upon salary. They also generally have 30-90 termination clauses that could be put in to effect if the employed physician doesn’t “play ball.”

Practices are taking a hit, private, public and non profit. If you were fairly compensated for efforts in the past, taking a pay cut to help keep businesses solvent and prevent staff furloughs and layoffs is not the end of the world. Especially if others (admin, colleagues, etc.) are doing their part.

If you were not compensated fairly in the past, then you should have moved on before this and should plan to going forward.
Flashes1
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Re: physician/APC pay cuts

Post by Flashes1 »

I'm married to a physician and have a corporate banking background so I see both sides:

* Money doesn't grow on trees. If a hospital is losing money and "burning" cash they have major financial problems.
* My experience with my wife & her colleagues is they are very smart with medical issues, but they have a very limited knowledge about how business works. Doctors have lived in a safe bubble forever - some doctors around me when faced with a pay cut went to the local TV station complaining about the "mistreatment." These are docs whose practices were shut down - they literally were sitting at home.
* I said "welcome to the real world."
* We in the private sector have suffered mass layoffs and pay reductions for decades.
* But yes, administrative staff has become bloated; not just in medicine, but higher education, too. But I digress.
KSActuary
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Re: physician/APC pay cuts

Post by KSActuary »

Wow, ask you to take a 20% pay cut and then Medicare gives them a 20% bump in Covid-19 reimbursement. What's not to like. Expect Covid-19 cases to skyrocket.
ENT Doc
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Re: physician/APC pay cuts

Post by ENT Doc »

Do NOT take a pay cut. You already have for the security of income during down times. Hospitals have and will continue to receive billions in stimulus money and have been overpaid for years. You have a contract. Bolster your negotiating position if needed via unionization, seeking alternative employment, or otherwise.
anil686
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Re: physician/APC pay cuts

Post by anil686 »

No for a voluntary pay cut. Not the right thing to do. You are an employed physician - not in private practice. If executives take a pay cut - that is on them. JMO though being a private practice physician....
anil686
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Re: physician/APC pay cuts

Post by anil686 »

Flashes1 wrote: Thu Apr 23, 2020 12:20 pm I'm married to a physician and have a corporate banking background so I see both sides:

* Money doesn't grow on trees. If a hospital is losing money and "burning" cash they have major financial problems.
* My experience with my wife & her colleagues is they are very smart with medical issues, but they have a very limited knowledge about how business works. Doctors have lived in a safe bubble forever - some doctors around me when faced with a pay cut went to the local TV station complaining about the "mistreatment." These are docs whose practices were shut down - they literally were sitting at home.
* I said "welcome to the real world."
* We in the private sector have suffered mass layoffs and pay reductions for decades.
* But yes, administrative staff has become bloated; not just in medicine, but higher education, too. But I digress.
Most employed physicians in hospital systems have no voice in the running or operations of the bloated hospital system that is struggling. There are also a number of well run practices (I would like to think mine is) who are doing fine even with the 50% drop in hospital and clinic revenue. We planned for a rainy day and have a small enough staff and little waste so we are - so far knock on wood - doing fine. Point is, for private practices - they make decisions directly related to viability - in employed hospital systems - physicians do not make those decisions...
Sconie
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Re: physician/APC pay cuts

Post by Sconie »

Just wondering-----it was not clear to me-------are you employed by a profit or a non-profit hospital system?
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Jack FFR1846
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Re: physician/APC pay cuts

Post by Jack FFR1846 »

pennsylvania211 wrote: Thu Apr 23, 2020 10:08 am If you want to know their motive, ask to be compensated the difference in equity.

If they agree to offer equity, then take it as you'll have share in profits when times are good again.

If they refuse to offer equity, then gently remind them that you will not be socializing their losses during the bad times so that they can keep the profits to themselves during the good times.
This is what my company (not medical) did. 10% pay cut but upcoming RSUs will increase to make it up. Of course, there's a vesting schedule but all in all pretty balanced. To me, this shows that the company is in current jam but believes in its future.
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Alan S.
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Re: physician/APC pay cuts

Post by Alan S. »

For decades we have been told that preventive medicine and dental is critical. Now it's all being shut down, much of it unnecessarily.

We will eventually find out the consequences of all this deferred treatment. Maybe they won't be so bad and we will have learned something. Or maybe they will be bad, and we will have learned the opposite.

