By Wendy Abdo, Staff Writer for Pinnacle Health Group
From a business perspective, the best way to enhance and/or sustain a competitive advantage is through your personnel, and the biggest income generator is, of course, your physician pool. By investing in this key resource, you will build core competencies and affect a solid competitive advantage as an organization. One of the tools that will help you build these core competencies is compensation surveys.
Compensation surveys are much more than mere benchmarks. They are useful in many ways. They help price jobs, determine pay structures, support labor contract negotiations, forecast salary trends, and generate performance pay templates. They can also give advice on salary offers and contribute to formulating budgets. Physician compensation surveys, in particular, help determine what competitive rates of pay are within certain medical specialties, geographic areas, and levels of experience/training.
Compensation surveys and the Internet. . .
Before the Internet, information was much harder to find. One had to trudge to the library or local bookstore to find what they were looking for. These days, however, it is a much different story. Thanks to the advent of the Internet, there is now, oftentimes, too much information and one must weed through and eliminate irrelevant, unreliable, and nonessential data to get to the good stuff.
Easy access to this much information has its good and bad points. Free or low-cost online data is great; but one must remember that the same data is also available to others. What this means is that today’s physician candidates are more knowledgeable about physician compensation than you think. Therefore, if you are a hospital administrator looking at information on compensation surveys, chances are your interviewing physician candidates have also seen this compensation information.
The meat and bones of compensation surveys. . .
While many compensation surveys are of base salaries, others may include a full range of pay information including bonus pay, incentives, and documented shifts in pay. Free compensation surveys can be found as well as a whole range of priced surveys from low-cost to high-cost.
Sources of physician compensation information also vary. Some medical organizations have compensation surveys in the form of annual published books that can be purchased. Consulting firms are another source for compensation surveys. If you are a client, they may offer these at no charge; however, they may charge those who are not clients or may not offer the public access to their surveys at all. Physician recruitment/staffing firms also gather and report on this data (see below).
How survey data is summarized. . .
Compensation surveys will tabulate and summarize collected compensation data in a variety of ways. The two most common ways of summarizing data is by mean (or average) and median (a number dividing the higher half of a sample from the lower half). Data may also be displayed as standard deviations (indicating how spread out data values are), percentiles, and the lowest/highest reported compensation figures within a specialty and geographic region.
What surveys are useful to you?
When considering whether a survey is right for your organization, you must determine several things. First, how old is the data? Is it dated? The older it is, the more unreliable it will be since many compensation changes happen month-by-month. What is the geographic range of the data? Is it broken out into regions? Does the survey include the specialties you need? Does it have all the statistical figures you will need to make your decisions? Lastly, does it explain how the data was collected? All these questions will help you determine whether the information the survey is based upon is reliable and relevant.
In deciding what surveys to use, you must keep in mind your own informational needs by choosing surveys that display a compatible methodology. Physician compensations will be more regional and national; whereas, compensation for other medical staff personnel will be more dependent on the local labor force market than on national or regional numbers.
Additionally, there are some compensation surveys that only list starting salaries for residents. This is great if you are hiring a resident, but not so great for an experienced physician. Therefore, you’ll need to make certain that you don’t use a survey that takes its information from the wrong sample population.
Surveys help you stay within your legal boundaries. . .
Using one or more physician compensation surveys will assist you in offering compensation that is within Stark’s “fair market value.” In order to properly engage in arms length negotiations, it is vital to have a documented paper trail that clearly points to these surveys and other pertinent data as it ensures the legality of your offer.
Who provides surveys?
Physician compensation surveys come from three major sources:
- Medical/Trade Associations
- Consulting Firms
- Staffing/Recruitment Companies
As mentioned earlier, among the medical associations, the two biggest are the American Medical Group Management Association (AMGA) and Medical Group Management Association (MGMA). Both publish yearly surveys.
American Medical Group Association’s survey entitled, Medical Group Compensation & Financial Survey is published every August. The survey includes starting salaries by specialty and lists medians, means, and percentiles, compensation/productivity ratios, and comparative data from previous surveys. It also lists group size and geographic regions.
Medical Group Management Association’s annual report, Physician Compensation and Production Survey is published every September. It has data on physician starting salaries categorized by specialty, rank, and geographic region. It also features tables that summarize complete data in many different categories.
In addition, surveys from consulting and recruitment firms are also available. Some of these reports are free while others can be purchased. Among the free reports, Pinnacle Health Group, a physician recruitment firm, publishes a yearly compensation survey that includes physician starting salaries and bonuses by specialty. This report can be accessed on their web site at www.phg.com.
There are many compensation surveys from which to choose. Making the right choice will enhance your organization’s ability to recruit and retain a valuable pool of physicians that will not only benefit your bottom line but will also benefit your community.