Performance-Based Compensation in Member-Owned Firms: An Examination of Medical Group Practices
Date of this Version
Journal of Accounting and Economics
We examine the importance of agency considerations for the mix of salary and performance-based compensation in member-owned medical practices. Performance-based pay increases with the informativeness of clinical productivity measures, and declines with greater reimbursement from capitation contracts. Inexperienced physicians receive more compensation from salary, but compensation mix does not change as physicians near retirement. Larger practices and practices using outside management companies place more weight on performance-based compensation. However, when more physicians in the group practice the same specialty, less emphasis is placed on performance-based compensation. Finally, the presence of an executive partner has no influence on compensation mix.
© 2007. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
compensation, pay-for-performance, agency theory, professional service firms, health care
Ittner, C. D., Larcker, D. F., & Pizzini, M. (2007). Performance-Based Compensation in Member-Owned Firms: An Examination of Medical Group Practices. Journal of Accounting and Economics, 44 (3), 300-327. http://dx.doi.org/10.1016/j.jacceco.2007.05.001
Date Posted: 27 November 2017
This document has been peer reviewed.