Knowledge Center

Increased Roles in Physician Leadership

In 2014, Integrated Healthcare Strategies (Gallagher Integrated), a division of Gallagher Benefits Services Inc., noted in this newsletter that our firm was seeing a significant increase in blended clinical and administrative leadership roles for physicians.  This trend has continued, and we have followed it through the administration of our Medical Director and Physician Executive Survey that began in 2014. 

In this survey, we defined a Physician Executive as:

A physician who spends more than 40% of his/her time in this administrative/leadership role and whose responsibilities are similar to other executive level roles in which the individual is providing strategic direction and oversight for the service line/department.

Based on the results of the 2015 Gallagher Integrated Medical Director and Physician Executive Survey, we noted several developments related to physician executive positions.  First, in 2015, we were able to report data for more types of positions than in 2014.  This is consistent with the proliferation of service line level physician executives at our clients.  The following positions were reported in the 2015 report (new positions are indicated by an asterisk):

  • Chief Medical Information Officer*
  • Chief Medical Officer
  • Chief Quality Officer
  • EVP/SVP/VP Medical Affairs
  • Physician Executive, ACO/Medical Home*
  • Physician Executive, Cancer Center
  • Physician Executive, Cardiac Services
  • Physician Executive, Clinical Integration/Business Development*
  • Physician Executive, Neurosciences*
  • Physician Executive, Orthopedics*
  • Physician Executive, Pediatrics*
  • Physician Executive, Surgery*
  • Physician Network CEO
  • Physician Network Regional Executive

We also noted that while the median percentage of time allocated to the executive role remained at or near 100% for Chief Medical Officer and Chief Quality Officer, the median allocation of time between clinical and executive roles for the service line physician executives was more varied:

Physician Executive Service Line

% FTE Executive

% FTE Clinical

Cancer Center

80%

20%

Cardiac Services

70%

30%

Neurosciences

60%

40%

Orthopedics

60%

40%

Pediatrics

80%

20%

Surgery

70%

30%

 

This is significant when analyzing the compensation for these roles as there is no “norm” across all such positions, and each position needs to be analyzed separately based on its specific characteristics. 

The level and type of incentive plan participation also varies across physician executive roles.  In general, we noted the following:

  • 53.9% of the reported Physician Executives were eligible for an executive level incentive plan, up from 38.8% in the 2014 survey.  33.9% are eligible for a non-executive level incentive plan, up from 20.9% in 2014
  • 25.6% of reported Physician Executives were also eligible for additional clinical incentives
  • Of the Physician Executives that earned an incentive bonus, the average payout rate was approximately 70.2% of the maximum incentive opportunity, which is similar to the 71.0% noted in 2014

This additional compensation opportunity is significant in that it needs to be added into the total compensation valuations.

We continue to believe that compensation for these types of positions will come under increased scrutiny by regulators.  While the 2015 Gallagher Integrated Medical Director and Physician Executive Survey provides some data for such “combined” roles, we continue to recommend a third party review of compensation for physician executives. 

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Cathy Kibbe is a Principal Consultant in the Physician Services Practice of Integrated Healthcare Strategies, a division of Gallagher Benefit Services, Inc.  Her clients range in size from rural community access hospitals to multi-state health care systems.  Areas of focus include compensation audits, the design and administration of new compensation systems, incentive compensation design, and physician opinion surveys.

She has over 25 years of experience working with physician groups and hospitals in both a consulting capacity ...

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