Why are physicians becoming employed? Time and complexity of managing a practice; costs of managing a practice as well as costs associated with implementation of electronic medical records; concerns about declines in reimbursement; movement toward bundled payments; patient-focused care that will change the ways that physicians practice medicine; and reduced ability to negotiate favorable contracts with third party payors.

Scrambling to meet the mandates of widespread reform, some health care providers and boards are unaware of new fiscal oversight risks in executive and physician compensation. Moreover, when boards do recognize a need to review and align executive and physician compensation, board members are often unsure where new and emerging risks may be uncovered.

Improving Board Oversight, Mitigating Risks

As independent consultants, our advisors counsel boards to comprehensively review and update practices and policies. Uniquely, our advisors support boards with not-for-profit health care's most comprehensive compensation data, including Sullivan, Cotter and Associates, Inc.'s national, annual and highly detailed Managers and Executive Compensation in Hospitals and Health Systems surveys and reports. Our advisors also have access to the largest and most comprehensive physician compensation surveys available in the market.

Answering Tough Questions to Deliver Sound Strategies

By ensuring that boards answer today's toughest compliance questions, SullivanCotter advisors develop governance strategies, policies and processes that demonstrate sound oversight aligned with all the demands a board must consider, from mission-driven values to regulatory compliance.

Among the tough questions we help your board ask and answer:

• Are all executive and physician compensation practices, cash, incentives as well as benefits, within market practices? If not, why?
• Are they consistent, documented and defensibly prudent across the enterprise?
• How do supplemental executive retirement plans and executive incentive compensation components align with broader strategies for retention? Again, are the criteria and decision processes documented and defensible?
• Are the physician compensation approaches and levels consistent with broader regulatory guidance, including Stark, Anti-Kickback and OIG (Office of Inspector General) opinions?

Answering these questions, crafting governance strategies that address them, and documenting compliance are essential steps to mitigating emerging risks and limiting governance liability.

As never before, radical economic change mandates radical governance review. Revised strategies can position for growth while ensuring comprehensive, sound fiscal oversight of all pay practices.