The Massachusetts General Orthopedic Associates

1777 Words Oct 27th, 2016 8 Pages
In 1998, the Massachusetts General Orthopedic Associates (MGOA), a specialized unit within Massachusetts General Hospital (MGH), hired Dr. Harry Rubash and Dr. James Herndon, respectively, to help to remedy the annual financial deficits, which were “financed” by dipping into endowment and borrowings from MGH. These financial deficits have been continually getting into MGOA’s mission of providing high-quality patient care, research, and teaching (Barro 3). In the immediate months after accepting their positions of leadership, both Rubash and Herndon steered the hospital into the green turning a modest profit. However, it was clear that their new initiatives wouldn’t be viable for the long term. To do so, Rubash and Herndon proposed a new physician compensation plan. This plan included a development fund tax, a bonus, in addition to periodic adjustments to a base salary based on individual physician performance in regards to how profitable the physician was for MGOA. Initial physicians’ reaction to the proposed plan varied, however, if the case study was an indication, Rubash and Herndon were determined to implement their plan.
The performance-pay compensation plan that was proposed implemented a number of aspects of the Expectancy Theory to encourage intrinsic and extrinsic motivation in order to make positive gains for both the MGOA and the MGH. There were four main aspects of the plan that had changes implemented: Physician Base Salary, Development Fund Tax, Bonus, and…
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