Keeping Physician Compensation Affordable



Health systems do not necessarily expect employed physician practices to operate in the black, but they are operating so deeply in the red that many systems are becoming financially anemic. Further contributing to the fiscal drain is the fact that physician compensation rates are increasing while reimbursement rates are declining. These trends threaten the financial solvency of health care organizations and, as a result, hospital boards and leadership teams are tending more critically to the financial performance of their physician enterprises. To become or remain economically sustainable, health systems need to correlate physician compensation with market factors and the financial realities of a practice.

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