From medical directors to department chairs and vice presidents of medical affairs, physicians who have leadership roles within hospitals are being asked to do more, and their levels of compensation are rising along with those demands, say executive and physician compensation experts.
Part of this trend is driven by community hospitals and systems increasingly linking up with academic institutions, says Steve Rice, the executive vice president and practice leader of Integrated Healthcare Strategies' Physician Services practice. Healthcare reform is likely to accelerate this trend as more organizations adopt more fully integrated models such as accountable care organizations, he says.
"I think we're going to see some jumps right now, but I think we're going to see some pretty major movement in the department chair area over the next three to five years, and I think what's going to drive that is many community-based health systems that want to have that academic affiliation and have someone as a department chair with both clinical and academic appointments," he says.
Evolving responsibilities
Department chair roles are becoming more fully developed and time-consuming than in the past, incorporating the financial aspects of the department, physician recruitment, coordination with academic medical centers, quality and marketing roles, Mr. Rice says. "I just think these roles, in particular the roles of the chairs of departments, are going to explode [from a compensation perspective]," he says.
Kim Mobley, principal at compensation consulting firm Sullivan, Cotter and Associates, makes a distinction between the roles of department chairs, who might oversee a broader medical area, and the medical director/chief of a narrower specialty.
Compensation for these roles currently varies widely by specialty, Ms. Mobley says, but she suggests compensation may shift somewhat over time to correlate more with an organization's size as these positions become more strategically focused for hospitals.
"These people can really help drive your business," she says. "You want to make sure you get the right person into that role and responsibility. It's not always your best surgeon or your best internist. It's somebody who has an understanding of how to pull all the pieces together, of working within the organization to really understand what the strategic objectives of the organization are. Those are unique people."
Where historically department chairs spent half of their time in private practice, today it is much more common for chairs to spend most of their time committed to their work with the hospital, perhaps taking one day a week to see patients to keep up their clinical skills, Mr. Rice says. "I think that's the trend; there is more pressure put on these physicians to have pretty significant time commitments," he says.
In the vice president of medical affairs role, the physician leader oversees the medical staff. VPMAs typically are very seasoned physicians from within the community, Mr. Rice says. They must juggle their internal role — being a liaison with the medical staff and dealing with staff privileging and other medical affairs issues — with external roles within their hospital's community.
Jim Nelson, managing principal at SullivanCotter, says the vice president of medical affairs is typically included in an organization's top executive ranks for compensation purposes. As healthcare reform and other trends lead to more value-based compensation, VPMAs will need to be more sophisticated in their dealings with the medical staff and hospital and system boards. "They will be focusing on process improvement, efficiency and improving quality outcomes," he says. Also, as consolidation increases within the industry, they will be asked to oversee physician employment arrangements, integration of new physicians into their organizations and the creation of new partnership models with medical groups.
No more soft landing
In the past, chief medical officer and VPMA roles were sometimes viewed as a landing place for physicians who were nearing retirement age and wanted to transition out of private practice, Mr. Nelson says. That is no longer the case. The complexity of the job now requires these physicians to have a much more business-oriented skill set. Hospitals are responding by investing more in improving their physicians' leadership, business and communication skills, he says.
"In the past, maybe some of these were more titular than operational," Mr. Rice says. "Now what's happening is the organizations are saying we want this to be an active part of what we're doing from a health system delivery standpoint. We want you to do these things, and we're going to pay you for them, but the requirement is you're going to have to do certain things and put in a certain amount of time to get the payment." Physicians have driven some of this change as well, pushing for on-call pay and other compensation for their time, he says.
Dollars and cents
When trying to figure out an appropriate compensation level for these positions, hospitals should first consider the time commitment and duties that will be required of the physician, which is what drives the valuation amount, according to Mr. Rice.
For productive physicians, a hospital might need to offer an amount in the 75th percentile of comparable organizations for the physician to want to make the change in practice that would be necessary to take on these hospital roles, Mr. Rice says. Still, Ms. Mobley notes, physicians are not likely to take on a hospital leadership role for the compensation alone, given that they can likely earn as much or more in full-time practice. "It's a career choice, not an economic choice," she says.
Mr. Rice says hospitals need to have a firm idea of what they want their physician leaders to help them achieve. "Instead of starting with the compensation, hospitals need to start by deciding what they want from the position, and identify real, specific duties, responsibilities, outcomes and around that structure how that position is going to function, including if you're going to include at-risk components," he says. "Before you start with the money, start with what you want and how it relates to what you're trying to accomplish as an organization."
