Rubash set out to transform the MGOA pay plan to look more like those of non-academic groups. He began to work on a new plan that called for each doctor to be financially self-sufficient.

Rubash set out to transform the MGOA pay plan to look more like those of non-academic groups. He began to work on a new plan that called for each doctor to be financially self-sufficient. If a doctor were to lose money for the group, that doctor would pay the group back through his or her own funds in the next compensation period. Each doctor had a responsibility to be productive, he decided. Rubash said, “Whenever a doctor is in deficit, we’ve got to ask them, ‘Who would you like to have pay for your deficit?’ No one can argue that it is someone else’s responsibility.”

Table C Financial Performance of Physicians at MGOA in 1999

Source: MGOA internal documents. The exact data in the exhibit have been modified to prevent the identification of individual MGOA doctors. However, the patterns across doctors and over time have been preserved.

Reimbursements Flows

MGOA and the MGH

MGOA was essentially an independent academic hospital-based physician organization that operated within the facilities of the Massachusetts General Hospital. Aside from cash transfers related to the group’s use of MGH office space and surgical residents, the surgical group and the hospital were financially separate. When an MGOA surgeon operated on a patient at MGH, the patient’s insurer reimbursed the group and the hospital separately. All collections from insurers were handled by a centralized administrative staff at MGOA, who reported to the group’s management and not to the surgeons. MGOA was responsible for paying for all costs related to their business, including doctors’ salaries. The physicians had to be paid out the group’s own revenue sources—primarily reimbursements from insurers when the doctors performed surgeries.

Doctor Revenues Expenses Surplus Physician 1 $417,000 $269,000 $149,000 Physician 2 $424,000 $388,000 $36,000 Physician 3 $652,000 $514,000 $138,000 Physician 4 $495,000 $416,000 $79,000 Physician 5 $435,000 $406,000 $29,000 Physician 6 $411,000 $505,000 ($94,000) Physician 7 $270,000 $253,000 $17,000 Physician 8 $403,000 $371,000 $31,000 Physician 9 $295,000 $301,000 ($6,000) Physician 10 $99,000 $166,000 ($66,000) Physician 11 $187,000 $275,000 ($88,000) Physician 12 $495,000 $401,000 $94,000

Total $4,584,000 $4,265,000 $319,000

For the exclusive use of D. Chen, 2018.

This document is authorized for use only by Dongliang Chen in HRM 5030 Comp and Bens-1 taught by MATTHEW SAMEL, Johnson & Wales University from May 2018 to Nov 2018.

904-028 Performance Pay for MGOA Physicians (A)

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