Telemedicine Clinic: "Getting compensation right"

This case examines the strategic and organizational challenges faced by Telemedicine Clinic (TMC), one of Europe’s leading providers of teleradiology services. Founded in Barcelona, TMC delivers remote diagnostic radiology reporting to hospitals across multiple European countries, addressing critical shortages of specialized radiologists and enabling access to high-quality diagnostic expertise at scale.

After surviving a near-fatal crisis caused by the unexpected cancellation of major UK contracts, TMC entered a new phase of rapid growth. Ironically, the company’s main challenge shifted from excess capacity to a shortage of radiologists needed to meet rising demand. At the heart of the case lies TMC’s distinctive compensation system: a purely variable, piece-rate model that pays all radiologists equally per reported exam, regardless of seniority, reputation, or specialization. Designed to promote fairness, collaboration, and continuous learning—reinforced by a unique peer-review system—the model stands in sharp contrast to traditional hospital employment structures.

As growth accelerates, however, tensions emerge. Some physicians argue that the system incentivizes speed over quality, potentially undermining clinical excellence and exposing the firm to medical liability. Others demand higher pay for rare subspecialties, greater income stability through fixed salaries, or compensation for non-reporting contributions such as mentoring and process improvement. Meanwhile, TMC’s finance leadership warns that introducing fixed salaries could expose the company to substantial financial risk due to volatile client demand.

The case places participants in the role of CEO Alexander Böhmcker as he prepares for a critical management meeting. Participants must grapple with fundamental trade-offs between fairness and differentiation, quality and productivity, flexibility and risk-sharing. The case is well suited for courses in compensation, organizational design, healthcare strategy, and scaling professional service firms, offering rich material for discussion on incentives, culture, and sustainable growth in knowledge-intensive organizations.