Aligning Clinical Compensation With Clinical Productivity: Design and Implementation of the Financial Value Unit (FVU) System in an Academic Department of Internal Medicine

Stites, Steven MD; Steffen, Patrick MHA; Turner, Scott MBA; Pingleton, Susan MD

Academic Medicine:
doi: 10.1097/ACM.0b013e3182959df9
Articles
Abstract

A new metric was developed and implemented at the University of Kansas School of Medicine Department of Internal Medicine, the financial value unit (FVU). This metric analyzes faculty clinical compensation compared with clinical work productivity as a transparent means to decrease the physician compensation variability and compensate faculty equitably for clinical work.

The FVU is the ratio of individual faculty clinical compensation compared with their total work relative value units (wRVUs) generated divided by Medical Group Management Association (MGMA) salary to wRVUs of a similar MGMA physician.

The closer the FVU ratio is to 1.0, the closer clinical compensation is to that of an MGMA physician with similar clinical productivity. Using FVU metrics to calculate a faculty salary gap compared with MGMA median salary and wRVU productivity, a divisional production payment was established annually.

From FY 2006 to FY 2011, both total faculty numbers and overall clinical activity increased. With the implementation of the FVU, both clinical productivity and compensation increased while, at the same time, physician retention rates remained high. Variability in physician compensation decreased. Dramatic clinical growth was associated with the alignment of clinical work and clinical compensation in a transparent and equable process.

Author Information

Dr. Stites is Peter T. Bohan Professor and Chair, Department of Internal Medicine, executive vice chancellor and executive dean, University of Kansas School of Medicine, Kansas City, Kansas.

Mr. Steffen is department administrator, Department of Internal Medicine, University of Kansas School of Medicine, Kansas City, Kansas.

Mr. Turner is executive director, University of Iowa Children’s Hospital, Iowa City, Iowa, and former department administrator, Department of Internal Medicine, University of Kansas School of Medicine, Kansas City, Kansas.

Dr. Pingleton is Joy McCann Professor of Women in Medicine and Science, associate dean for continuing education and professional development, and professor of internal medicine, University of Kansas School of Medicine, Kansas City, Kansas.

Correspondence should be addressed to Dr. Pingleton, Mail Stop 4001, University of Kansas School of Medicine, 3901 Rainbow Blvd., Kansas City, KS 66160; telephone: (913) 588-4484; e-mail: spinglet@kumc.edu.

© 2013 by the Association of American Medical Colleges