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Board Leadership Series: Physician Compensation

This video discusses the importance of board engagement in the physician-driven activities within its organization and provides practical approaches and methods for engagement with management (and physicians). Board members and senior leaders will gain a better understanding of How physicians can drive strategy, How to govern the risk associated with physician contracts, and The importance of ‘leaning-in’ on the numbers related to provider arrangements.

This video will give you a better understanding of:

  • How physicians can drive strategy
  • How to govern the risk associated with physician contracts
  • The importance of ‘leaning in’ on the numbers related to provider arrangements.

Video Presenters

Randolph A. Biernat, CPA, ABV | Partner/Consulting | FORVIS

Randy is a member of the Healthcare Practice and has a leadership role in the firm’s Physician Services Center of Excellence. He is responsible for leading a variety of healthcare projects, including transactional and compliance consulting, the development of hospital/physician alignment strategies, and assisting healthcare entities with reform issues related to physician relationships. His background technical expertise relates to analyzing the fair market value of compensation for goods and services in the healthcare regulatory environment. He also has experience in analyzing and opining on executive compensation for a variety of industries. Randy routinely performs technical research and writing with respect to emerging issues related to healthcare transactions, including regulatory issues. Prior to joining FORVIS, he gained an extensive background that included providing hundreds of fair market value analyses and business valuations. In addition, he led numerous hospital/physician alignment consulting engagements related to compensation plan design, physician integration processes and strategy, on-call programs, physician-led management arrangements, and others. Randy’s professional credentials include the Accredited in Business Valuation designation through the American Institute of CPAs.

Joann Emge | CEO | Sparta Community Hospital | Sparta, IL

Joann Emge grew up on a farm in Marissa and had a dream of becoming a nurse. After graduation from nursing school in 1976, Joann joined the nursing staff at Sparta Community Hospital District on April 25, 1977. In August of 1981, Joann was promoted to Assistant Nursing Supervisor and later became the ER/Occupational Health Coordinator in July of 1989. During that time, she returned to school and obtained her Bachelor of Science in Nursing Degree in December of 1989. In 1997, Joann wa promoted to Chief Executive Officer (CEO). In the almost 25 years as CEO, Joann has led the organization through many accomplishments, including the Critical Access Hospital (CAH) conversion, the establishment of seven physician clinics, including five Rural Health Clinics, expansion of home health services, and recognition as a top 20 Critical Access Hospital by the National Rural Health Association, to name a few.

Reflection and Discussion Questions

  1. How familiar are you with the depth and breadth of the employed medical staff? The full medical staff? Does this extend both professionally and personally? Consider attending a medical staff meeting to observe.
  2. How familiar are you with the stark law and anti-kickback statute (as applies to physician arrangements? Is the concept of fair market value in a regulatory sense well developed and conversational?
  3. Does the organization have an enterprise risk assessment completed routinely? If so, where do physician arrangements rank on the typical heat map?  
  4. What is the right level of detail for the board to consider as relates to an investment in a physician contract relationship? Should it include:
    • Connection to strategy?
    • A demonstrated community need?
    • A financial proforma?
    • A fair market value analysis?
    • A plan to operationalize (provide space/staff/equipment) the investment?
    • Support of the medical staff / CMO?


  • Walkthrough a great provider hire and a not-so-great provider hire. What worked in one situation versus the other? Could a more robust process have helped prevent the not-so-great hire? Define the elements of success in recruiting. Is the “great hire” provider still highly engaged?
  • Utilize the results of the exercise above (bullet four in Reflection & Discussion Questions) to evaluate what was completed and shared with the governance body that approved/accepted the last provider hire. Would we do anything differently next time?
  • Complete a high-level benchmarking to evaluate the relationship between compensation and productivity for the employed provider group. To the extent compensation materially exceeds productivity, are there strategic community needs or other business purposes to support a disconnect between pay commensurate with work?


Office of Inspector General – Introduction to the fraud and abuse laws related to physicians (including the Stark Law and Anti-Kickback Statute)  Compliance program guidelines for Small Physician Practices Establishing fair market value physician compensation in a changing industry (


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