Is Your Bonus Attainable or Just a Tease?

Leigh Page

Disclosures

November 17, 2016

In This Article

Real Money or Smoke and Mirrors?

You were counting on that bonus last year, weren't you? That money could have been used to pay down debt, save for your kids' college education, or bulk up your retirement savings. Maybe you even thought about using your bonus to take that dream vacation you've been putting off.

Problem is, the criteria for getting the bonus—money you earn in addition to your base pay—were virtually unattainable. You quickly discovered that no amount of late nights would be enough to earn it.

It is often possible for some physicians to meet their bonus threshold, which is usually based on productivity. But if it forces you to limit patient visits or take other shortcuts, the criteria may not be right for you. If you think that what you're being required to do is wrong, then as far as you're concerned, the bonus is unattainable.

And that may be no accident. There's a financial reason why a hospital or health system would put bonuses out of reach, says John E. Hill, a partner in HSG, a Louisville, Kentucky-based firm that helps hospital organizations create compensation formulas. In the push to hire the physicians it needs, the organization may have bid up base salaries to levels that exceed the value of each doctor's reimbursements and other services, he says.

"If a hospital is losing millions of dollars a year on its physicians, which is quite common, it may choose to set a generally unattainable bonus," Hill says. "The hope is that eventually earnings will rise enough to sustain payment levels, but until then, the hospital doesn't want to pay out more money."

Setting unattainable bonuses is usually only done by hospitals, health systems, and some large practices, says Dennis Hursh, an attorney in Middletown, Pennsylvania, and author of the book The Final Hurdle: A Physician's Guide to Negotiating a Fair Employment Agreement.

Partners in small or medium-sized groups, Hursh says, have a strong motivation to keep the bonus attainable. "They're expecting these doctors to be partners someday, whereas their counterparts in hospitals will always be treated as employees," he explains.

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