Healthcare Compensation by CRI

Healthcare Compensation & Benefit Issues

Compensation Resources, Inc. has extensive experience working with a wide variety of healthcare organizations to develop and implement creative and highly effective Total Reward solutions to meet their ever more complex and demanding environment, for over twenty-five years.

There are a few common denominators among healthcare organizations. These include the growing need for, and yet apparent shortage of qualified and available professional staff within the labor market, the increasing administrative burden caused by continually expanding federal and state regulations, and the growing pressure affecting available funds to acquire the newest technology and pay the skilled personnel necessary to operate it.

Among the differences, are the make up of not-for-profit and for-profit healthcare providers and organizations, each of which is covered by similar, as well as different and competing regulations. We believe that each client is different and, therefore, our approach to each assignment must address the specific and unique characteristics of the organization with whom we are working. A major strength of our firm is our ability to fully recognize these differences and deliver customized solutions that are within the client's capacity to implement and monitor the programs, rather than theoretical approaches that only look good on paper. Our role is to not only develop the most appropriate solutions to meet each client’s specific needs, but to also provide the assistance to successfully introduce the new program, and to provide the necessary follow-up to make sure it continues to serve their needs over time.

An important aspect of our capabilities is our knowledge of the multitude of often competing regulations covering various healthcare providers.

For Not-for-Profit organizations, these include:

Intermediate Sanctions Regulations (IRC Section 4958)
Private Inurement Regulations (IRC Section 4941)
Non Qualified Deferred Compensation Rules (IRC Section 409A, 457(b) and 457 (f))
Stark Regulations
Joint Counsel Accreditation
State and Federal Healthcare Regulations

For For-Profit organizations, these include:

Sarbanes Oxley Act
Non Qualified Deferred Compensation Rules (IRC Section 409A)
SEC and related exchanges
Stark Regulations
Joint Counsel Accreditation
State and Federal Healthcare Regulations

The following are some examples of compensation consulting assignments that we have successfully worked on in the healthcare industry:

Situation 1: The executive compensation arrangements for a large NFP were made without any Board involvement.

Solution: Working with their external financial and legal counsel, CRI conducted an analysis to determine the competitive market for the senior management positions, recommended appropriate decision-making procedures for use by the outside advisors to use while they identified appropriate independent board members, and prepared the necessary documentation consistent with the Rebuttal Presumption requirements.

Situation 2: Large homecare agency had significant difficulty in staffing to meet its needs, and was therefore paying excessive amounts to commuters, plus on-call pay and overtime.

Solution: Using the results of a custom survey to accurately identify the market for homecare, infusion and hospice staff, we developed a multi-part solution which included increasing hourly rates and creating a “market basket” consisting of various pay components for alternative shifts, weekend and holiday schedules. The end result was a significant reduction in OT, reduced turnover, and much better coverage, consistent with their homebound patients’ needs. Interestingly, we also recommended that they experiment with routing software which helped to improve the scheduling of visits, and thereby reduce driving times.

Situation 3: A large multi-campus medical center was undertaking a $700mm plus construction of a new hospital, and was concerned about the financial risks involved if it could not be completed on time and within budget, since a facility that is not open cannot generate revenue, even though the debt must be serviced.

Solution: We developed a long-term incentive plan tied to the completion of the new facility. The plan, covering eight (8) years, focused the management team on keeping the project “on time and under budget”, acted as a strong retention tool, and enhanced the organization’s ability to recruit additional management.

Combining our commitment to provide pragmatic solutions for our Healthcare clients with a dedication to quality, CRI has earned a reputation for providing sound business advice along with creativity, resourcefulness and professional accountability to our clients’ Boards and Compensation Committees.

We recognize that regulations, restrictions and demands placed on the Healthcare industry continues to grow, and part of our responsibility is to provide clear, practical and frequent communication on how these changes will impact our clients and their programs. Listening to our clients is a fundamental operating philosophy of our professional team, which has contributed greatly to the high level of program success.

Compensation is a philosophy, a strategy and a solution. We invite you to explore with us the benefits of creative compensation as a vital business tool. Please feel free to give me or other members of our team a call so we can discuss your issues, and how CRI may be of assistance.

Paul R. Dorf, APD, Managing Director, 201-934-0505 x 111