The elective surgery ban is breaking hospitals in this state, and that ban ends on 5/1 out of brutal financial necessity. Several hospitals have only a couple Covid cases and have otherwise ground to a halt. This makes no sense except in certain locations such as NYC.
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gasdoc
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Re: physician/APC pay cuts

Post by gasdoc »

I would say "no" if you have a choice. In my situation, I too have a contract, but because I am considered high risk for Covid-19, I have told my "bosses" I am not comfortable going up to the Covid-19 unit to place endotracheal tubes and lines. As soon as we became overstaffed by one anesthesiologist, I was furloughed since I could not "do the whole job." I didn't feel like I could really fight it since I was not comfortable doing the high risk part of my job. If I didn't have that issue, and they tried to change my contract, I would at least negotiate from a position of strength. The employers don't give raises arbitrarily when profits are better.

gasdoc
potatopancake
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Re: physician/APC pay cuts

Post by potatopancake »

Sconie wrote: Thu Apr 23, 2020 12:40 pm Just wondering-----it was not clear to me-------are you employed by a profit or a non-profit hospital system?
There is little difference between profit and non-profit hospitals, minus the tax-filing implications.
hmw
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Re: physician/APC pay cuts

Post by hmw »

Derpalator wrote: Thu Apr 23, 2020 4:37 am
david wrote: Thu Apr 23, 2020 12:30 am
NxNW wrote: Wed Apr 22, 2020 10:23 pm Do not take a voluntary pay cut.
This.
This. Yes. As an employed physician myself, I am UNDER CONTRACT for my services. If my employer asks for pay cuts, and they have, I point out that the CONTRACT states the nature of my pay. In my own case, I let them know I was ready to walk away if they broach my contract. They have agreed to shelve the matter until May 6th, and if they are still asking for pay cuts they now understand that NEGOTIATIONS are necessary. And yeah, I do all of that committee stuff ad nauseam too.

Bodgleheads have made it possible for me to walk away and for that I am truly thankful.
Are you close to retirement? Being a BH, I am sure that you are not living paycheck to paycheck and can afford to not have a paycheck for a long time. But realistically it will be difficult for you get much earned income in the near future if you are fired. Not a good time to start a private practice yourself and I suspect that most hospitals and pp are not hiring right now.
hmw
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Re: physician/APC pay cuts

Post by hmw »

KSActuary wrote: Thu Apr 23, 2020 12:24 pm Wow, ask you to take a 20% pay cut and then Medicare gives them a 20% bump in Covid-19 reimbursement. What's not to like. Expect Covid-19 cases to skyrocket.
The financial strain on the hospitals is real. The revue generated by treating the Covid 19 patients is a drop in the bucket compared to the cancelled/postponed elective cases.
KSActuary
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Re: physician/APC pay cuts

Post by KSActuary »

That may be very true but one can see what may happen and that would corrupt data for a lot reasons.
sasquatch12
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Re: physician/APC pay cuts

Post by sasquatch12 »

Most other industries are taking pay cuts that they have no say in, so why shouldn't Physicians also take pay cuts? As long as the admins and executives in your organization are taking the same cuts.
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gasman
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Re: physician/APC pay cuts

Post by gasman »

sasquatch12 wrote: Thu Apr 23, 2020 3:12 pm Most other industries are taking pay cuts that they have no say in, so why shouldn't Physicians also take pay cuts? As long as the admins and executives in your organization are taking the same cuts.
Many of us are contracted employees and our contracted pay is based on availability, not productivity. Thus, in some cases we have rights that other employees do not.
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1210sda
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Re: physician/APC pay cuts

Post by 1210sda »

Very interesting discussion. I will certainly have more sympathy for my PCP.
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ram
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Re: physician/APC pay cuts

Post by ram »

I think there are 2 things to consider:
1. Profit.
2. Cash flow.

You said you are mostly production based. Lets assume that you are 100% production based.

Lets say that your 2020 salary is based on 2019 production.
2021 salary is based on 2020 production.
Lets further assume that during the first 2 months of this year production was 100% of baseline and it was low during Mar and April. But it went up to 110 to 120 % of baseline during May to December such that for the whole year of 2020 the production was 100 % of baseline.

In the above case there is no need for your salary to be cut.

However there is a cash flow problem. The organization has not generated revenue in March and April to pay the promised salaries.(and perhaps do not have the reserves that they should have had). If that is the case I would be agreeable to "defer" 15-20% of the current salary to a time that revenues improve.

