Hospitals moving to payment of physicians for administrative duties.

The management of hospitals seems to require more and more time and personnel. Note how many vice presidents or assistant administrators there are on the staff of your hospital. Leadership of hospital medical staffs is also requiring more and more hours and people. This commitment on the part of physicians who are leading hospital medical staffs and are significantly involved in medical staff affairs will continue to grow. Increasingly, for both physician leaders and the hospitals they serve, the question is whether these activities ought to be compensated, monetarily or otherwise.

Late in 1992, the American College of Physician Executives conducted a survey of its hospital-based members to determine their hospitals' position on this contentious issue. The questionnaire was sent to a randomly selected sample of 600 members, 195 of whom (32.5 percent) responded. Medical staff size ranged from 4 to 1,300, with the average being 271. Responses came from hospitals of all sizes, types, and locations. In the tables accompanying this article, the prevalence of monetary compensation is reported on the basis of number of hospital beds (table 1, page 45), type of hospital (table 2, page 45), and hospital location (table 3, page 45). Many of my comments on the data will also be based on responses received to open-ended questions on the rate at which physicians are paid for nonclinical duties, on nonfinancial remuneration techniques, on ties of compensation to productivity, and on funding of compensation methods.

For purposes of discussion, and simplification, I have categorized the responses as coming from members associated with small, medium, and large hospitals. I have designated small hospitals as those with fewer than 200 beds, medium those with 200-400 beds, and large those with more than 400 beds. As a result, my discussion telescopes the data presented in table 1.

Hospitals in the small category typically compensate only the medical director or vice president for medical affairs (if they have one at all) and full-time service chiefs. Full-time medical directors had compensation that was usually in line with other senior executives in the hospital, and part-time medical directors received a prorated full-time salary. In the case of service chiefs, compensation was in line with the clinical incomes for that specialty. Some respondents in that group felt that the hospital should pay for management positions. However, some felt that, if the physician represents both administration and medical staff, income should come jointly from the hospital budget and a medical staff fund. There was one respondent in this group who felt that "most nonclinical duties should not be compensated unless time involvement is extensive." He felt that most physicians expect certain duties and are happy to make a contribution.

Some respondents from the medium-sized group told us that their elected medical staff presidents were compensated between $12,000 and $18,000 annually, and, in some cases, the president-elect received half of the president's stipend. Practicing physicians spending significant time doing quality assurance or utilization management received between $50 and $60 per hour for that type of work. Respondents in this group said that chairs of certain committees (e.g., quality assurance or credentialing) received modest remuneration in the range of $250 per month. Some in this group felt that the hospital should pay these stipends, but more felt that the payment should come from medical staff dues or from both sources.

Survey respondents from large hospitals reported that, if the elected president of the medical staff was receiving compensation, it might be as high as $100,000 annually or as low as $15,000. Other reported salaries in this group were $30,000, $40,000, and $60,000 per year. In a few situations, the president-elect or the immediate past president received modest annual stipends in the $10,000 range. Many respondents reported significant nonsalary benefits for the top elected leaders, the most common being CME expenses, including expenses for attending ACPE educational programs. More respondents in the large hospital group felt that funding should be jointly from the hospital and from medical staff dues. In fact, one physician stated that "if the hospital needs to purchase administrative time, it should fund the position. If the medical staff is providing 'a place at the table' (a strong voice in running the hospital), perhaps it should fund the position." Other respondents felt that the amount of the stipend for any elected position should not be great enough so that the compensation alone attracted candidates for these positions.

In summary, hospital leaders, both professional administrators and physicians, recognize the increasing need for strong physician leadership. The survey information reported in this article points out that more and more hospitals and their medical staffs are wrestling with whether to pay certain elected physicians and others who commit significant time to medical staff affairs, how to pay those physicians, and how to provide monies to fund those positions. There is a slow but growing trend to pay for this important nonclinical work.

For more than 20 years, I have observed physicians practicing in hospitals, and my opinion is that many of us are willing to commit one or two or three hours a month to committee or staff meetings, but those that are willing to do the real work represent a small minority. They often sacrifice significant income, free time, or family time to do the administrative things that only practicing doctors can do. Are there nonmonetary awards? Absolutely, but my position is that financial compensation for significant management or leadership work is necessary. Otherwise, the hospital and the medical staff run the risk of "getting what they pay for."

The American College of Physician Executives would appreciate hearing from you if you have responses to this article or if you can share experiences on to how your hospital has dealt with this important issue.

Table 1. Monetary Compensation of Physician
         Leaders, by Hospital Bed Size(*)

Bed Size      Stipend Paid
             Yes         No

0-99         29.4%       70.6%
100-199      38.9        61.1
200-299      35.9        61.5
300-399      32.2        67.7
400-499      51.9        48.1
500+         64.4        35.6

(*) Category may not add to 100% because of a
nonresponse on the question or because of a
multiple response.

Table 2. Monetary Compensation of Physician
         Leaders, by Type of Hospital(*)

Hospital Type                  Stipend Paid
                              Yes        No

Community                    48.8%      60.4%
Government                   71.4      100.0
For-profit                   38.5       61.5
Not-for-profit               54.1       47.3
Community, not-for-profit    35.5       67.7
Other                        17.9       42.9

(*) Category may not add to 100% because of a
nonresponse on the question or because of a
multiple response.

Table 3. Monetary Compensation of Physician
         Leaders, by Hospital Location

Hospital Location     Stipend Paid
                     Yes        No

Urban                52.3%      47.7%
Suburba n            51.9       48.1
Rural                13.0       87.0

George E. Linney Jr., MD, FACPE, a management consultant specializing in health care issues, is located in Maitland, Fla. He is a member of the College's Society on Group Practice.