Physician groups appear to be lagging behind other businesses when it comes to tying executive pay to financial performance.
Net practice revenues is the primary factor affecting executive and management compensation in medical groups, according to a recent survey by the American Medical Group Association and Ernst & Young (See chart).
The survey found no relationship between compensation and key performance indicators, such as the percentage of net revenues returned to physicians. That's not necessarily a good thing, according to the Alexandria, Va.-based AMGA, which recommends a stronger link between organizational performance and executive rewards.
The amount of compensation at risk for the top five executives at the smallest physician organizations was 3%, compared with 5% for middle-sized groups and 9% for large groups.
The survey represents data from 52 medical groups, management services organizations, physician practice management companies, integrated delivery systems and other organizations representing 746 executives and managers.