Built to Scale: The Physician Compensation Governance System a Growing Health System Needed

A large regional health system had grown significantly over a short period. What had once been a manageable physician compensation process was producing inconsistent outcomes across specialties and creating friction at every stage of the contracting cycle. Compensation model updates were triggered by individual physician requests rather than proactive market reviews. Proposals moved through multiple layers of review with no clear decision maker. Small changes to contract terms required restarting the entire proposal approval process.

The decentralized, reactive nature of the process was slowing physician recruitment, creating inequities across the enterprise, and exposing the organization to growing compliance risk. Leadership knew the system needed to change. What they needed was a way to get there without disrupting the physician relationships the organization depended on.

What Made This Challenging

• Stakeholder interviews surfaced three distinct, interconnected problems: a reactive process, inconsistent governance, and a lack of organizational structure. Each required a separate intervention, and all three needed to be solved together.
• The existing four-step contracting process had no physician voice built into the early stages, meaning structural compensation decisions were being made without clinical or operational input and surfacing concerns too late to address efficiently.
• Rapid growth meant the organization was onboarding new specialties and service lines faster than the compensation infrastructure could keep pace, creating a growing backlog of arrangements in need of market review.
• A standardized governance model had to be flexible enough to accommodate specialty-specific variation without creating new inconsistencies across a large, multi-specialty enterprise.

Acuvance Coker conducted a comprehensive landscape review and delivered a governance redesign package: a documented compensation philosophy, a formal compensation committee structure, a proactive biannual review cadence, and a revised five-step contracting process with physician voice built in from the start.

What Set This Engagement Apart

The engagement was designed not just to diagnose the problem but to produce a governance infrastructure that the organization could use. That meant going beyond a findings report. Acuvance Coker delivered a compensation philosophy document, a compensation committee charter, a standardized SBAR format for all future compensation proposals, a specialty-by-specialty review schedule covering three years of planned updates, and a first Compensation Committee meeting agenda ready to run on day one.

The market analysis component went equally deep. Rather than relying on a single survey, our team triangulated across three national benchmarks and supplemented with direct market intelligence from local job postings and competitor compensation structures. This gave leadership a grounded, defensible picture of where their compensation stood relative to the market and where competitive pressure was already building.

For the Emergency Medicine specialty, that analysis was particularly consequential. The health system's physicians were producing at significantly above-median wRVU levels, which meant their total compensation, once productivity incentives were factored in, placed them in a competitive range despite a below-median base. That nuance, the difference between structural position and total economic outcome, is exactly the kind of intelligence that supports strategic compensation decisions rather than reactive ones.