Physician executives in the '90s: report of a national survey.

Physician Executives in the '90s: Report of a National Survey

Data for the 1990 survey report were derived from 722 questionnaires sent to U.S. physicians in 250+-bed hospitals, with a response rate of 21.3 percent.

Organization Size

The average number of licensed beds in the reporting hospitals is 563, while the total operating inpatient bed average is 455. Because of the continuing disparity between licensed and operating inpatient beds, the survey findings are based on the actual (operating) bed size, which ranged from 24 to 1,800 beds.

Medical Staff

The total active medical staff of respondent organizations averages 437 physicians. The largest average staff (818) is in a corporate organization, while the smallest (183) is in an investor-owned hospital. Government hospitals average 335 staff physicians, while not-for-profit institutions average 470.

The size of the medical staff is smaller for those who have previously held the vice president of medical affairs/medical director (VPMA/MD) position elsewhere (383 physicians) than for those who have not (444 physicians). This suggests that smaller organizations may be hiring physicians with executive experience to develop the position.

Position Profile

For the first time since we began conducting the study, significant numbers of women responded to the survey. In 1985, for example, there were almost no women. In 1987, a total of 3 percent were women. In 1990, that group has increased to 8 percent.

The average age of respondents was 53.5 years, notably lower than the 1987 average of 56.5 years and earlier studies as well. This suggests that the position's "second career" aspect is on the decline and that younger physicians are entering the field. In fact, a comparison of salaries by average age suggests that older physicians may be limited in their earning power by the "quasi-retirement" perception. Age actually declines as salaries increase (table 1, above).

Ninety-seven percent of respondents have the MD degree, (compared to 98 percent in 1987), but a trend to continued education is evident in the greater number and variety of additional degrees (MHA, 1 percent; MBA, 6 percent; JD, 2 percent; and other degrees, 14 percent). In 1985, only 5 percent of respondents had any additional degrees. Many respondents, when asked what additional education they might consider pursuing in the future, indicated the MBA degree (40 percent).

The question of the title for the physician executive remains complicated and unresolved (figure 1, above). There continues to be substantial resistance to regular line titles, such as vice president of medical affairs/professional affairs. A variety of titles continues in evidence in an apparent attempt to placate physicians who do not want a colleague to have a line title, as well as physicians who do not want to be thought of as managers.

The medical director title is more common in the smallest and the largest organizations than in mid-sized ones, where the VPMA predominates. This is true whether the measure of bed size or of operating revenue is used.

The position is clearly developing as a full-time job rather than a part-time or semiretirement role. In the 1985 study, 74 percent were full-time executives, while today 83 percent claim a full-time position. Because of this shift, the position can truly be said to have "come of age." Apparently, fewer physicians feel the need to keep one foot in the practice camp while working as an administrator as well. It is clear that the growing sophistication of the role demands full-time attention to its complex demands and is also contributing to decline of the "second-career" physician executive.

The average work week is 47.8 hours. Not surprisingly, those in the largest organizations (500+ beds) work longest (53.0 hours average). Those whose salaries are highest ($150,000+) are nearly at that level--52.7 hours was their average work-week. The fewest full-time hours worked was 43.3 hours per week, in corporate organizations. The range of hours worked per week was 6 to 80 hours, including of course both full- and part-time respondents.

Tenure in the position averages 4.73 years, down from 4.9 years in 1987 and 5.4 years in 1985 (figure 2, above). This decline gives a hint of the remarkably fluid marketplace of individuals available for this position. Physicians with management skills are likely to move into a new position if they receive an attractive offer, and cannot be expected to simply stay in place until they retire. Just as for other positions in the hospital, there is a strong demand for highly qualified people.

