Do You Need to Update Your Advance Practitioner Compensation Model?

Mohit Mahur

The increasing demands for healthcare providers in every area of practice have placed pressure on healthcare systems. Roles for RNs and midlevel providers have expanded to try to keep up with the increase in patients brought on by the retirement and aging of the baby boomers. Today, advanced practice clinicians (APCs) have stepped up to fill gaps in coverage. APCs include clinical nurse specialists, nurse practitioners, midwives, and nurse anesthetists. Since these clinical professionals are taking on increasingly important roles in healthcare, is it time for healthcare providers to rethink their compensation structure?

Compensation and the Advanced Practitioner

Primary care is increasingly dependent on advanced practitioners. These professionals can perform many of the same services as doctors provide. However, their lower cost makes them preferable to using a doctor for the same job duties. There are currently more than 234,000 licensed APCs in the U.S., and the number continues to increase.

APCs currently are compensated typically via a salary structure based on their experience, performance, and tenure with the organization. Some organizations offer a differential based on on-call, nights, weekends, and/or for the ER. Many organizations offer tuition reimbursement and bonus signing compensation for new APCs. Still, others pay for re-certification and licensure, and many provide an educational budget for conferences or professional subscriptions.

It’s rare, however, for organizations to offer compensation in the form of incentives. But that is changing. These professionals are highly in demand, which necessitates the creating of new and more effective compensation models to attract top talent.

A press release from SullivanCotter in early 2020 suggested that the demand for these midlevel professionals is driving changes in compensation. They cite three areas driving the evolution of compensation models for these professionals:

  1. The increasing need for APCs to enhance the quality of care and access under value-based models;
  2. The physician shortage driving the need for these alternative staffing models; and
  3. The rising cadre of leadership in this workforce and new care delivery models that view this area as a specialty.

SullivanCotter’s 2019 Advanced Practice Provider Compensation and Pay Practices Survey showed a 7% growth in the workforce that year. There was also a corresponding increase in base salaries of 4% that year.

Interestingly, incentives are increasingly becoming a component of the total compensation of these professionals. The report showed that 48% of the organizations surveyed offer now offer incentive pay along with compensation. In 2019 that number was on average an additional 6.9% of the base salary. Fully 32% of the organizations surveyed that year also had a team-based compensation incentive in addition to the individual amount. These incentives were often based on RVU metrics and tied to patient satisfaction scores.

SullivanCotter also suggested these roles are evolving, “as organizations develop new positions and outline key responsibilities to effectively support the management of this growing workforce.” Today, 58% of healthcare organizations have a designated APC leader and a clear structure for developing a growing workforce.

Given these changes, it might be time to adjust your APC compensation. Talk with MedSource about the trends we’re seeing. We work with APC leadership and staff and can help you with your clinical workforce challenges. Talk with our recruiting professionals today.