Physician Incentive Compensation Plans in Academic Medical Centers: The Imperative to Prioritize Value

The emphasis on clinical volume in physician compensation plans has diminished professional vitality in academic medical centers and increased the cost of health care. Physician incentive compensation plans that focus on clinical volume can distort clinical encounters and fail to incorporate the professionalism and intrinsic motivators of clinicians. We assert herein that physician incentive compensation plans should reward clinical value (quality/cost) rather than clinical volume. The recommended change is compelled by the tenets of medical professionalism, the need to cultivate meaning in clinical practice, and the urgent financial and moral imperatives to improve health outcomes and reduce cost. The design of physician incentive compensation plans should incorporate accurate and valid measures of quality and cost, behavioral economic considerations, transparency and equity, prospective assessment of the impact on key outcomes, and flexible elements that encourage innovation and preserve fidelity to unique practice circumstances. Physicians should be recognized in compensation plans for enhancing the value of care, inspiring and educating the future clinical workforce, and improving public health through discovery.