The Department of Veterans Affairs is considering changing its physician compensation formula to one that rewards performance, a move that is spurring opposition from physicians.
The VA has convened a task force composed of managers, physicians and physician-payment consultants to look at making a part of physicians' and dentists' pay dependent on their productivity in patient care, research, teaching or management.
The relatively quiet effort to change the physician compensation structure is part of a more visible restructuring of the 750-facility VA healthcare program into integrated networks comparable to private-sector health systems. The current compensation plan is about a year old.
VA officials said changing physician pay to reward performance parallels trends in the private sector, with which the VA must compete to attract qualified doctors.
Thomas Garthwaite, M.D., the VA's deputy undersecretary for health, said the current system pays the VA's 14,204 physicians and 862 dentists on the basis of seniority, specialty and location. In fiscal 1995, the VA paid $1.6 billion in salaries to physicians.
But because the system seldom pays more for superior performance, the system has lost "outstanding" physicians, Garthwaite said.
"Physician compensation is a key piece in recruitment, retention and rewarding the right kind of behavior," Garthwaite said. "It's really our goal to make the people who come in early and stay late differentiable from the people who come in late and leave early."
But a group representing VA practitioners is resisting such a move, saying its members believe it is just an effort to reduce the VA's spending growth by shortchanging doctors and dentists.
Samuel Spagnolo, M.D., president of the National Association of VA Physicians and Dentists, said the seniority-based pay system was to reward doctors for staying in the system.
Furthermore, he said many of the VA's doctors took smaller paychecks than they could have received in the private sector because the VA provided them the opportunity to teach and conduct medical research as well as care for patients.
If the VA cuts physicians' pay and reduces their opportunities to teach and research, few will want to stay, Spagnolo said.
"It's a stealth issue," Spagnolo said. "It's the biggest issue facing VA at the moment. It is likely to shake the entire system."
Garthwaite said the opposition is slowing the redesign of the compensation system, and there is no timetable for making changes. He said VA officials will have to "do some selling, do some communicating" before it can implement its overhaul.