New York hospital corporation introduces performance related pay for 3500 physicians

BMJ 2013; 346 doi: (Published 17 January 2013) Cite this as: BMJ 2013;346:f348
  1. Miriam E Tucker
  1. 1Bethesda, Maryland

A new program in public hospitals in New York city offers physician employees bonus pay as an incentive for achieving performance measures.

The three year, $59m (£37m; €44m) performance related pay plan was announced on Saturday 12 January by the New York City Health and Hospitals Corporation, a large healthcare delivery system that runs the city’s public hospitals.

The program will apply to over 3500 physicians who are employed through contracts with the New York University School of Medicine, Mount Sinai School of Medicine, and the Physician Affiliate Group of NY, a private organization that staffs the public hospitals.

The new plan directly rewards physicians for achieving benchmarks such as improvements in primary care center coordination and in patient satisfaction, as shown in surveys. Other performance indicators include reductions in readmission rates for certain conditions, emergency room triage times, and average hospital length of stay.

The incentives were designed to dovetail with recent rule changes from the Centers for Medicare and Medicaid Services that affect reimbursement for hospitals, such as financial penalties for “excessive” readmissions and adjustments in Medicare reimbursement to be based on patient satisfaction scores.

Doctors Council SEIU, the union that represents physicians employed by New York City Health and Hospitals Corporation, is negotiating with the corporation on the specifics of the plan. In a statement the union’s president, Barry Liebowitz, said that the union “supports any measure, including performance indicators, that will improve patient care.”

However, the union is concerned about physicians being penalized for factors that are beyond their control, such as a lack of hospital beds or indigent patients who are readmitted to hospital simply because they have nowhere else to go.

“Doctors Council wants to ensure that there will be sufficient staffing of doctors, nurses, and other healthcare workers to meet the performance goals,” Dr Liebowitz said.

The union is also pushing to add to the current 13 indicators proposed by the corporation another seven that would reward physicians for activities such as counseling patients on obesity and attending meetings.

Meanwhile, the Physicians Practice 2012 physician compensation survey (, issued last week, showed that the income of a third of 1311 US physicians fell from 2011 to 2012, with nearly a fifth reporting a fall in pay of more than 10%.

Primary care physicians accounted for the bulk of those who saw their pay decline, while specialists such as obstetrician-gynecologists and radiologists earned slightly more in 2012 than in 2011. In 2012 two fifths of primary care physicians reported earning less than $150 000 a year, while just 29% of obstetrician-gynecologists and 10% of radiologists earned below that figure.

Over half (56%) of the physicians reported being employed rather than owning or co-owning their own practices, and 44% said that their practices were owned by hospitals or health systems such as the New York City Health and Hospitals Corporation.


Cite this as: BMJ 2013;346:f348