Are your economic incentives self-defeating?

In a prior column (Long, H., "Group Practices May Ignore Economic Realities: Commingling of Rents and Returns," Physician Executive 14(5):33-35, Sept.-Oct. 1988), the author discussed the tendency of many group practices to ignore ordinary business economics. The examples discussed in that column was the inappropriate commingling of rents and returns from the various factors of production in medical practice. A frequent result of this is physicians who also have ownership interests and/or managerial responsibilities having an inflated perception of their worth as physicians because they are undercompensated for their ownership/management roles. In this column, the author addresses the inadvertent structuring of physician remuneration via income distribution or externally negotiated formulas that reward individual behavior that actually threatens the economic viability of the group.