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As psychiatrists struggle to define what is fair and appropriate compensation for their services, some psychiatrists who run systems of care are devising innovative methods that they believe fairly compensate productivity without shortchanging care.
One of those leaders is W. Walter Menninger, M.D., chief executive officer of the not-for-profit Menninger Foundation in Topeka, Kan. During an annual meeting workshop on compensation, Menninger described how the foundation has struggled to develop a better way of paying employees.
The Menninger Foundation has developed a hybrid system of salary and productivity-based bonuses. Seniority and educational experience beyond the minimum add to the base salary, which begins at $97,500 a year, Menninger explained. Psychiatrists are reviewed after the first six months and given a pay increase if appropriate. Thereafter reviews occur annually.
The goal is to provide staff psychiatrists with an incentive to be more productive, he added.
Productivity is defined in terms of credit for clinical services that produce predictable income. Those who render more billable hours of clinical services are given credit that goes toward variable compensation, thus giving staff an opportunity to earn significantly more than base salary.
The challenge, remarked Menninger, "has been to evaluate [productivity] effectively."
The foundation has developed its own version of "relative value units," Menninger explained. "There have been a lot of bugs to work out, and it has not occurred without a struggle" on the part of both management and staff, he noted. Over the last two years the foundation has been able to operate more profitably, and most staff psychiatrists have reported that they are more satisfied, he said. The complexities of clinical psychiatry make defining the optimal balance between services and compensation a "moving target" in frequent need of review, he added.
Some aspects of traditional institutional practice have been pared back, said Menninger. "We no longer have the luxury" of frequent, protracted case conferences, he remarked. But case conferences are considered in productivity assessments, with a predetermined number of case-conference hours built into the compensation system, he said. Program directors are allotted eight case-conference hours weekly.
It is true that "you can't practice like you used to practice," said Menninger, and that has led some staff psychiatrists to leave.
Tracking productivity across all disciplines has made the task of determining appropriate compensation easier, said panel cochair Carmel Foley, M.D., chief of the division of child and adolescent psychiatry at Schneider Children's Hospital, Long Island Jewish Medical Center, New Hyde Park, N.Y. It lets staff see their contribution to productivity on a weekly basis in relatively objective terms, she added.
The problem in public systems of care is that "there are relatively few things that [only] a psychiatrist can do," commented workshop cochair Philip Veenhuis, M.D., medical director of the North Carolina Division of Mental Health, Developmental Disabilities, and Substance Abuse Services in Raleigh. One survey of public sector psychiatric facilities in North Carolina found that patients rated psychiatric nurses most helpful, with psychiatrists ranking far down on the list.
He glumly predicted that the public sector will see a continuation of the current trend, which is "to hire the lowest paid individual" possible without increasing liability. Because physicians "have skills that nobody else possesses," however, they will continue to have job security, predicted Veenhuis. In the long-term, however, many physicians may end up being compensated at the same level as Ph.D.s and some M.A.s, he added.
Menninger predicted that psychiatrists, if not other physicians, who are unionized are "heading for Armageddon" and would eventually find themselves unemployed.
If there are cuts in Medicare reimbursement, as predicted, psychiatric facilities will be under pressure to reduce the average length of stay for inpatients, said Menninger. Such changes don't mean "we can't provide good care," he asserted. "It just means we can't do it the way we used to do it. You have to think creatively instead of just saying, 'I can't do the job I used to do.'"
The Menninger Foundation Web site is www.menninger.edu/.