A growing number of hospitals and health systems are investing in physician compensation and building out their in-house teams. Medical groups are no different, with 36% reporting they have a dedicated physician compensation team or committee.1
If you’ve recently joined one of these organizations in a leadership role, it can be tempting to start making changes right away. But before you do anything drastic, your priority should be understanding the ins and outs of how compensation currently works at your organization. Learning and observing can help you make better decisions and avoid early missteps.
What your first 90 days on the job will look like depends on several factors, including the organization’s size, your leadership team’s expectations, and whether you’re inheriting a team or building one from scratch, but following a few best practices can help you earn credibility quickly and build trust with physicians and clinicians. This article explains how to approach your first 30, 60, and 90 days, so you can make the most of this new opportunity.
Before Day One: What Can a New Physician Compensation Leader Do to Prepare?
One of the best things you can do to prepare for your new role as a physician compensation leader is to advocate for and secure the resources you’ll need. It’s easier to negotiate for these necessities during the offer stage, when you still have bargaining power.
Specifically, ask about:
- your budget
- whether you’ll have the authority to hire
- what technology is available
- whether there’s funding for your team to attend conferences and participate in continuing education
Your mindset is just as important. Starting out, it’s important to remember you don’t know what you don’t know. Go into your new role with an open mind and prioritize listening over advising. It’s perfectly normal to encounter processes you’ve never seen before. Be curious and give everything a fair look before deciding something is wrong. Likewise, get comfortable making decisions without complete information; waiting for certainty that isn’t coming only makes it harder to lead.
Days 1 to 30: What Should a New Physician Compensation Leader Focus on during the First Month?
During your first month as a new physician compensation leader, it’s important to learn the foundation before changing anything. You’re not there to rewrite the book yet; you’re there to read it. This means understanding your organization’s compensation philosophy and its reporting structure. For example, is there a physician compensation committee? And if so, what does their approval process look like?
You’ll also want to gather information, focusing on three specific areas:
1. Governance, including the compensation committee charter, the approvals behind each compensation program, and any fair market value (FMV) or compliance documentation, if they exist.
2. Compensation plan mechanics, including plan documents and calculation methodologies, plus physician contracts and amendments.
3. Data, including work relative value unit (wRVU) figures and payment and accrual workbooks. You’ll also want to review the benchmark sources and data cuts your organization uses, whether that’s MGMA, SullivanCotter, AMGA, or a mix.
Together, these tell you how physicians are paid, why they’re paid that way, and whether it holds up to scrutiny.
Beyond that, determine which financial arrangements fall under your purview, such as employed physicians, professional services agreements (PSAs), independents, and PRN (as-needed) arrangements. You’ll likely have heard high-level numbers during the interview process, but the details often aren’t shared until you’re in the door.
Once you have a better idea of what you’re responsible for, ask for a census of those arrangements and note how long it takes to get. If you can pull an accurate, up-to-date list quickly, that’s a good sign your systems and data are well organized. If it takes a few weeks, that’s worth understanding too. The data may spread across systems or depend on manual work. If you’re stepping into a newly created role, expect to build it from scratch.
It also helps to learn each physician compensation program’s history, including:
- when it was last updated
- whether a review cadence exists
- which specialties get more scrutiny than others
Once requests start coming in, this information will help guide your responses.
Finally, start building relationships with key leaders throughout your organization. These include the CFO, the head of HR, and general counsel, along with your clinical and compliance leadership. Ask each of these individuals what they see as the biggest compensation-related challenges and how they’d define success in your role a year from now.
Three departments, in particular, deserve special attention:
- Operations, which understands the day-to-day work your physicians and clinicians do.
- Finance, which manages the monthly accruals that hit the profit and loss (P&L) statement.
- Compliance, which serves as a guardrail on FMV and contracts.
All three are usually represented on your compensation committee, which is likely your most important relationship of all.
In addition to helping you get your bearings, these conversations will allow you to see whether the organization functions as you were told during recruitment. Sometimes important information gets overlooked, so use the first 30 days to fill in gaps.
Days 31 to 60: How Should a New Comp Leader Prioritize Urgent Requests?
During your second month as a new physician compensation leader, move from responding to requests as they come in to deciding which ones need immediate attention and which ones can wait. You’ll get requests from day one, and colleagues will call some of them urgent. However, just because someone says something is urgent doesn’t mean it is. You’ll also want to figure out how much work your team can take on.
Determine Which Requests to Prioritize
Focus first on anything with compliance or regulatory risk, along with time-sensitive items such as a physician contract that’s up for renewal in the next 30 days. It helps to work with your executive leadership team and compensation committee to understand how resources are prioritized.
For example, say the chair of endocrinology tells you the department’s compensation plan hasn’t been updated in 18 months. You check with finance and learn there’s no budget for changes this year, and plans are reviewed every two years anyway. The concern is real, but it isn’t urgent. The better move is to put it on the list for the next review cycle and let the chair know where it stands.