Appointment (94 percent) is still the most popular means of achieving the position, compared to election (6 percent), although this represents a slight decline from 1987 (98 percent appointed). While it is still true that the majority (74 percent) were already members of hospital medical staffs when they assumed the posts, this is a downturn from 1985, when 81 percent were "local people," already staff members. We are seeing an increasing number of organizations that are willing to hire candidates from outside their own medical staffs. In most cases, though, the physician executive continues to be drawn from the hospital's own medical staff ranks, as known quantities. Only one-third of those with MBAs were already a member of staff when appointed to the position, however.

Forty-six percent of respondents said they were the first to hold the position, compared to 60 percent in 1987. The decline is an indication of the proliferation of the position. Sixteen percent said they have held the position at other organizations. In 1987, when the study was last conducted, only 9 percent said they had previously held the job elsewhere.

A dramatic increase is seen in the numbers of board-certified physician executives, rising from 85.6 percent in 1985 to 87 percent in 1987 and to 95 percent today.

Forty-five percent maintain some level of medical practice, including both full- and part-time individuals (table 2, right). This is slightly less than the 48.8 percent who maintained a practice in 1985. The average time spent in practice is reported to be 14.7 hours per week for both full- and part-time individuals.

This position typically reports to the CEO (68 percent), COO (12 percent), senior medical director (7 percent), the hospital's board (7 percent), or another entity (6 percent). Those who have previously held the position in another organization are less likely (58 percent) to report to the CEO and more likely to report to the COO (25 percent).

Board membership, or at least regular attendance at board meetings, continues at about the same rate as in earlier studies. Today, 34 percent of respondents are either voting or nonvoting members of the board. Another 48 percent say they regularly attend board meetings, although they are not members. This is total of 82 percent of respondents who have direct, regular interaction with the board. In 1987, the figure was slightly higher, at 86 percent. In 1979, however, only 42 percent were members or attended board meetings.

Management Responsibilities

Respondents were asked to consider a variety of tasks and indicate which of them were their direct responsibility. From these, a pattern can be readily discerned.

Medical Staff Administration--87 percent of respondents indicated direct management responsibility for the credentialing and recredentialing processes. Other medical staff management responsibilities claimed by respondents include discipline (75 percent), office management (67 percent), recertification (60 percent), and committee records and minutes (55 percent).

Quality Assurance/Utilization Review--A group of activities related to quality assurance and utilization review yielded the predictable result that 91 percent of respondents are directly responsible for QA in their organizations. Other QA/UR management responsibilities include utilization review (75 percent), risk management (57 percent), UR decisions (50 percent), PRO considerations (40 percent), database management/analysis (36 percent), infection management (34 percent), and severity indices (21 percent).

Organizationwide Activities--Organizationwide activities for which respondents have management responsibilities include medical planning (85 percent), physician recruitment (66 percent), cost containment (63 percent), JCAHO survey preparation (61 percent), community relations (47 percent), and marketing (25 percent).

Medical Education/Research--Management responsibility for these activities was claimed by fewer respondents: continuing medical education (67 percent), graduate medical education (51 percent), house staff coordination (47 percent), research (40 percent), and negotiating/managing affiliation agreements (30 percent).

Other Direct Management Responsibilities--Other important but not previously noted activities include physician compensation negotiations (64 percent), physician practice development (58 percent), contracting with physician groups (42 percent), and evaluation/negotiation with managed care companies (30 percent).

How Time Is Spent--A pattern emerges in the responses to the question asking respondents to quantify the time they spend on a variety of management tasks: medical staff administration (29.6 percent), UR/QA (23.2 percent), organizationwide activities (22.5 percent), medical education/research (11.8 percent), and other activities (12.9 percent).

Salary Comparisons

The average salary for this position nationwide is $128,572, with a range that begins at $24,000 and tops out at $260,000. One-fifth (20.3 percent) earn less than $100,000 annually, while 10 percent earn $175,000 or more. Those who have an MBA earned, on average, $116,000. Those who have previous management experience as a VPMA or medical director in another organization earned an average of $133,000, while those in their first job in this management function earned $128,000 on average. Salary breakdowns by type of organization, bed size, operating revenue, and title are shown in tables 3-6, right. Average salaries within general salary brackets are shown in table 7, right.

