A large metropolitan hospital and medical center retained A&M to help design and implement compensation and benefit structure that would attract world class physicians and senior staff. The hospital has several thousand physicians and senior management and maintains a number of locations.
Consolidation of local hospitals into larger regional medical centers has led to fierce competition for top physicians. Our client had found that attracting groups of doctors and integrating them into the hospital’s business model is a daunting and costly effort.
A&M developed a comprehensive interactive analytical financial model (“IAFM”) that includes detailed compensation and benefit program data. The IAFM allows management to analyze alternative proposals and programs and the structural and financial impact on the hospital as well as each individual employee.
Our solution included:
- We helped the hospital implement a unique, tailored new program that allows participants to build value in a tax-advantaged vehicle owned by each individual. The hospital decides who is eligible to participate and at what level. The hospital also decides, on an annual basis. How much to contribute for specific individuals.
- This program, which we call A&M Prime™, is only available through an employer sponsored program and uses a combination of institutionally priced, custom tailored indexed universal life insurance arrangement, and tailored third-party financing.
- The IAFM gave the hospital greater insight into the impact of compensation and incentive decisions. More informed cost-benefit analyses are possible when changes to benefit programs are being contemplated.
- The IAFM gives the hospital interactive, real-time access to physical and senior staff compensation and benefits data, which allows for informed decision making about compensation and annual incentive awards. Recruiting is more effective as a result of improved compensation and benefits knowledge base.
- The hospital has a unique and valuable program, A&M Prime™, to offer when recruiting potential physicians and key management.
- A&M Prime™ has become and effective retention tool. Participants realize that the hospital’s financial support of an individual’s participation in the program ceases on termination of employment.
- These changes have had minimal negative financial impact on the hospital.