Is Your Job Performance Being Evaluated for the Wrong Factors?

Leigh Page

February 11, 2020

Most physicians get an annual performance review, and may be either elated, disappointed, or confused with their rating.

But some physicians say the right factors aren't being evaluated, or in many cases, the performance measures promote efforts that are counterproductive.

"Bonuses are a behaviorist approach," says Richard Gunderman, MD, professor in the schools of medicine, liberal arts, and philanthropy at Indiana University. "The presumption is that people will change if they get some money — that they will do what the incentive wants them to do and refrain from what it doesn't want them to do."

Gunderman says this often means just going through the motions to get the bonus, and not sharing goals that only the administration cares about. "The goals might be to lower costs, ensure compliance with regulations or billing requirements, or make patterns of care more uniform," he says. "These are not changes that are well tailored to what patients want or how doctors think."

The bonus is a central feature of the annual review. Merritt Hawkins, the physician search firm, reports that 75% of the physician jobs that it searches for involve some kind of production bonus.

Bonuses often make up at least 5% of total compensation, but they can be quite hefty in some specialties. Among hospitalists, the average incentive pay is about 15% of compensation, according to a 2019 assessment.

Having to fulfill measures that they're not excited about can lead physicians to feel disengaged from their work, he says. And this disengagement can contribute to physician burnout, which has climbed to very high rates in recent years.

A 2018 paper by two physician leadership experts explored this problem with bonuses. "A growing consensus [of experts] suggests that quality-incentive pay isn't paying the dividends first envisioned," they write.

The problem, they stated, is that the measurements tied to a bonus represent an extrinsic motivation — involving goals that doctors don't really believe in. Instead, they state, physicians need to be intrinsically motivated. They need to be inspired "to manage their own lives," "to get better at something," and "to be a part of a larger cause," they write.

How to Develop a Better Review Process

"The best way to motivate improved performance is through purpose and mission," says Robert Pearl, MD, former CEO of the Permanente Medical Group in California and now a lecturer on strategy at the Stanford Graduate School of Business.

The review process, Pearl says, should inspire physicians to do better. The doctors, he says, should be asking themselves: "How well did we do in helping maximize the health of all of our patients? And how well did we do in avoiding medical errors, preventing complications, meeting the needs of our patients, and achieving superior quality outcomes?"

When he was CEO of Permanente, the huge physician group that works exclusively for health maintenance organization Kaiser, Pearl and fellow leaders revamped the review system that all Permanente physicians undergo.

First, the Permanente executives provided all physicians with everyone's patient-satisfaction data, including their own. That way, each physician could compare performance to others and assess strengths and weaknesses. Then Permanente offered educational programs so that physicians could get help in meeting their goals.

"This approach helped improve quality of care, patient satisfaction, and fulfillment of physicians," Pearl says. Kaiser-Permanente earned the highest health plan member satisfaction rating by J.D. Power and higher rankings by the National Committee for Quality Assurance. 

Permanente does not base the bonus on relative value units (RVUs) but on performance measures that are carefully balanced to avoid too much focus on certain measures. "There needs to be an array of quality measures because doctors deal with a complex set of problems," Pearl says. For example, a primary care physician at Permanente is assessed on about 30 different measures.

Physicians are more likely to be successful when you emphasize collaboration. Dr Robert Pearl

Although Permanente physicians are compared with each other, they are not pitted against each other but rather are asked to collaborate, Pearl says. "Physicians are more likely to be successful when you emphasize collaboration," he says. "They can teach each other. You can be good at some things, and your colleague can be good at others."

Permanente still has one-on-one yearly evaluations, but much of the assessment work is done in monthly meetings within each department. "There, small groups of doctors look at their data and discuss how each of them can improve," Pearl says.

The 360-Degree Review Is Valuable but Has Some Problems

Physicians should be getting a lot more feedback about their behavior than they are actually getting, according to Milton Hammerly, MD, chief medical officer at QualChoice Health Insurance in Little Rock, Arkansas.

"After residency, you get very little feedback on your work," says Hammerly, who used to work for a hospital system. "Annual reviews for physicians focus almost exclusively on outcomes, productivity, and quality metrics, but not on people skills, what is called 'emotional intelligence.' "

Hammerly says he saw the consequence of this lack of education when he was vice president for medical affairs at the hospital system. He was constantly dealing with physicians who exhibited serious disruptive behavior and had to be disciplined. "If only they had gotten a little help earlier on," he says.

Hammerly thinks 360-degree evaluations, which are common in corporations but rarely used for physicians, could benefit the profession. He discovered the 360-degree evaluation when it was used for him at QualChoice, and he has been a fan ever since.

The approach involves collecting evaluations of you from your boss, your peers, and from people who work for you. That is, from 360 degrees around you. These people are asked to rate your strengths and weaknesses in a variety of competencies. In this way, you get feedback from all of your work relationships, not just from your boss.

Ideally, the evaluators are anonymous, and the subject works with a facilitator to process the information. But 360-degree evaluations can be done in all kinds of ways.

Critics of the 360-degree evaluations say the usual anonymity of evaluators allows them to be too harsh. Also, evaluators may be too subjective: What they say about you says more about their own perspective than anything about you, the critics say.

But many people think 360-degree evaluations are at least going in the right direction, because they focus on people skills rather than just meeting metrics.

Robert Centor, MD, an internist in Birmingham, Alabama, and member of the performance measures committee of the American College of Physicians, says the best way to improve performance is to have conversations about your work with colleagues on the department level. "For example, 20 doctors could meet to discuss a certain issue, such as the need for more vaccinations," he says. "That doesn't have to get rewarded with a bonus payment."

Says Pearl, the former Permanente Medical Group CEO: "Doctors need feedback from their colleagues. Without feedback, how else do you get better? You can only improve if you can know how you're performing compared to others."

Leigh Page is a freelance writer based out of Chicago, Illinois.


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