For comparison purposes, the average salary of respondents in 1979, the first year of the survey, was $63,478, and the average in 1987, the last survey year, was $110,760.

Employment Contracts and

Bonuses

Forty-four percent have an employment contract, a marked decline from 1987, when that figure was 55 percent. Incentive compensation plans increased in the same period, however. Thirty-five percent in 1990 have an incentive compensation plan, while only 25 percent did so in 1987--and only 10 percent in the 1985 study. Those in investor-owned hospitals were more likely to have a plan, as were those who hold an MBA.

The average percentage of base salary for which they are eligible in incentive bonus is 23.4 percent, and the average incentive compensation award last year was 13.2 percent. These figures are in line with what we see in other positions within the hospital structure.

Benefits offered by hospitals in 1990 and 1987 are shown in table 8, above.

Professional Development

Membership is held in a variety of professional organizations, with ACPE clearly dominant in this group of respondents. The range of organizations is shown in table 9, above.

Respondents were asked to speculate on what type of additional education or training (related to administration and management) they might pursue. Courses in management and finance and a formal MBA program received the most mentions (table 10, right).

Physician Developer and

Communicator

The roles of the physician developer and the physician communicator--as explored in an ACPE monograph written by Norbert Goldfield, MD, and David B. Nash, MD, MBA--were described for respondents.

Physician Developer--This physician develops interventions in the doctor-patient relationship intended to reduce health care costs for managed care companies and utilization review firms.

Physician Communicator--This physician communicates these interventions to practicing (line) physicians who implement them.

Physician executives were asked to place themselves on a continuum between the two positions. The results are shown in table 11, below. Physician communicator best describes the position held by most respondents; 88 percent chose 3, 4, or 5, and the mean response is 3.47, where the physician communicator is 5.

Report Card on Key Factors

We asked respondents to indicate how well or poorly they thought their board chair or CEO might "grade" them on various factors: Poor = 1, Good = 3, and Excellent = 5. The results are shown in table 12, below. Clearly, physicians executives feel some grievance on the topic of promotion, but this may be a self-imposed limitation.

Key Strengths

Respondents were asked to select from a list of management skills their five areas of strength and also of weakness (table 13, below). The key areas they chose suggest that physician executives feel confident of their leadership and interpersonal skills, but may wish to develop more technical capabilities in finance, marketing, etc. Operations/management and board relations are the only skill areas that appear on both lists, indicating perhaps that there is need for increased attention to these matters through education and actual experience.

Future Focus

Respondents felt that three main forces would affect their individual jobs in the next two or three years--organization and governance of the medical staff, changes in physician practice patterns, and measuring and enforcing quality standards. With regard to their organizations, physician managers responded that a reduction in government reimbursement, increased competition for patients and, again, measuring and enforcing quality standards are the three main forces facing them (table 14, above).

Summary

The physician executive is no longer an idea whose time has come. It has arrived, with enormous, far-reaching effects on the future of health care management. There is today a large and growing pool of credible, qualified, experienced physician executives who can provide real leadership and management expertise for both large and small hospitals.

Certainly, as purchasers look for value in health care, learning to measure and enforce quality standards will become the central role of the VPMA or medical director. Increasingly, physicians in leadership positions will be called upon not only to articulate how an organization obtains quality outcomes, but how it continuously improves quality as well.

In summary, the survey has once again shown that the role of the vice president for medical affairs/medical director is robust. Through written job descriptions, incentive payments, and a direct reporting relationship to the senior executive, physician executives will continue to have an important impact on the organizations they serve.

John S. Lloyd, MBA, MSPH, is President of Witt Associates, Inc., Oak Brook, Ill., and Frank M. Guilfoyle, MD, MBA, is Vice President, Witt Associates, Inc., Newport Beach, California.