Department chief roles more clinical in nature.

Department Chief Roles More Clinical in Nature

Earlier this year, the American College of Physician Executives, in collaboration with the Physician Executive Management Center, the recruitment and career counseling affiliate of the College, surveyed the College membership in group practices and managed care organizations. The Management Center was asked to coordinate the project because of its experience with physician executive compensation surveys. A small number of such organizations outside the College membership was also polled. Physician executives in all these organizations were asked about the duties of clinical department heads and about the compensation packages of the physicians that the organizations hired in these management roles. The survey also asked for information about the marketplace for physician practitioners in these groups. This article reports only on the director portion of the survey.

A primary responsibility of physician executives in group practice and managed care organizations is the recruitment and retention of medical staff members. Key to this charge is the availability of adequate information on competitive compensation packages for physicians. Because of the dearth of information on this subject, the College and the Management Center decided early in 1989 to poll key elements of the College membership on compensation levels for practitioners and other health care professionals in these two types of organizations. The survey also garnered information on the compensation and responsibilities of department directors in these organizations. Both salary and bonuses and other incentives were measured by the survey. The survey form was mailed to 1,400 physician executives, and a response of about 25 percent was achieved. This article reports the survey findings for clinical department directors. Details on these findings, as well as complete results for practitioners and other professionals, are contained in the full report of the survey.

How Directors Are Chosen

It would appear that departmental leadership is primarily a task assigned by the overall leadership of the organizations. In 69 percent of responses, directors were appointed to leadership positions. As would be expected, a higher percentage of appointed directors were compensated by the organization for their management duties than those elected to the positions. The implication is that the duties of department directors can no longer be left to those physicians who are more senior or who have desirable traits that are not related to management. Rather, these physician directors are expected to be effective managers of the affairs of their departments. In those organizations with no compensation for department directors, a larger percentage of directors are elected, presumably with less emphasis on their impact on management. Seniority was the basis for selection of 6.5 percent of the directors. This technique may result in valid choices of directors, but the criterion is outdated unless other factors are considered before a decision is made. Alternately, perhaps the structure and management of the organizations are such that sufficient general leadership and systems exist, with a minimal need for operational department chiefs.

Why Those Chosen Accept

In 83 percent of the survey responses, the common response was that physicians accepted these positions because their responsibilities are seen as good training for management. Departmental management duties may be seen as an initiation into the administrative side of medicine. We can project that department director positions are excellent opportunities to combine the needs of organizations for management with the needs of physician executives for "laboratories for growth."

Duty and honor were frequently cited as contributing factors in the decisions by physicians to accept directorship positions. It was not clear whether these philosophical rationales were related to perceived obligations to the organization, to the medical staff, or to specialty colleagues. In any event, 44 percent of the respondents feel that either duty or honor was an important reason for accepting these management roles in their organizations.

Compensation was cited as a reason for entering management by half of the respondents (for those in organizations in which compensation was provided). However, compensation virtually never stood alone as a reason for accepting a directorship, which suggests that it alone is not sufficient to induce physicians to serve in management positions.

Duties of Directors

Directors are charged with line management within their departments, as evidenced by an 84 percent response indicating that the director is responsible for supervising other department practitioners. However, supervision of other department employees occurs in only 40 percent of the organizations. The directors are used as controllers for the professional staff in the majority of situations, but leave the supervision of nonphysician professional and support staff to a non-physician manager.

A major function of directors is the maintenance and operation of quality assurance programs. The director is therefore expected to supervise of the professional staff in its provision of services both from a logistics as well as from a quality of care viewpoint. Additional duties reported in over 50 percent of responses included recruitment (of other practitioners) and budgeting for the department.

What Directors Are Paid

The average compensation of department directors was $21,105, with a disparate range of $5,000 to $59,000. This indicates that the reporting organizations have only part-time directors. The amounts they are paid for their management responsibilities vary significantly enough to conclude that there is no "standard" compensation structure for department directors. Rather, each situation is evaluated independently and on the basis of local conditions. Assuming that department chairmen are expected to devote at least 25 percent of their time to management duties within the departments, compensation apparently is not closely related to specialty. Otherwise, we would have seen a much higher average as a result of surgical specialties data.

Summary

Because this is the first survey conducted on the subject of compensation of department directors in group practices and managed care organizations, trend comparisons are not possible. However, future surveys will add this important ingredient. Also, hospitals were not included in the scope of this survey. A separate survey of hospital-based members of the College was conducted in mid-1989. An article on the department chief component of that survey will appear in an upcoming issue of Physician Executive.

David Kirschman is President of the Physician Executive Management Center, Tampa, Fla. A full report on the findings of the physician practitioner compensation survey data is available from the Physician Executive Management Center for $50 ($150 for nonmembers).