MANAGEMENT CONTROL SYSTEM CASE

“FAMILY CARE SPECIALISTS MEDICAL GROUP, Inc”

Group 2

 Karima Fatmawati 2017310008

 Khurrotul Aini 2017310019
 Artho Sofjan Katuhanggar 2017310333

BACHELOR OF ACCOUNTING PROGRAM

SEKOLAH TINGGI ILMU EKONOMI PERBANAS SURABAYA
YEAR OF ACADEMIC 2019/2020
 “FAMILY CARE SPECIALISTS MEDICAL GROUP, Inc”

BACKGROUND
The HRSA calculated that an additional 16,585 practitioners would be required
to adequately service this underserved population. The American Academy of
Family Physicians calculated that to meet the anticipated needs for primary care
physicians over the next decade, the United States would need to train 4,449 each
year with the goal of increasing the number of family physicians by 39% over the
next 10–15 years. However, in 2007, the number of medical students choosing
family care residency programs actually declined by 8% from the previous year
to just over 1,100.
In 2009, Los Angeles County, California claimed nearly 10.4 million residents.
In their 2008 annual report on America’s millionaires, TNS Financial Services
reported that Los Angeles County again topped the list with 261,081 households
with net worth exceeding $1 million, excluding the value of their primary
residences. The county boasted 108 licensed general acute care hospitals with a
total of more than 27,000 beds. Yet, at the same time, the HRSA database listed
over 300 of its more than 6,000 Health Professional Shortage Areas within Los
Angeles County. For physicians and other healthcare providers, the Los Angeles
area offered a wide range of communities and facilities in which to practice. The
choice of where to practice and whom to serve significantly affected
compensation.

PROBLEM
The six physicians who comprised the Board of FCS would meet to discuss the
Group’s accomplishments for 2009 and to consider, among other issues,
improvements to the compensation system. While he recognized that no scheme
could be perfect and that whatever choices the Board made would involve
tradeoff s, Dr. Samaniego knew that the scheme chosen would have real impacts
on the physicians, the Group, and, most importantly, their patients.
In the early days, FCS clinicians were paid fixed salaries. Those more recently
hired and less experienced were paid less; the experienced senior clinicians more.
However, the salary range had always been relatively narrow. A physician could
reach the upper end of the salary scale in five years with the Group. Over time
the Group’s leadership came to believe that incentives would help drive better
achievement of the FCS mission of service and benefit the Group.

SOLUTION
However, patient volume, payer mix, staffing, and productivity drove financial
results and, ultimately, what the Group could afford to pay clinicians and staff.
Even in the not-for-profit world of hospitals like WMMC, there was a popular
aphorism that without margin there is no mission, and despite the importance of
their shared mission, FCS had never been a not-for-profit enterprise.
While some clinicians now requested additional Saturday sessions and even
additional on-call shifts, only a few achieved bonus levels of average patients
seen per session on a monthly basis. Further, while the new scheme had helped
to narrow the gap between physician compensation at FCS and the local market
level, periodic departures of experienced clinicians seeking better pay or hours
and the perennial competition to recruit new physicians only highlighted the fact
that serving their target communities would never be as lucrative as treating the
average patient population in the LA area. Dr. Samaniego felt certain that the FCS
compensation scheme could be improved, but he was less certain of how to
achieve the right balance.