The program history you gathered during your first 30 days on the job will help you make these decisions more confidently.
Hold Off on Sweeping Changes
Avoid making any major changes during your first few months. If a new compensation plan is waiting on your review, it’s okay to tell leadership you need more time to understand the organization’s goals before you make a recommendation. Keep in mind that final approval usually rests with the compensation committee. Your job is to make sure what goes in front of them is sound.
Explain the steps you’ll take to evaluate the proposed plan, and give leadership a realistic timeline. In the meantime, follow your organization’s current pay practices. The one exception is a serious compliance problem, which should go to leadership right away.
Assess Your Team’s Capacity
This is also the time to determine how much work your compensation team can handle. It helps to ask the following questions:
- How many positions does the organization open each year?
- How many contract amendments, exceptions, and plan redesigns are expected?
Compare those responses with the hours your team has available.
A RACI exercise, which maps who is responsible, accountable, consulted, and informed for each task across finance, HR, legal, compliance, and operations, makes it easier to assign responsibilities and figure out whether you need additional resources.
ADVICE
Watch Out for These Pitfalls
- Making changes you can’t easily unwind, or approving one-off exceptions that become the new standard.
- Overpromising change to leadership before you’ve finished your initial compensation plan assessment.
- Judging certain processes before you understand why they exist.
- Holding back dissenting views. The organization hired you for your expertise, so don’t be afraid to offer your perspective once you’ve had a chance to review the current state of things.
Days 61 to 90: What Should a New Comp Leader Deliver by Day 90?
By day 90, as a new physician compensation leader, you should have an assessment of your organization’s current compensation function to share with your leadership team and a roadmap for where you want to take it. It’s just as important to make sure your compensation committee is on board.
Two signs can help you determine whether you’re on the right track:
- You can explain how any of your compensation programs work.
- The compensation committee signs off on your roadmap.
To build your assessment, we recommend taking everything you’ve learned in your first 60 days on the job and measuring it against a compensation team maturity curve. This is a staged model that tracks your team’s progress from staffed and stable all the way to strategic.
Where does your physician compensation team stand today, and where does your organization want it to be in the future? Use the documents, what you learned about your team’s capacity, and the conversations you’ve had with leaders across the organization to identify what’s missing or outdated.
For example, you might find that there is no standardized compensation plan language, documented FMV policy, or official compensation philosophy statement. Whatever you uncover, share those findings with your leadership team, and use them to support your processes moving forward.
Another important part of your job as a physician compensation leader is building relationships with physicians and clinicians. The next section offers tips for making that process easier.
How Can New Comp Leaders Build Trust With Physicians and Clinicians?
The most important way to build trust with your physicians as a new physician compensation leader is transparency. Specifically, your physicians and clinicians should be able to see exactly how their pay is calculated and know they’ll be heard when something goes wrong, even if the problem they’re experiencing predates your arrival.
Earlier in my career, I (Brandon) stepped into a newly created physician compensation leadership role at a large health system. There was no predecessor and no established team, and I was tasked with starting to build one within my first 90 days. Compensation programs had been developed independently across the system, and my mandate was to bring equity and continuity to them. Early on, I saw a real opportunity to establish shared fundamentals.
Something as basic as how we calculated a wRVU, or how we presented wRVUs back to physicians through dashboards, could be standardized across hospitals and specialties. There was also an opportunity to strengthen trust through more transparent reporting, more consistent application of our plans, and a clearer understanding of how they worked. Physicians can’t buy into a compensation program they don’t understand, so creating consistent, visible calculations became one of our first priorities.
How Transparent Should Comp Leaders Be About Physician Pay?
As a physician compensation leader, you should be fully transparent about how your organization’s compensation plans work. Plans are often built to apply to everyone in a specialty; that consistency is what equity looks like. However, certain information should remain confidential, including what one physician or clinician is paid compared to their colleagues and what’s discussed during your compensation committee meetings.
Some organizations also choose not to share their competitive positioning, such as where their pay falls against benchmarks. Work with your compensation committee to determine how open you want to be.
It’s important to remember that all of your compensation calculations can be mathematically correct, but if your physicians don’t understand how they’re paid, they won’t trust the numbers. The good news is that transparency can help build that trust. For instance, if you pay physicians based on wRVUs, show them exactly how those wRVUs are calculated if they ask, including the CPT-level detail, date of service, and modifier position.
How Can New Physician Compensation Leaders Engage Physicians?
As a new physician compensation leader, you can engage physicians and clinicians by listening to their concerns, including any skepticism around past pay problems. We also recommend meeting with physician leaders who can speak for larger groups.
Compensation is personal, and there are people and families behind every paycheck. Skeptical physicians and clinicians can tell you what hasn’t worked in the past. Even if a grievance predates your tenure, it’s okay to apologize for the experience and explain how you plan to prevent it from happening again.
