If you haven’t been a nurse practitioner for long, you will quickly find out that there are many ways nurse practitioners are paid. Some employers pay salaries, others compensate NPs on an hourly basis. Rather than paying a set amount per hour or per pay period, some employers choose to pay nurse practitioners based on productivity.
Productivity payment arrangements can be quite contrived. Most are based on the RVU system (for more about RVU’s check out this post and this post). Essentially, these nurse practitioners are compensated based on the amount they bill. The more revenue they bring in to the clinic or hospital, the more they earn. This payment structure is controversial as some believe it leads to over-ordering of tests and procedures potentially putting patients in harm’s way. Regardless of the ethics behind productivity pay and bonus structures, a company culture that pays based on production has a few pitfalls as a result of this compensation model.
Here are a few downsides of working for an employer that embraces a production-based pay structure.
1. Competitive vs. Collaborative Environment
If you’re being paid based on how much you bill, this gives you great incentive to be busy. Seeing patient after patient in a hurried manner seems much more tolerable if you’re racking up more and more earnings while doing so, right?
The problem with this model is that in many clinics and hospitals there are only so many patients to go around. And, every provider wants to get some of the action. If, for example, you work in the emergency department, on a slow day providers are earning less money. So, each time a new chart hits the rack, there’s a competitive vibe that makes it’s way around the room. Who will claim the next patient? Or, if there are two patients waiting to be seen, who will win the chart with the highest earning potential?
Productivity payment models naturally lead to a more competitive rather than a collaborative environment. Most providers are capable of keeping competitive vibes under wraps, but the undertones will undoubtedly still exist. A competitive environment isn’t the best atmosphere for every nurse practitioner.
2. Mistrust Between Employee and Employer
If you’ve ever been paid based on RVUs, or researched this system, you know it is complex. Each diagnosis and procedure is awarded a value, which is then run through a series of calculations to determine how much you will be reimbursed for caring for a particular patient. As a practicing nurse practitioner, it’s impossible to keep track of this on your own.
If you are paid on production, you must trust your employer when it comes to tracking your billing and paying you your fair share. Or, if you are paid on a bonus structure, you must have faith your employer is correctly tracking your metrics. If your company has shoddy record keeping, isn’t trustworthy, or makes honest mistakes, under this compensation model your paycheck could suffer. Not to mention, even if your employer is walking the straight and narrow, rewarding employees based on production can lead to unfounded mistrust.
3. Added Stress and Worry
Nurse practitioners paid on production have added stressors when it comes to work. Not only are they concerned with caring for patients, but also the well being of the practice as a whole. On one hand, it’s helpful to have every clinic or hospital employee invested in creating a good patient care environment and promoting successful business practices. On the other hand, if your practice is poorly managed, located in an inconvenient area, or simply slow, low patient volume means you aren’t getting paid as much for showing up at work.
4. Compromising Patient Care
Production based models run into some ethical problems in the medical world. As a nurse practitioner compensated in this manner you will earn more for ordering more tests and procedures. However, more does not always equal better when it comes to patient care. Production incentives create internal conflict in your decision making as a medical provider. You have to weigh the patient’s best interests along with your personal financial interests. While most nurse practitioners choose the high road in these situations, not all make the right choice. Regardless of your ethics, thinking about how much you’re earning each time you pick up a patient’s chart creates an added layer of complexity to patient care.
RVU systems, bonus structures, and other production based compensation plans are intended to reward hard work. Unfortunately, they fall short in other areas. Thinking through the way you are paid is important in considering any nurse practitioner position.
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