Addressing physician compensation and practice productivity.

Medical groups are challenged to adopt a systematic, evidence-based approach to selecting a physician compensation method that supports the group's overall financial and organizational strategies, including managed care contracting strategies; is consistent with the philosophies, beliefs, and attitudes of the group's membership as they pertain to individual productivity; and can be supported by the organization's information technology, decision support, and management infrastructures. This article explains how research in physician profiling, benchmarking, general compensation theory, and physician productivity provides evidence that can serve as the foundation for a pragmatic approach to evaluating physician compensation method alternatives. It also presents a unique production-based compensation model for illustrative purposes.