If you’re at a larger organization, there’s no way you’ll be able to meet with every physician on staff, but you can meet with physician leaders. In Brandon’s previous role, his team started by meeting with administrative and executive leadership to understand the bigger picture and then moved on to physician champions and subcommittees. During those conversations, we asked the leaders about common pain points and what they liked and disliked about their compensation plans.
We also recommend identifying the informal influencers in your organization, the people others trust most even if they don’t hold formal leadership titles. These individuals can tell you which physicians are most vocal and which pay-related complaints come up most often. Their support is especially important once you start recommending changes.
How Often Should Physician Compensation Leaders Communicate With Physicians?
As a physician compensation leader, you should communicate with your physicians and clinicians on a predictable schedule that aligns with how often new payment data becomes available. For example, if wRVUs post monthly, your physicians should receive monthly dashboards, with quarterly and annual check-ins on top of that.
In our experience, communication works best on a set schedule. Give physicians compensation dashboards on that schedule, and make sure a compensation professional is available for routine questions, with more sensitive conversations handled by a senior-level professional. Regular town halls with open Q&A go a long way too, especially when senior leaders attend and answer questions directly. They’re also a good chance to explain compensation basics, like what a wRVU is and how a panel is determined. Finally, review each plan annually against national benchmarks so physicians know it isn’t set and forgotten.
If you work at a smaller organization, you can scale this schedule down. Regardless of size, you can deliver dashboards internally or through a platform like Ludi. It also helps to match the messenger to the conversation. Analysts can tackle routine questions, but managers or directors should be responsible for more sensitive or difficult conversations.
How Should Physician Compensation Leaders Address Pay Disputes or Complaints?
As a physician compensation leader, you should start by determining whether a pay concern is a dispute or a complaint, because each situation requires a different response. Here’s a closer look at the differences between disputes and complaints:
Disputes. A dispute is about the facts, such as a possible wRVU miscalculation.
Complaints. A complaint is a physician’s dissatisfaction with their pay, even if everything is calculated correctly.
If a dispute arises, investigate the issue and correct any errors you find. Then check whether the same problem affects other physicians or clinicians, because there’s a good chance it does.
Complaints require a different approach. First, listen to what the physician is saying and be human about it. Even if their complaint isn’t based on errors to fix, you can still offer transparency and a path forward. For example, if a physician says they’re unable to review their dashboards regularly, commit to sending them on a set schedule. If they feel their pay is too low, explain how you review compensation plans each year against national benchmarks. You won’t always be able to change the situation that causes a complaint, but empathy and education can go a long way toward strengthening and maintaining relationships with your physician staff.
Frequently Asked Questions
What should a new physician compensation leader do in the first 90 days?
Focus on learning before changing anything. Use your first 30 days to gather information and build relationships, and the 30 days after that (31 to 60) to sort urgent requests from those that can wait. You’ll also want to assess your team’s capacity. In month three (days 61 to 90), share an assessment of the compensation program and your planned roadmap with leadership.
What documents should a new physician compensation leader request?
Focus on three areas: governance, compensation plan mechanics, and data. For governance, request the compensation committee charter, the approvals behind each compensation program, and any FMV or compliance documentation.
For plan mechanics, gather plan documents, calculation methodologies, and physician contracts and amendments.
For data, review wRVU figures, payment and accrual workbooks, and the benchmark sources your organization uses.
Should a new compensation leader redesign comp plans in the first 90 days?
No. Avoid making major changes during your first few months on the job, and follow your organization’s current pay practices in the meantime. If your leadership team is waiting on a new compensation plan from you, explain that you need more time to learn the organization’s goals. The only caveat is if you identify a serious compliance problem, which should be elevated to leadership immediately.
How transparent should physician compensation leaders be about physician pay?
You should be completely transparent about how your organization’s compensation plans work. However, certain information should remain confidential, including what one physician or clinician is paid compared to their colleagues and what’s discussed during your compensation committee meetings. Work with your compensation committee to determine whether to share your competitive positioning.
What’s the difference between a pay dispute and a pay complaint?
A pay dispute is a factual error that you can investigate and correct, such as a wRVU miscalculation. A complaint is a physician’s dissatisfaction with their pay, even when everything is calculated correctly. Disputes can be easily corrected, but complaints require a different approach. Listen to what the physician is saying, be human, and offer transparency and a path forward.
What Comes After the First 90 Days?
After your first 90 days as a physician compensation leader are complete, you can start putting your roadmap into action. This includes making the case to leadership for any additional resources you need that weren’t negotiated before your start date, building out your team, and moving up the maturity curve.
Throughout this process, we recommend building your network. Within your organization, get to know people at every level and position yourself as a trusted advisor. Outside your organization, connect with consultants and peers in similar roles. Professional groups like the American Association of Provider Compensation Professionals (AAPCP) are also great resources for continuing education.
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