a case study - AAARAD

FACULTY COMPENSATION
IN AN ACADEMIC
RADIOLOGY DEPARTMENT:
A CASE STUDY
Margaret Birrenkott, MBA
University of Wisconsin Medical School
Madison, Wisconsin

RESULTS OF
COMPENSATION SURVEY
‣ 28 respondents
‣ 75% have formalized comp plans
• 57% use RVUs as a component of the comp
plan; 43% have no formal clinical
productivity measures.
• 43% measure academic productivity as a
basis for distributing incentive; 57% have no
formal academic productivity measures.
‣ 25% allocate comp based on chair
discretion
AAARRO Meeting,
September 13, 2003

DEFINITION OF TERMS
‣“INCENTIVE” = productivity-based
measure of work for which radiologist is
compensated.
‣“BONUS” = Additional salary paid out to
radiologists based on revenue in excess of
expenses (including ‘regular’ comp)
‣“COMPENSATION” = Salary paid out
exclusive of fringe benefits but including
retirement.
AAARRO Meeting,
September 13, 2003

COMPENSATION FUNDING
SOURCES
‣ Clinical Revenues 87%
‣ Hospital (GME) 5%
‣ Medical School (MAMA) 6%
‣ Research Grants 2%
AAARRO Meeting,
September 13, 2003

UW RADIOLOGY
COMPENSATION PLAN
‣ COMPONENTS:
• Clinical
• 10% pool for call pay (‘Call Merit’)
• 70% equally shared with some disparity for rank
and years of service in dept (‘Clinical Base’)
• 10% based on total RVUs (‘Clinical Incentive’)
AAARRO Meeting,
September 13, 2003

UW RADIOLOGY
COMPENSATION PLAN
‣ COMPONENTS:
• Academic
• University base salary allocated for research and
teaching activities
• 10% from clinical revenues awarded based on a
point system (academic RVUs) ) for academic
activities (‘Academic Incentive’)
AAARRO Meeting,
September 13, 2003

HOW IS $$ ALLOCATED?
‣ CALL MERIT
• Distributed first before other pools allocated
• Provided only to IVR and community sections
• Allocation based on frequency and intensity
of call
AAARRO Meeting,
September 13, 2003

HOW IS $$ ALLOCATED?
‣ CLINICAL BASE
• Largest pool distributed equally regardless of
rank, track or productivity
• +$5,000 increase for every rank greater than
Assistant Professor
• +$1,000 for every year of service at UW
Radiology
Example: Associate Professor w/10 yr UW exp:
$150,000 + $5,000 + $10,000 = $165,000
AAARRO Meeting,
September 13, 2003

HOW IS $$ ALLOCATED?
‣ CLINICAL INCENTIVE
• Take faculty RVUs for previous 12 months
clinical work
• Dollars distributed via a 1:1 ratio (every RVU
awarded = $$$)
• Plain film (including dx mammo) ) adjustment
of 1.35
AAARRO Meeting,
September 13, 2003

HOW IS $$ ALLOCATED?
‣ CLINICAL INCENTIVE EXAMPLE:
• $1,000,000 in pool/385,000 total dept clinical
RVUs = $2.60 per RVU
• Radiologist generated 10,000 RVUs (including
plain film adjustment)
• Clinical incentive = $2.60 x 10,000 = $26,000
AAARRO Meeting,
September 13, 2003

AAARRO Meeting,
September 13, 2003
HOW IS $$ ALLOCATED?
‣ ACADEMIC
• UW base salary from medical school
allocation of funds for grantsmanship,
teaching, academic administration
• Academic incentive allocated based on
internal ‘RVUs‘
RVUs’
• Administrative work for dept, UW, hosp, UWMF
• Presentations/publications
• Funded grants/grant applications
• Teaching awards

HOW IS $$ ALLOCATED?
‣ ACADEMIC INCENTIVE EXAMPLE
• MD completes Faculty Assessment Form to self
report academic production
• FAFs reviewed and scored by dept committee
• Points totaled and MD placed in ‘tier’
• 1-250
$9,500
• 251-500
500 $12,500
• 501-750
$15,500
• Etc.
• Size of merit per tier determined by amount of $$ in
pool
• Everyone participates
AAARRO Meeting,
September 13, 2003

HOW IS $$ ALLOCATED?
‣ TOTAL SALARY IS SUM OF:
• Call Merit (if appropriate)
• Clinical Base
Subject to
• Clinical Incentive
5% withhold
• Academic Incentive
• Academic Base
• Bonus if revenues allow; distributed evenly
• Withhold returned at year-end end if revenues
allow
AAARRO Meeting,
September 13, 2003

MANAGEMENT OF PLAN
‣ Chair has small discretionary fund to
‘tweak’ salaries as needed
‣ Department Finance Committee meets
regularly and reviews budgetary and
staffing needs to ‘right-size’ sections
‣ Grieve through Dept Finance Committee;
if unresolved, appeal to chair and
ultimately to practice plan Comp
Development Committee
AAARRO Meeting,
September 13, 2003

MANAGEMENT OF PLAN
‣ Educate, educate, educate!
• Town hall meetings prior to plan
implementation
• Section meetings to explain changes
• Present simulations to show impact
• Presentation of plan components at faculty
meetings
• Chair/administrator one-on
on-one one meetings
with faculty
AAARRO Meeting,
September 13, 2003

CHALLENGES AND
LESSONS LEARNED
‣ Equalizing plain film RVUs vs. CT/MRI
and IVR. Fairest method??
‣ Switched to a 1:1 ratio vs. using internal
dept target for ‘simpler’ clinical incentive.
‣ How should academic productivity be
valued? Who determines academic RVUs?
‣ Reward intensity and frequency of call.
‣ Give sections flexibility to allow
redistribution among section members.
AAARRO Meeting,
September 13, 2003