See statistics on median compensation for vice presidents of medical affairs.
See statistics on average compensation for department chairs at academic medical centers.
Part of this trend is driven by community hospitals and systems increasingly linking up with academic institutions, says Steve Rice, the executive vice president and practice leader of Integrated Healthcare Strategies' Physician Services practice. Healthcare reform is likely to accelerate this trend as more organizations adopt more fully integrated models such as accountable care organizations, he says.
"I think we're going to see some jumps right now, but I think we're going to see some pretty major movement in the department chair area over the next three to five years, and I think what's going to drive that is many community-based health systems that want to have that academic affiliation and have someone as a department chair with both clinical and academic appointments," he says.
Evolving responsibilities
Department chair roles are becoming more fully developed and time-consuming than in the past, incorporating the financial aspects of the department, physician recruitment, coordination with academic medical centers, quality and marketing roles, Mr. Rice says. "I just think these roles, in particular the roles of the chairs of departments, are going to explode [from a compensation perspective]," he says.
Kim Mobley, principal at compensation consulting firm Sullivan, Cotter and Associates, makes a distinction between the roles of department chairs, who might oversee a broader medical area, and the medical director/chief of a narrower specialty.
Compensation for these roles currently varies widely by specialty, Ms. Mobley says, but she suggests compensation may shift somewhat over time to correlate more with an organization's size as these positions become more strategically focused for hospitals.
"These people can really help drive your business," she says. "You want to make sure you get the right person into that role and responsibility. It's not always your best surgeon or your best internist. It's somebody who has an understanding of how to pull all the pieces together, of working within the organization to really understand what the strategic objectives of the organization are. Those are unique people."
Where historically department chairs spent half of their time in private practice, today it is much more common for chairs to spend most of their time committed to their work with the hospital, perhaps taking one day a week to see patients to keep up their clinical skills, Mr. Rice says. "I think that's the trend; there is more pressure put on these physicians to have pretty significant time commitments," he says.
In the vice president of medical affairs role, the physician leader oversees the medical staff. VPMAs typically are very seasoned physicians from within the community, Mr. Rice says. They must juggle their internal role — being a liaison with the medical staff and dealing with staff privileging and other medical affairs issues — with external roles within their hospital's community.
Jim Nelson, managing principal at SullivanCotter, says the vice president of medical affairs is typically included in an organization's top executive ranks for compensation purposes. As healthcare reform and other trends lead to more value-based compensation, VPMAs will need to be more sophisticated in their dealings with the medical staff and hospital and system boards. "They will be focusing on process improvement, efficiency and improving quality outcomes," he says. Also, as consolidation increases within the industry, they will be asked to oversee physician employment arrangements, integration of new physicians into their organizations and the creation of new partnership models with medical groups.
No more soft landing
In the past, chief medical officer and VPMA roles were sometimes viewed as a landing place for physicians who were nearing retirement age and wanted to transition out of private practice, Mr. Nelson says. That is no longer the case. The complexity of the job now requires these physicians to have a much more business-oriented skill set. Hospitals are responding by investing more in improving their physicians' leadership, business and communication skills, he says.
"In the past, maybe some of these were more titular than operational," Mr. Rice says. "Now what's happening is the organizations are saying we want this to be an active part of what we're doing from a health system delivery standpoint. We want you to do these things, and we're going to pay you for them, but the requirement is you're going to have to do certain things and put in a certain amount of time to get the payment." Physicians have driven some of this change as well, pushing for on-call pay and other compensation for their time, he says.
Dollars and cents
When trying to figure out an appropriate compensation level for these positions, hospitals should first consider the time commitment and duties that will be required of the physician, which is what drives the valuation amount, according to Mr. Rice.
For productive physicians, a hospital might need to offer an amount in the 75th percentile of comparable organizations for the physician to want to make the change in practice that would be necessary to take on these hospital roles, Mr. Rice says. Still, Ms. Mobley notes, physicians are not likely to take on a hospital leadership role for the compensation alone, given that they can likely earn as much or more in full-time practice. "It's a career choice, not an economic choice," she says.
Mr. Rice says hospitals need to have a firm idea of what they want their physician leaders to help them achieve. "Instead of starting with the compensation, hospitals need to start by deciding what they want from the position, and identify real, specific duties, responsibilities, outcomes and around that structure how that position is going to function, including if you're going to include at-risk components," he says. "Before you start with the money, start with what you want and how it relates to what you're trying to accomplish as an organization."
See statistics on median compensation for vice presidents of medical affairs.
See statistics on average compensation for department chairs at academic medical centers.