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The Changing Landscape of Healthcare Market Survey Data

June 25, 2024

Provider compensation professionals rely in part on pertinent and available published market survey data (provider compensation and production, medical directorship, call pay, academic, etc.) for setting compensation terms, performing market benchmark analysis, and developing conclusions of commercial reasonableness and fair market value. It is all done in the spirit of determining compensation levels that are market competitive and legally defensible.

Much has been written over the years about the proper and improper application of survey data. We know surveys aren’t inherently perfect, but they do provide some level of objective market insight. If you hang around the provider compensation water cooler long enough, you hear phrases like “art and science,” “facts and circumstances,” and “the survey says.” We peer into anything that government agencies (or their experts) say that might give us better insight into their views on compliance with complex laws and regulations that govern provider relationships.

We could go down the proverbial rabbit hole about some of the common misconceptions, misuses, myths, and general knocks against survey data, such as the following:

  • The misinterpretation and misapplication of compensation-per-wRVU rates (i.e., the inverse relationship between compensation-per-wRVU rates and compensation-per-FTE levels; 90th percentile producers don’t get paid at 90th percentile rates per wRVU)
  • The inadequate reflection of local market conditions (e.g., rural practices, high-cost markets, and supply and demand of certain specialties)
  • The voluntary nature of reporting to surveys
  • A limited sample size of reported data in comparison to the much larger number of active and practicing providers in the national market
  • A potential lack of consistent adherence to survey definitions by reporting organizations
  • A potential bias toward large practice groups
  • The overlap of responding organizations in different surveys
  • The time lag in reported data
  • The lack of correlation with practice economics (i.e., large hospital/health system medical group losses)
  • The variation in provider FTE definitions

Added to that is the impact from the COVID-19 global pandemic and significant impact on wRVU attribution from Medicare Physician Fee Schedule updates during a period of ongoing transition from volume to value.

We could argue the merits of surveys – such as those published by the Medical Group Management Association (MGMA), American Medical Group Association (AMGA), SullivanCotter, Gallagher, Association of American Medical Colleges (AAMC), BuckheadFMV, Neurosurgery Executives’ Resource Value and Education Society (NERVES), American Society of Transplant Surgeons (ASTS), etc. – and how they best could or should support the provider contracting and valuation process. But what happens if those surveys themselves undergo seismic change? Or what if the surveys aren’t made broadly available to all members in the valuation community?

As recently reported in Becker’s Hospital Review, at least 18 MGMA state chapters have already ended their MGMA affiliations and reaffiliated through state chapters of Healthcare Leaders Association (HLA). While MGMA touts 12% growth in their new 2024 survey dataset, the question remains: Will future MGMA surveys be impacted as a result of this split? Many organizations rely on MGMA to set certain compensation terms, such as base salary, production-based conversion factors, and compensation limiters/caps. And valuation firms rely on MGMA as a trusted resource for provider benchmarking, often as part of a multi-survey blended approach to developing market benchmark ranges.

Katz, Sapper & Miller’s Lisa Curry, the current president of the Indiana MGMA chapter, said, “Although we’ve been told there should not be a direct effect on the MGMA survey, it’s hard to think that there won’t be some disruption to the collection of data from states that have disaffiliated.”

In contrast, Owen Kemp from MGMA suggests, “We actually don’t anticipate much change. The state groups that did separate are now under an association affiliated with a management group, and they will not have accreditation or benchmarking data as part of their offerings, so we anticipate those groups will still have a need for MGMA benchmarking data and participation. Additionally, we have reestablished chapters in each of those states with some strong early growth.”

According to MGMA, each state experiencing disaffiliation now has a new MGMA affiliate, and that includes previous members of those state chapters. Also, survey participation is not dependent on the state affiliate. While states are asked to promote survey participation, MGMA does a large amount of promotion themselves both to previous participants and also to new participants.

In addition to the potential upheaval being experienced by MGMA, some other survey organizations are no longer making their provider surveys available for purchase by certain valuation firms. This appears to be motivated by a conflict of interest whereby the survey organization also has a consulting practice.

Other survey organizations have been raising their pricing for provider surveys as much as 100% year over year for certain valuation firms. This, too, appears to be motivated by a conflict of interest as both a survey organization and a consulting practice.

Disruption breeds opportunity. It may mean an opportunity for new surveys to be created (perhaps by the American Association of Provider Compensation Professionals or HLA). It may mean a gradual shift to another published survey to set contract terms. It certainly will mean continued evolution in the valuation process to consider more than just the published datasets.

Chalk it up to another goalpost being moved in the arena of provider compensation.

Need help navigating the changing landscape of provider compensation? Contact your KSM advisor or complete this form.

Brad Reay Director, Healthcare Consulting

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