I know one hospitalist who has done extra shifts and in normal course would have been paid out for those at the end of the 1st quarter. (early April). Her employer has said they will pay the usual salary now but will pay for the extra shifts "at a later date".

Most healthcare organizations have both a profit problem and a cash flow problem and the latter is the bigger problem right now.

Some production salaries are paid on a 12 month rolling production. April 2020 salary is based on production of 04.01.2019 to 3.31.2020 (divided by 12). For such a situation the salary is already going down due to low March 2020 production. The cash flow problem is somewhat attenuated in this circumstance.

Some organizations put "X' dollars in the 457 F plan of an employed physician each year, but 1.5X or 2X dollars in the year that the balance sheet is good/excellent (i.e. they share). These organizations are asking physicians to take a salary cut during lean times.
Last edited by ram on Thu Apr 23, 2020 3:40 pm, edited 1 time in total.
Ram
theappleman
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Re: physician/APC pay cuts

Post by theappleman »

It is funny to me that in this whole discussion regarding healthcare pay dynamics, there is not one mention of insurance providers. In normal times, they are the driving force of fee schedule/reimbursement, yet at times when the system is clearly strained (one could argue from years of their reduction in reimbursement), they are getting a free pass as though they are not part of the system. Why are the hospitals not asking insurers to step up? Until healthcare providers/hospital systems have more equitable partnerships with third party reimbursement providers, doctors will be the ones taking the risks and taking the financial hit. Completely antithetical to the idea of greater risk, greater reward, yet we allow it. Completely unfair. Sorry, a mini rant that doesn't help the OP
ENT Doc
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Re: physician/APC pay cuts

Post by ENT Doc »

theappleman wrote: Thu Apr 23, 2020 3:34 pm It is funny to me that in this whole discussion regarding healthcare pay dynamics, there is not one mention of insurance providers. In normal times, they are the driving force of fee schedule/reimbursement, yet at times when the system is clearly strained (one could argue from years of their reduction in reimbursement), they are getting a free pass as though they are not part of the system. Why are the hospitals not asking insurers to step up? Until healthcare providers/hospital systems have more equitable partnerships with third party reimbursement providers, doctors will be the ones taking the risks and taking the financial hit. Completely antithetical to the idea of greater risk, greater reward, yet we allow it. Completely unfair. Sorry, a mini rant that doesn't help the OP
Agree with the overall sentiment. Best way for providers of care to provide value to patients is to assume more risk and self insure. They then compete on premiums and quality metrics. Systems can and have transitioned for this Kaiser-like model.
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goodenyou
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Re: physician/APC pay cuts

Post by goodenyou »

What is in your contract? Does the hospital have a 60 or 90 day no-cause termination provision? If they are unlikely to terminate, I wouldn’t take a pay cut. We have a few employed physicians in a single-specialty surgical practice that volunteered to take a pay cut like the partners did. They realize that there is little to no money coming through the door, and they would likely be terminated without the cut. If I was employed by a hospital, I wouldn’t take a cut. My employed colleagues that are employed by the hospital system haven’t taken a cut. Neither have government workers, especially Congresspeople.
ThreeFundPlay
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Re: physician/APC pay cuts

Post by ThreeFundPlay »

Dmanse02 wrote: Wed Apr 22, 2020 10:19 pm I am employed at a medium-size healthcare organization, which has recently asked for physicians/APCs to take voluntary pay cuts to improve financials within the organization. The system's production has been limited given non-emergent services are cancelled. With telehealth options now available in our clinic (primary care), our production and hours are nearing baseline. We may even be more efficient currently as ~50% of ancillary staff have been furloughed. I have discussed this with my colleagues in the office, but realize this only offers a one-sided perspective. Ideas that have been voiced:

1) benefit of being employed - we did not take business/private practice risk and relinquished benefits of ownership.
2) similarly, we do not reap the rewards when organization rakes in profits - no stock/ownership and no options to do so.
3) one of few service lines still making at least some money for the hospital system.
4) specialties with high percentage elective procedures (i.e. plastic surgery) seem more reasonable to take pay cut.
5) would rather make a donation for the tax benefits.
6) unsure if employer would provide extra financial support to us if we individually fell on hard times, although thought unlikely.
7) many of us have actually put in longer, uncompensated hours on committees to adjust hospital system's policies and procedures for the pandemic.
8) consideration for taking risk (still seeing sick patients in clinic, including possible coronavirus cases). Admins are mostly working from home.
9) hospital system will receive funding through CARES act (confirmed through previous email correspondence); none of us will.
10) pay is mostly production based. we will likely forfeit any quality/production bonuses with year-end reviews. possibly even owe some monies.
11) truly feel hospital is unlikely to close its doors either through government support or buyout. system has wide catchment area without other options locally
12) monies will not go towards helping other hospital staff, at least not directly.

