Physician Executives Breaking Out of Middle Management.

DESPITE SOME harrowing times in health care, the physician executive has arrived.

Physicians served as executives in many health care organizations where they succeeded in establishing and legitimizing the senior medical officer as an important, relevant role.

Once established, the role of senior medical officer is rarely eliminated. That's because effective physician relationships are so critical.

Some suggest that the tenure of medical officers is short-lived and turnover is high (see The Physician Executive, July/August 2000 issue). But, in truth, physician executives have remarkably long and stable runs. (See sidebar) And even when a misstep occurs, the aftermath rarely focuses on the legitimacy of the role. It centers on how to get the right person in the role.

Of all the health care leaders, physician executives are most wedded to mainstream health care. This is largely due to their clinical background and an absence of significant, high-level, general management experience.

Think about this. All other members of a typical senior management team could leave health care and head in other career directions, relying on their general operations knowledge and management skills. It also works in reverse, as executives arrive from outside health care and exceed at the highest levels of medical management.

By contrast, physician executives are content experts who may transition out of mainstream health care, but rarely leave to take jobs in other industries at high management levels.

A critical juncture in physician executive careers is the transition from middle management to senior management. Although role models and pathways are not abundant, it can be done.

Changing your mindset 

Becoming a successful physician executive carries a mandate for lifelong learning and development.

For physicians, the general education they receive in medical school usually leads to specialty training. The clinical practitioner usually stops there. A high value is conferred on their specialist credentials. Specialists are sought out for specific knowledge and intelligence.

To advance to the highest levels of health care management, however, physicians must reverse course and become generalists. They must develop knowledge of other disciplines, including:

* Operations

* Finance

* Human resources 

* Strategic planning 

* Business development

* Community involvement

* Board relationships

Structural changes in thinking are also necessary.

Physicians see their expertise as widely transferable. Because many run their own offices, they perceive themselves as the top person in the delivery of services to the patient -- and from that standpoint, they are.

They appreciate medical complexity, but not the operational, political, logistical, and human resource challenges of a large system of care. They are prone to believe they are qualified for challenges beyond their capabilities.

To succeed, physician executives must discard those beliefs and approach the business of health care with a markedly different set of assumptions.

As brave physician executives already discovered, the process is not easy or straightforward. But it does offer a high degree of challenge and tremendous excitement. Rarely do physician executives return to the clinical ranks.

What's in a name?

A telling development of acceptance for physician executives in senior management is the transition of their title. [5]

* When the title was medical director, the permanence of the position was fluid and responsibility varied. It could mean anything.

* For vice presidents of medical affairs (VPMAs), responsibility centered on managing the medical staff and overseeing the quality of patient care.

* The latest and broadest title for the physician executive in a senior management position is chief medical officer (CMO). It establishes the senior medical officer with the same weight as the chief finance officer and chief operations officer.

In reality, the CMO title gives license to be active in strategic organizational decisions and joint initiatives involving physicians. It also brings participation in general business decisions with the board.

When CMOs sit at the table with the senior management team, there is an expectation that they hold legitimate, operational responsibilities.

Duties may range from oversight of the patient care team and medical education to management of medical informatics. And no matter what, a strong understanding of the organization's financial stability is clearly a requirement.

Don't expect a clear demarcation between the VPMA and CMO roles. There is ongoing overlap of responsibilities in establishing their respective duties. The legitimatization of a true CMO will be related largely to how the first person in the role handles the position.

VPMA and CMO Roles: Key Differences

Although VPMAs depend on others for professional success, that success is often driven by their personal ability to forge and manage relationships. By contrast, the CMO is dependent on other managers and is a level removed from the hands-on delivery of health care.

Moving up the ranks

What is really happening here?

The physician executive is in transition to achieve a better balance between responsibility and authority. CMOs are now on a par with their senior management colleagues. Mature CMOs can be competitive candidates for the senior executive role -- the true litmus test of peer stature in the senior management group.

The evolution of physician executives to executive vice president (EVP) and on to chief executive officer (CEO) has been slow outside of physician-dominated cultures.

Rarely do health care delivery systems specify that lead operations officers must have a clinical background. And the pool of candidates meeting this description is limited. However, VPMAs are now aspiring to CMO positions, and then being promoted to EVP.

These are the same steps taken by many successful, nonphysician CEOs who capitalized on their management skills while honing their leadership capabilities. There are real advantages to building on gains in the same organization.

Times are changing

Committees conducting CEO searches are beginning to request that physicians be included in candidate slates. This represents real change.

The pendulum is beginning to swing in recognition of the value that a physician can bring to deliberations of senior management, where disease course, patient care, physician impact and relations community health, and other factors come to bear.

