Plastic Surgeon Financial Compensation–Incentivization Models in Surgical Care Delivery: The Past, Present, and Future

Abstract

In 1965, President Lyndon B. Johnson signed the Social Security Act Amendments, establishing Medicare and Medicaid and bringing into law federal financial support for fee-for-service. 1 Fearing that physicians and the American Medical Association would refuse to care for Medicare and Medicaid patients, this law established the precedent of paying physicians based on fees that were "usual, customary, and reasonable." 2 This established fee-for-service as health care's most common and traditional payment model (Fig. 1). 3,4 Unfortunately, over the next several decades, fee-for-service modeling became a large contributor to rising health care costs. In 1973, the Health Maintenance Organization Act was tasked with creating a system that would limit health care providers' ability to maximize the number of procedures performed and focus on preventative care. 5 As a result, large health care systems began to consolidate and experiment with the employment of physicians, offering physicians competitive flat salaries as compensation models. Some of these health maintenance organizations flourished (e.g., Kaiser Permanente), but most did not survive the ever-growing artificial competitive environment. 6

Financial Models for an Academic Practice in Plastic Surgery

“…Moreover, increasing preceptor stipends to better compensate for teaching time significantly improves preceptor retention, as noted by a recent study from Harvard Medical School. 1–9…”

“…It also fails to account for various laborintensive tasks that are not necessarily monetary but still essential for quality care (conducting fact-finding meetings; completing administrative forms; communicating with consultants; attendance in division or department meetings; conferences; grand rounds; morning reports; lecturing; mentoring of medical students, residents, and fellows; publications; weekly laboratory meetings; and institutional representation in national and international conferences). [1][2][3][4][5][6][7][8][9][10][11][12][13]…”

“…With decreasing budgetary support from federal and state governmental authorities for both research and teaching, clinical dollars have become more important in providing the engine to drive the multiple missions required for an academic institution. 1–13…”

“…With decreasing budgetary support from federal and state governmental authorities for both research and teaching, clinical dollars have become more important in providing the engine to drive the multiple missions required for an academic institution. [1][2][3][4][5][6][7][8][9][10][11][12][13] Historically, these three missions became the tripod for the triple threat surgeon. Whether it was even possible for more than a small number of productive and highly efficient individuals to achieve excellence in all three activities, the triple threat has in recent years become endangered.…”

“…2,13 However, no one could expect the significant economic pressure placed on the health care environment and system secondary to the COVID-19 pandemic. [1][2][3][4][5][6][7][8][9][10][11][12][13] Ultimately, institutions are looking for ways to combine facility and profee billing to leverage the benefits of both, depending on insurance reimbursement. This, along with a structured funds flow transfer to the schools of medicine helps to ensure the three missions of the institution.…”