Gender compensation disparity in anesthesiology part 3
Randall Flick, MD MPH
Over the past 2 weeks we’ve had 2 PAADs on the significant gender based pay inequity that exists among anesthesiologists. Randy Flick, a former president of the Society for Pediatric Anesthesia and the Medical Director, Mayo Clinic Children's Center, sent a reader’s response on how the Mayo Clinic deals with this issue. This is of such importance and has generated so many reader responses, I asked him to expand on his original response and present it as a separate PAAD. Myron Yaster MD
PS: If you haven’t seen it, this PBS documentary: Mayo Clinic: Faith-Hope-Science is well worth the time and effort. (You may have to be a PBS member to view it) MY
https://www.pbs.org/video/the-mayo-clinic-faith-hope-science-czhdtb/
Original article
Sharonne N Hayes, John H Noseworthy, Gianrico Farrugia. A Structured Compensation Plan Results in Equitable Physician Compensation: A Single-Center Analysis. Mayo Clin Proc. 2020 Jan;95(1):35-43. PMID: 31902427
Today’s Pediatric Anesthesia Article of the Day is authored by Sharon Hayes, M.D., Mayo Clinic Director of Diversity, and Inclusion, along with our current (G.F) and former (J.N.) CEO and was derived from a 2017 survey that Mayo Clinic commissioned from an outside consulting group to assess the effectiveness of the compensation plan in achieving compensation equity across gender and race/ethnicity.
First a bit of background; Mayo Clinic has roughly 70,000 employees across five states including about 3000 physicians with annual revenues more than $14 billion. All physicians at our primary locations in Rochester, MN, Phoenix, AZ and Jacksonville, FL fall under the structured compensation plan. The plan has been in place for more than 40 years but was not put in place to ensure pay equity across gender, race or other characteristic rather was then, and remains, part of an organizational commitment to placing the needs of our patients first.
The undeniable challenge of gender-based pay inequity in medicine serves to shine a light on how compensation is determined across academic medicine. I am by no means an expert on academic compensation but during visits to children’s hospitals around the country I have made it a habit of asking the following question; how do you pay your people? The typical answer is that compensation is in part determined using an often-complex performance-based formula that accounts for clinical, educational, and academic productivity. Salaries are not typically transparent, and chiefs or chairs have significant latitude in determining individual physician salaries. I have not encountered another organization that uses as structured salary model as is described in today’s PAAD although I have no doubt there are others.
In the analysis, Hayes and colleagues use data from the consultant report to assess adherence to and individual deviation from predicted physician compensation by gender or race/ethnicity at a large academic medical center using a salary-only structured compensation model based on national benchmarks and standardized salary adjustments.
Key features of the structured compensation plan include:
1. Salary – only; no incentives of any kind are provided for productivity in clinical care, research, education, or other area.
2. Salary increments for leadership are relatively small and diminish (50%) after rotation out of leadership (All Mayo leadership roles are held on a term basis).
3. Stepwise increase in salary; physician hires are moved through 5 steps to achieve target salary within their individual specialty. Based on a variety of factors some new hires may start at a salary step greater than step one. This, however, does not impact ultimate target salary.
4. After achieving target salary incremental increases in compensation are determined by formula for each specialty (not individual) and are benchmarked against similar academic institutions.
5. Departmental or division chairs are not empowered to adjust individual compensation.
6. Non-salary compensation is standardized across the organization and increments for leadership positions are predetermined and not negotiable.
7. Income from outside activities does not impact Mayo salary and is governed by strict organizational policies applying to all physicians.
The analysis included extensive individual data on all physicians engaged in clinical care including pay, demographics, FTE, leadership roles and other many other factors that may impact salary. For each physician, modelling was used to predict salary with 95% confidence intervals based on an assumption of adherence to the formula established for the structured compensation plan. Predicted salary was then compared to actual salary for each individual physician accounting for factors such as FTE, leadership roles etc. to determine adherence to the plan and pay equity.
The analysis found that among 2845 physicians (861 women, 722 non-white) all salaries fell within the 95% confidence interval and with 96% of deviation explained by the predetermined variables within the structure (FTE, leadership etc.). No interaction with race/ethnicity or gender was found. Of note, twice as many men were found to hold compensable leadership positions and men, more often than women, (34.7% v. 20.5%) were represented among the most highly compensated specialties. Male physicians outnumber female physicians by more than 3:1.
The report highlights the potential for a structured compensation model to eliminate pay disparities based on gender or race/ethnicity. It also highlights unfinished work. Women at Mayo clinic are underrepresented as physicians, within highly compensated specialties and among leadership. Although efforts to remedy these deficiencies are ongoing much remains to be done.
Of similar importance to pay equity is the impact of a salary-only model on cost and quality. There is a large and growing body of research that makes clear that incentives impact decision-making in health care as in other fields. Incentives for clinical care drive up costs and expose patients to unnecessary care while incentives for research/academic promotion create a disincentive for patient care and collaboration. Both create internal competition between colleagues that does not serve the best interests of patients, the organization, or the profession.
This may be a discussion for another episode of the PAAD or a SPA symposium.