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Pay for Performance

Pay for Performance. College of Medicine Presentation by: Charles Paidas, MD, MBA Joann Strobbe, MsEd Paula Knaus, MA May, 2008. Asset Investment Management System. Purpose:

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Pay for Performance

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  1. Pay for Performance College of Medicine Presentation by: Charles Paidas, MD, MBA Joann Strobbe, MsEd Paula Knaus, MA May, 2008

  2. Asset Investment Management System Purpose: To support the College of Medicine Missions and Strategic Plan by aligning resources with the primary missions and rewarding employees based on their performance. AIMS Council Charge: • Develop a financial management plan that aligns resources with our three missions: teaching, research and clinical service. • Develop a pay for performance plan that links pay to performance. May , 2008

  3. AIMS Development and Implementation Phase I – Design and Development – April, 2005 to June, 2006 AIMS Council Vice Deans of Primary Missions Phase II – Pilot and Refinement – July, 2006 to June, 2008 Five Pilot Clinical Departments and School of Physical Therapy AIMS Executive Committee Vice Deans of Primary Missions Financial Oversight Committee Phase III – Implementation and Continuous Enhancement July, 2008 May, 2008

  4. Pay for Performance Outcomes • A Pay for Performance Plan for Ranked Faculty designed to encourage and reward excellence by linking performance to pay. The Plan consists of: • College-wide minimum percentages of effort in teaching, research/scholarship, service and professional development activities required for each ranked faculty member (5-5-3-2) • Guaranteed State funds by July 1, 2010 to recognize 5-5-3-2 • Assistant Professor - $25,000 • Associate Professor - $30,000 • Professor - $35,000 • College-wide performance requirements for Basic Science and Clinician ranked faculty • Pay Model for calculating the variable (Practice Plan funded) portion of clinician faculty pay (no minimum wRVUs) • Pay Model for Department Chairs May, 2008

  5. Mission Based Management Outcomes • Data warehouse, Health Analysis Reporting Tracking (HART) -- Central collection of financial, human and space data from 13 separate systems. • Management Reporting Tools (reports and electronic Dashboards) providing timely data related to identified metrics related to pay and budgeting. • Funding allocation model for all source budgeting • Template for collecting all funds, regardless of source, that support a department • Model to distribute expenses and revenues by mission • Template for developing all-source budgets for departments May, 2008

  6. Results of AIMS Pilot • Finalized Minimum Percentages of Effort: 5-5-3-2 • Separated Basic Science and Clinician Performance Criteria • Stratified Basic Science Performance Criteria Based Upon percent of Research Assignment • Updated Activity Definitions for Effort Reporting and HART Database • Conducted Effort Reporting Workshops • Identified Data to be Collected into HART Database • Eliminated College-wide Performance Criteria for Clinician ASF Pay in Education and Research/Scholarship Activities • Developed Clinician Faculty Pay Model Linking ASF Pay to Clinical Performance Metrics and R&E Analysis • Eliminated Minimum wRVU Requirement • Proposed Changes in COM Clinical Compensation Policy • Developed Pay Model for Department Chairs May, 2008

  7. Practice Plan Initiatives to Increase Revenues and Reduce Overheads • Placeholder slide for initiatives that are underway to reduce overheads, etc. • Language to be provided by Rick Green and other members of the SMT. May, 2008

  8. AIMS Pay for Performance Cycle Clinician Faculty 1. Annual Determination of Budgeted Total Salary Prior to July 1, the Chair/Division Chief and faculty member will meet during the annual evaluation conference to discuss and agree upon the BTS for the upcoming fiscal year and assignment. Chair/Division Chief and faculty member will review performance data on the HART Dashboard or from the Practice Plan as follows: May, 2008

  9. AIMS Pay for Performance Cycle • Performance Data • Revenue and Expense Analysis (R & E Analysis) for • Individual, Division and Department over the • previous nine months. • wRVUs over the previous nine months and compare • to most recent UHC Survey for comparable • discipline. • Attainment of TGH Hospital based quality • performance indicators over the previous nine • months where applicable. • May, 2008

  10. Pay for Performance Cycle • Performance Data, continued • Attainment of Practice Plan revenue cycle (i.e. 30 • day service-to-post dates) and clinical quality • metrics over the previous nine months (effective • beginning 7/1/08-7/1/09). • Attainment of Department/Division metrics over the • previous nine months. • FAR effort reports for the previous Academic year to • confirm fulfillment of college-wide minimum • percentages of effort. • May, 2008

  11. Pay for Performance Cycle Revenue and Expense Analysis Template See Handout May, 2008

  12. Pay for Performance Cycle 2. First Quarter Performance Review • After the first quarter R&E Analysis is complete, Chairs/Division Chiefs will meet with each faculty member to discuss progress in meeting performance requirements for ASF Pay. The Chair/Division Chief will review performance data referenced in 1. above for the previous quarter. May, 2008