On the flip side, the executives reported taking 15-20% pay cut each, they have been good to work with, and it seems to be the "right" thing to do. However, that brings me to my last point that I believe is widely felt among healthcare providers:

13) Is this another example of executives/healthcare admins taking advantage of good-natured healthcare providers?

I am fishing for other ideas, opinions, perspectives. On this site, I imagine there are many other physicians/APCs in similar situations as well as healthcare executive/admins that could share their thoughts. What would you do? Is there a happy medium or less straightforward solution that could benefit all parties?
I haven’t been asked to take a pay cut yet but had already been trying to figure out what my response would be if asked to do so. In our system, employed physicians whose volumes have declined (anesthesiologists, surgeons with high load of elective cases) have taken pay cuts voluntarily. But as a frontline provider during this pandemic, who’s seen no changes to my volumes, and increased stress and risk to myself and family, I’ve come to the conclusion that I think I would say no. I think you’ve outlined a lot of the thoughts I had and I definitely think there’s an element of taking care of our good nature as well. I think my basic reasoning for me is that I’m doing the job that I’m contracted for fully, and if anything, going above and beyond given the pandemic. A pay cut would be a slap in the face, and basically a sign that the system doesn’t value me and it would be time to move on. My 2 cents on my situation, but maybe has some applicability to yours.

In your case, given the production component and possibility of having to repay monies at the end of the fiscal year, would it make sense to take a pay cut to correspond with this? That way you’re still being a team player and avoiding paying back at the end of the year.
decapod10
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Re: physician/APC pay cuts

Post by decapod10 »

ENT Doc wrote: Thu Apr 23, 2020 3:41 pm
theappleman wrote: Thu Apr 23, 2020 3:34 pm It is funny to me that in this whole discussion regarding healthcare pay dynamics, there is not one mention of insurance providers. In normal times, they are the driving force of fee schedule/reimbursement, yet at times when the system is clearly strained (one could argue from years of their reduction in reimbursement), they are getting a free pass as though they are not part of the system. Why are the hospitals not asking insurers to step up? Until healthcare providers/hospital systems have more equitable partnerships with third party reimbursement providers, doctors will be the ones taking the risks and taking the financial hit. Completely antithetical to the idea of greater risk, greater reward, yet we allow it. Completely unfair. Sorry, a mini rant that doesn't help the OP
Agree with the overall sentiment. Best way for providers of care to provide value to patients is to assume more risk and self insure. They then compete on premiums and quality metrics. Systems can and have transitioned for this Kaiser-like model.
It's hard to say for sure, but it doesn't sound like OP is in a Kaiser-type model. Kaiser docs are basically one gigantic physician group. They are all partners/shareholders in the group (you actually buy in, like other physicians usually buy in to their group). The group negotiates with the insurance company and the hospital, which are 2 separate entities (so 3 different entities), but the insurance company and the hospital is not technically the doctors' employer.

OP's employment situation sounds a bit different I think, though can't say for sure. Though I still wonder what the consequences are if they refuse to take a pay cut.
Xrayman69
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Re: physician/APC pay cuts

Post by Xrayman69 »

Not enough information.

You are an employed physician, do you have a “contract” that is renewed annually? Most employees is most business’ don’t have a “contract” they have a job description that states what they are required to perform and how they are compensated. Does your “contract” have a productivity metric and thus if not achieved affects compensation and in turn if over achieves baseline metrics then incentive bonus payments.

When determining that employed status decreased your risk vs partnership or private practice owner it would appear that the risk was just different as opposed to decrease.

Do the other “employees” such as desk staff, nurses, transporters, respiratory therapists environmental service engineers .... have “contracts” that also would require “voluntary” decrease in compensation? I suspect not but rather that they are having hours cut or furloughed to match volume and service needs with the first put out being non full time or temporary float staff.

What is the size of your organization and the risk or potential of bankruptcy? Hospitals will receive some federal assistance but “practice groups” and medical schools will not receive any funds and thus are at risk for bankruptcy because most financial flow is a result of clinical production. The vast majority of practice groups are essentially like service business’ when closed no money and thus no means to pay staff (including physicians).

What does your “contract” state ? This is what you should follow.
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