No quantum leaps are evident yet in the numbers of physicians chosen for these roles. It will happen over time. Successful CEO candidates will certainly emerge from the large numbers of physician executives who are gaining experience and leadership skills.

All discussions of careers ultimately lead to compensation.

Successful physicians on senior management teams ask for, and get, a premium for their expertise and contributions. Witt/Kieffer salary surveys for the last five years show senior physician executives are consistently compensated at a high level. And in 2000, the highest salary was indeed that of a physician CEO.

Industry-wide data on salaries is difficult to obtain as the number of physicians in the highest roles is still relatively small and real numbers are often anecdotal. But the compensation is always high.

What's next?

The opportunities for capable physician executives to break out of middle management and move into the top spots is growing. Consider these numbers:

* Only five percent of the organizations included in the most recent "Top 100 Hospitals" list from Modern Healthcare have CEOs who are physician executives.

* And no physicians are currently CEOs in the 34 health care systems with hospitals in the list.

* Health care is big business. Its annual revenues are comparable to general business and industry. Among the nearly 500 health care systems Witt/Kiefer tracks nationwide, 12 percent have annual revenues of $900 million and higher.

But the exercise of power and financial reward are only part of the equation.

These are people having fun! They are at the peak of their professional careers and they experience a deep sense of achievement and satisfaction. The investment they made in their career development was certainly worthwhile.

References:

(1.) Lansing, Alfred. Endurance/Shackleton's Incredible Voyage. Carroll & Graf, 1999.

(2.) Capparell, Stephanie and Morrell, Margot. Shackleton's Way. Penguin Putnam Inc., 2001.

Mary Frances Lyons, MD, is a senior consultant at Witt/Kieffer in St. Louis.

BOOKS ON TERRIFYING SOUTH POLE EXPEDITION INSPIRE LEADERS

Leadership skills are in high demand, especially in the uncertain world of health care. Physician leaders better be ready to tackle many thorny issues such as:

* The instability of federal funding

* Widespread dissatisfaction of physician providers

* Rising health care premiums

* Labor issues and labor supply

* Diminishing resources

Mary Frances Lyons, MD, recommends two inspirational books on leadership that focus on an extraordinary leader and explorer:

Endurance/Shackleton's Incredible Voyage, [1] by Alfred Lansing, published first in the 1950s and reprinted in paperback in 1999, recounts in vivid detail the experiences of the fabled Antarctic explorer Sir Ernest Shackleton.

In a 1914-17 expedition, he failed to reach the South Pole and was stranded without hope of rescue, thousands of miles from civilization. After his ship sank, he and his men camped on an ice floe through the winter.

When the ice began to break up in the spring, Shackleton and a few of his crew members sought help by making an 800-mile trip on Antarctic seas in a rowboat, followed by an overland trek that included climbing mountains. Once he reached safety, Shackleton turned around and went back to rescue the remainder of his crew. He brought the entire, 27-man crew back -- in good health and good spirits.

Next, read a new business management book, Shackleton's Way, [2] by Margot Morell and Stephanie Capparell. The book draws its lessons from the explorer's amazing achievements.

Shackleton was a leader who knew how to manage in a crisis, could do a lot with few resources, and inspired others with his optimism, humor, strength, compassion and intelligence.

SURVEY RESULTS

STUDY LOOKS AT PHYSICIAN EXECUTIVE STRENGTHS, JOB TITLES

To gain other perceptions of the value of physician executives to their organizations, Witt/Kieffer conducted a national study of health care chief executive officers in 2000. Fifty-three percent of responding CEOs represented hospitals. The rest headed health care systems.

The CEOs were asked to assess their physician executives' most significant organizational contributions. Here's a look at the physician executives' key strengths as identified and ranked by the CEOs:

1. Skill aligning system and physician incentives

2. Development, implementation and monitoring of best practices for clinical staff

3. Effectively advising the board, medical staff and other senior executives

Other key strengths cited were: the ability to create strong ties between physicians and administration to enhance quality care and monitor utilization outcomes, and a keen focus on the interests of patients and the organization.

At least 30 different titles were reported for the physician executive position. The most common title (40 percent) remains vice president or senior vice president of medical affairs, medical director (10 percent) or chief medical officer (8 percent). The CEOs said most (85 percent) physician executives reported directly to them.

Internists (20 percent) represent the largest single medical specialty among physician executives, followed by family practice (11 percent) and infectious disease, pediatrics and psychiatry (6 percent each). Physician executives who maintain no active medical practice are still in the minority (44 percent). The rest spend up to one-fourth of their time in part-time practice.

While most other senior management team members join the organization from another facility, the majority of physician executives are still recruited from within their health care organization.

This indicates that both CEOs and medical staffs continue to value familiarity and an established trust level as important elements in the selection process.