  13. Pay for Performance Cycle • If Individual R&E Analysis indicates insufficient funds • to support the faculty member’s Budgeted Monthly ASF Pay, • a revenue enhancement plan plus an expense reduction plan resulting in a positive R&E balance will be developed. • In addition, if other performance metrics are not met, plan will include actions to meet such metrics. • May, 2008

  14. Pay for Performance Cycle • Mid-Fiscal Year Performance Review and Related Adjustments in ASF Pay After the second quarter R&E Analysis is complete, the monthly ASF Pay is increased or decreased for the following five months based on the Individual meeting the metrics identified in 1. above for the previous six months and on the available funds as reflected on the previous six month R&E Analysis for the Individual and Division/Department. If R&E Analysis indicates insufficient funds to support the faculty member’s Budgeted Monthly ASF Pay, the monthly ASF Pay may be decreased at the end of the second quarter (February 1) in accordance with the Clinical Compensation Policy and Department/Division pay policy. If R&E Analysis indicates that revenues exceed expenses, the monthly ASF Pay may be increased in accordance with the Clinical Compensation Policy and Department/Division pay policy for the remainder of the fiscal year as long as individual revenues continue to exceed expenses. May, 2008

  15. Translating Performance to Pay Clinician Faculty Example I. Annual Determination of Budgeted Total Salary (BTS) and Maximum Potential Salary (MPS) Prior to July 1, the Chair/Division Chief and faculty member will meet to discuss BTS and MPS for the upcoming fiscal year. See example below. Professor X and his Chair/Division Chief agree that his BTS for the upcoming fiscal year will be the 50th %ile of the AAMC salary range for his rank and discipline which is $ 240,000. Professor X’s Budgeted Total Salary for the fiscal year = $240,000 Budgeted University Contracted Salary = $ 80,000 Budgeted VA Pay = $ 40,000 Budgeted ASF Pay = $120,000 Budgeted Administrative Stipend(s) = $ 0 Professor X’s Budgeted Monthly ASF Pay = $ 10,000 May, 2008

  16. Translating Performance to Pay Clinician Faculty 2. First Quarter Performance Review – No Change in ASF Pay After the first quarter R&E Analysis is complete, Professor X and his Chair/Div. Chief will discuss his progress in meeting performance requirements for ASF Pay. If his R&E Analysis indicates insufficient funds to support his Budgeted Monthly ASF Pay, a revenue enhancement plan plus an expense reduction plan resulting in a positive R&E balance will be developed. Also, if other performance metrics are not met, plan will include actions to meet such metrics. May, 2008

  17. Translating Performance to Pay Clinician Faculty 3. Mid-Fiscal-Year Review and Related Adjustments in ASF After the second quarter R&E Analysis is complete,Professor X’s monthly ASF Pay is increased or decreased for the remaining five months of the fiscal year based on his attainment of the performance metrics identified in II. above and on the available funds as reflected on his R&E Analysis and in accordance with the Department/Division ASF pay policy. See examples. May, 2008

  18. Translating Performance to Pay Example 1: Professor X generates revenues that exceed his expenses per R&E Analysis Depending upon the Division/Department ASF pay policy, Professor X may receive an increase in his monthly ASF Pay over the following five months based on 1/5 of the $ amount that his revenues exceed his expenses. Budgeted Monthly ASF Pay = $10,000 Six Month R&E Analysis = $5,000 positive balance $5,000 ÷ 5 = $1,000 Adjusted Budgeted Monthly ASF Incentive Pay* = $11,000 Note: Division/Department ASF pay policy may require that individual deficits or positive balances be shared with other clinician faculty in the Division or Department, resulting in no mid-year ASF Pay adjustment or an adjustment based on a percentage of deficit or positive balance.May, 2008 Clinician Faculty

  19. Translating Performance to Pay Clinician Faculty Example 2: Professor X generates revenues that do not cover his expenses Depending upon the Division/Department ASF pay policy, Professor X may receive a decrease in his monthly ASF Pay over the following five months based on 1/5 of the $ amount that his revenues are below his expenses. Budgeted Monthly ASF Pay = $10,000 Six Month R&E Analysis = $5,000 negative balance $5,000 ÷ 5 = $1,000 Adjusted Budgeted Monthly ASF Incentive Pay = $9,000 Note:Division/Department ASF pay policy may require that individual deficits or positive balances be shared with other clinician faculty in the Division or Department, resulting in no mid-year ASF Pay adjustment or an adjustment based on a percentage of deficit or positive balance. May, 2008

  20. Pay for Performance Cycle • Basic Science Faculty • Prior to July • Meet with Chair to review: • Annual Financial and Academic Statement • Progress in meeting AIMS performance expectations Annual Salary for upcoming fiscal year • October/November • College bonuses are recommended to the Dean by the FOC and EMC • based on previous fiscal year’s performance in Instruction, • Research/Scholarship and Service • January • Meet with Chair to review: • Six month Financial and Academic Statement • Progress in meeting AIMS performance expectations • Develop action plan to meet performance expectations • June and December • Research Faculty Salary Enhancement Bonuses • May, 2008

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