In healthcare partnerships, compensation is often treated as a contract term. It's negotiated, signed, and filed away.
But in day-to-day operations, compensation functions like an operating signal and it tells the clinical team what the organization actually values, regardless of what the mission statement says.
This is a structural stress point in MSO partnerships which is the shift from profit-based to production-based incentives.
When a physician transitions from an owner model (where income is tied to the practice’s net profit) to a platform model (where income is tied more directly to collections, wRVUs, or productivity), the fundamental incentives change.
It's an operational reality and incentives act like gravity. If you change the math of how physicians earn a living, you predictably change how they manage time, schedules, staffing needs, and patient flow.
In a compliant MSO model, compensation structures should avoid being tied to referrals and be created carefully when tied to productivity or volume. The issue is not productivity itself, but whether incentives are structured in a way that creates improper pressure, compliance risk, or quality drift.
The Predictable Response to Production Models
In many MSO transactions, physician compensation shifts from “bottom-line” economics to “top-line” economics.
Owner Model (Bottom Line): "I keep what's left." This encourages efficiency, cost control, and managing overhead.
Platform Model (Top Line): "I eat what I kill." This encourages volume, intensity, and output.
That shift creates immediate time compression.
If income is now tightly tied to volume, the rational response for any high-performing physician is to increase output. Without structural checks, that pressure eventually alters clinical behavior:
Shorter Visit Times: Trying to fit the same clinical work into 10 minutes instead of 15.
Documentation Sensitivity: A heightened focus on coding complexity to maximize wRVUs, which can trigger compliance audits if not managed correctly.
Supervision Stretch: The temptation to oversee more mid-level providers than is operationally sustainable in order to capture "incident-to" revenue.
This is often driven by a system that rewards volume more than it rewards stability.
The “Growth Assumption” Gap
A common friction point in Year 1 is the gap between the financial model and clinical reality.
Many compensation models are built on a “growth assumption” which is the idea that with MSO marketing and operational support, the physician’s volume will immediately grow by 10–20% to offset any reduction in base draw or overhead allocation.
The logic is: "You'll make the same money, you just have to see 2 more patients a day."
In practice, this rarely happens in Month 1.
Operational friction which is learning a new EMR, waiting on payer credentialing for new locations, or training new support staff, often causes individual productivity to dip in the first 6 months before it grows. This is the "Integration J-Curve."
If the compensation model doesn’t account for that transition dip, the physician takes a pay cut at the exact moment their integration workload is highest, which creates predictable tension.
A durable model uses a transition bridge, an income floor or a guaranteed ramp period, so the platform’s own integration friction doesn’t land directly on the physician’s paycheck.
Designing Guardrails, Not Just Targets
To prevent a volume treadmill, compensation models need operational guardrails, standards that sit outside the productivity formula.
A durable partnership defines these explicitly to protect the physician from their own incentive structure.
1. Schedule Template Integrity
Appointment length should be driven by clinical need, not income targets.
The Risk: Without a floor, the default answer to revenue pressure is "double-book the 10:00 AM slot."
The Guardrail: Minimum durations for defined visit types (new patient, post-op, complex consult) that cannot be compressed below a safety threshold simply to add volume.
2. Supervision Ratios
When models rely on NPs or PAs, there's a natural incentive to maximize physician-to-provider ratios.
The Risk: If a physician is signing off on charts they haven't reviewed just to clear a queue, that's a licensure risk, not a productivity win.
The Guardrail: Supervision ratios set by safety and specialty norms, not just legal minimums, so supervision remains real, not theoretical.
3. Staffing Ratios
If output increases, the support system needs to scale with it.
The Risk: A high-volume provider paired with a low-volume support team is a recipe for burnout, not EBITDA.
The Guardrail: Staffing levels tied to volume tiers, so increased demand automatically triggers additional support rather than silent overload.
4. Quality and Compliance Cadence
High-production environments can increase documentation risk if there isn’t a consistent process.
The Guardrail: A predictable, non-punitive audit cadence that protects both physicians and the platform by catching coding issues early and keeping standards consistent.
“Document It”: What Should Be Clear Before Signing
Ambiguity in compensation creates anxiety. Before signing, physicians should understand, and see in writing, how the model behaves under stress.
Common items to clarify:
Adjustment Logic: If reimbursement rates drop, does physician comp drop immediately, or is there a buffer? If the MSO negotiates better payer rates, does the physician share in that upside?
Non-clinical Duties: Chart review, mentorship, training, committee work, and leadership responsibilities take time away from production. These should be acknowledged (and ideally stipended) so they don’t become unpaid obligations.
A Safety Brake: A documented mechanism to slow volume increases if quality indicators or patient experience scores begin to trend the wrong way.
Incentives Beat Slogans
You can talk about “patient-centered culture” every day, but if the compensation grid only rewards speed, you'll get speed.
The goal of a well-structured MSO partnership is simple: doing the right thing for the patient should not financially punish the physician.
When guardrails are explicit, physicians can focus on care and productivity without worrying that the structure is quietly pushing them toward compromise.
How Verdira Approaches This
Clinical decisions remain with physicians.
MSO scope is clearly defined in writing and tied to real services.
Governance is clarified before signing so expectations remain stable after close.
We build long-duration platforms and do not operate on forced exits.
If you’re evaluating an MSO partnership or successor role and want to sanity-check structure and expectations, we’re open to thoughtful conversations.
This article is for general educational purposes and is not legal advice.
