Patient satisfaction and physician productivity both got a big boost after The Hospital of Central Connecticut, a two-campus system based in New Britain, moved to performance-based pay for its emergency department physicians.

"One physician went from my lowest performer to one of the top three performers consistently now for the last three years," says Jeff Finkelstein, M.D., chief medical information officer and chief of emergency medicine at THOCC. "And he was totally motivated by the change in compensation."

Both campuses — New Britain General Hospital and its sister, Bradley Memorial Hospital — traditionally used a compensation plan that rewarded physicians for their tenure. Raises were based on an annual review with no objective criteria. ED patient satisfaction was below the 70th percentile.

Under the new system, all ED physicians receive the same base salary and the same opportunity to increase that by about 30 percent based on their performance. The amount of variable compensation they earn is based on productivity (75 percent) and patient satisfaction (25 percent).

But there are two twists: Any physician who fails to meet certain ED quality standards in a given quarter gets a formal performance improvement plan — and if the standards are not met in two consecutive quarters he or she is asked to leave. And no physician receives the patient satisfaction component of the variable pay unless all physicians in the group score at least 70th percentile on the quarterly patient satisfaction survey.

There is little danger of that because the physicians' productivity and patient satisfaction goals reinforce one another, says Claudio Capone, director of strategic business planning for the health system. Since the compensation plan was changed five years ago, patient satisfaction has never fallen below the 80th percentile and hit the 99th percentile in two quarters.

"Productivity is probably the No. 1 reason for patient satisfaction because patients want to be seen by a doctor quickly," Finkelstein says. "The more productive your team is, the faster people are going to be seen."

Thom Mayer, M.D., CEO of BestPractices Inc., an ED management and staffing firm, says seniority still figures into the compensation plan for most of the nation's emergency physicians. But that will not be the case for much longer.

He forecasts that, within three years, 75 percent of ED physicians will be in performance-based contracts that penalize physicians who do not meet safety, quality or patient satisfaction benchmarks.

"That's what every hospital CEO and CMO has right now — why wouldn't they insist on it for their emergency department physicians?" he says.