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Compensation for elected hospital medical staff leadership.

As physicians practices become more complex and their practice incomes more difficult to maintain, hospitals concurrently require more physician input into organizational, utilization, and strategic planning matters. Physicians and hospitals across the country are discussing the question of financial compensation to physicians for the time they spend performing these hospital administrative tasks. It is already common practice for hospitals to pay a salary for medical direction of hospital departments such as intensive care units or pulmonary laboratories. The question has become whether this practice should be extended to elected medical staff leadership.

The relationship between hospitals and their medical staffs increasingly determines the success of both parties. As dictated by accreditation and legal standards, the medical staff is accountable to administrators and trustees for the quality of medical care in the institution. To ensure that the quality improvement process functions effectively, hospitals need an efficient and effective medical staff organization.. In addition, in an increasingly competitive environment, hospitals and medical staffs are forming physician/hospital organizations. These and other joint ventures demand dedicated physician leadership to cement the required physician/hospital bond. Elected hospital medical staff leadership continues to provide an essential service to both the medical staff and the hospital administration for these and other reasons.

As late as 1989, in a survey with 2,300 hospitals responding, the American Medical Association found that nearly 9 of 10 chiefs of staff worked on a voluntary basis.[*] To provide an update for hospital medical staffs in Michigan, a survey of Michigan hospitals was performed in the fall of 1991. Of 186 hospitals in the state of Michigan, 96 have medical directors who are members of regional physician executive organizations sponsored by the Michigan State Medical Society. These 96 physicians were surveyed, with 64 respondents. Thirty-seven of the respondents were from southeastern Michigan (greater Detroit). Nineteen were from western Michigan, and eight were from eastern Michigan.


Fewer than 5 of 10 chiefs of staff (46 percent) are compensated for their duties (table 1, page 24). In the Detroit metropolitan area, 48 percent of the chiefs of staff are compensated. In western Michigan, 50 percent of the chiefs of staff are compensated, and, in eastern Michigan, only 25 percent of the chiefs of staff are compensated.

The overall amount of the compensation in the state of Michigan varied from $5,000 to $80,000 per year. In greater Detroit, compensation centered around $25,000 to $30,000 annually. In western Michigan, compensation centered around $12,000 to $25,000. In eastern Michigan, it averaged $30,000 per year.

Of the 64 hospitals responding, 85 percent have medical staff dues (table 2, below). The amount of the dues ranges from $25 to $440 per year. In the Detroit metropolitan area, 92 percent of the hospitals have dues, with amounts ranging from $25 to $250 per year, with an average amount of $175 per year. In western Michigan, 79 percent of the hospitals have dues. The amounts range from $75 to $440 a year, with the average at $150 per year. In eastern Michigan, 75 percent of the hospitals have dues, with amounts ranging from $40 to $200 per year, and average annual dues of $50.

In one-third of the hospitals, hospital administration alone provides compensation to the medical staff leadership. In one-third of the hospitals, it is provided by medical staff funds alone, and in the other third, it is provided by a combination of to the question of compensation for the chief of staff-elect. Approximately 86 percent of the hospitals do not compensate the chief of staff-elect. Of those that do, the range is between $2,000 and $20,000, with the median at $5,000.

Table 5, above, addresses the issue of other elected leaders receiving compensation. More than 91 percent of the hospitals do not compensate annual basis.


Since the 1989 AMA survey, when 90 percent of chiefs of staff worked on a voluntary basis, the number of hospitals compensating chiefs of staff has increased to 45 percent in Michigan. This still leaves more than half the state's chiefs of staff working on a voluntary basis. By far the majority of Michigan hospitals do not compensate anyone other than the chief of staff. In one-third of the hospitals, medical staff funds alone provide the compensation to medical staff leadership; in the rest, hospital administration either contributes to or fully funds the compensation.

Bias may have crept into this survey because of hospitals that did not respond. They may be more likely not to compensate leaders than those that did respond. If that is the case, the true percentage of leadership compensated may be lower than reported.


Certainly, every hospital needs an effective medical staff organization. The performance of this increasingly important medical staff role requires a major commitment of time and energy on the part of medical staff leaders. As can be seen with these survey results, the trend is to compensate medical staff leaders, at least at the chief of staff level. This trend most likely will continue, as physicians' practice incomes become more difficult to maintain, while medical staff leadership positions require a greater commitment of time.

However, a frequently voiced concern is that the receipt of compensation by medical staff leaders may alter their relationship with both the medical staff and administration. If the medical staff leadership receives compensation solely from a medical staff dues fund, some say, this may promote an adversarial relationship between the medical staff and administration, in which medical staff leaders may be seen as physician advocates against administration. On the other hand, if physician leaders receive compensation solely from administration, there may be a perception among the rank and file medical staff that the leadership is being bought by administration.

There is also the issue that voluntarily giving one's time to an organization in what one believes to be an act of altruism has its own intrinsic reward. When one accepts compensation for otherwise altruistic acts, some of the honor and respect otherwise accorded the position may be diminished. The public image may become that of placing economics ahead of ethics.

Medical staff officers' compensation usually has been at the level of an honorarium, rather than truly replacing lost practice income. In our very fast-paced and busy society, it may be necessary to provide some level of financial consideration for the time and effort put into leadership, as physicians and their families make difficult choices about priorities for their time and energy.

Each hospital medical staff should make its own decision, in concert with administration, about the pros and cons of paying medical staff leadership. The question to ask is whether or not payment to medical staff leaders will increase the quality of care and serve the best interests of patients and the community. If the decision is made to compensate medical staff leaders, it would seem prudent to do this from a joint fund of both medical staff dues and administrative funds, so that as little prejudice as possible is present in the situation.

[*] Survey Results, Hospital Medical Staff Officers. Chicago, Ill.: American Medical Association, Hospital Medical Staff Section, Nov. 1989.

Marsha MILBURN, md, mph, is Vice President, Medical Affairs, INGHAM Medical Center Corp., Lansing, Mich. She is a member of the College's Society on Hospitals.
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Title Annotation:Medical Staff Relations
Author:Milburn, Marsha
Publication:Physician Executive
Date:Jul 1, 1992
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