Compensation for Physicians in Leadership Increases

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Cejka Executive SearchSM ― in partnership with the American Association for Physician Leadership® ― announced the results of the 10th biennial Physician Leadership Compensation Survey. According to the survey, total median compensation for physicians in leadership in 2016 is $350,000, a three-year gain of 8% since the last survey in 2013. While fairly consistent with growth over the past seven years, this lags pre-recession two-year growth rates of 12% reported in 2007.

“Given health care reform and the continued attention on costs, including executive compensation, we don’t expect physician leader compensation to return to pre-recession growth rates anytime soon,” said Paul Esselman, Cejka Executive Search’s Senior EVP and Managing Director. “However, there are emerging roles in response to the shift toward value-based care that provide physician leaders with significantly greater opportunities for earnings, as well as strategic input and organizational influence.”

Chief Executive Officer Not Always the Highest Paying Job

According to a press release from Cekja, the highest-paid physician executives on average earned $499,000 and served in emerging roles that include: Physician in Chief, Chief Strategy Officer, Chief Transformational Officer, Chief Innovation Officer and Chief Integration Officer.

“Physicians in these transformative roles are often tasked with ‘connecting the dots’ across the organization and care continuum to achieve the greater efficiency and effectiveness of care required by newer reimbursement models, including population health management and accountable care,” said Joyce Tucker, Cejka Executive Search EVP and Managing Principal.

Trending Compensation for C-Suite Physician Leaders

(Median compensation 2016 vs. 2013)
Emerging Roles, C-Suite: $499,000 vs. $469,000, up 6%
Chief Executive Officer/President: $437,500 vs. $410,000, up 7%
Chief Medical Officer: $388,000 vs. $365,000, up 6%
Chief Quality/Patient Safety Officer: $375,000 vs. $375,000
Chief Information Officer/Chief Medical Information Officer: $372,500 vs. $315,000, up 18%

The Growing Role of “Big Data” Drives Compensation Higher

The greatest increase in C-suite compensation since 2013 was 18% for physicians in the Chief Information Officer (CIO) or Chief Medical Information Officer (CMIO) roles. The spike can be explained by the roles’ shift in focus ― from electronic medical records implementation to ensuring the usability of data to support preventative care at the individual provider level and risk-based accountable care at the enterprise-level. “Clearly, there is perceived value in having a physician leader drive these initiatives and facilities are willing to compensate accordingly,” said Esselman.

Other Pathways to Higher Compensation

Those who operate at a system-wide level, hold post-graduate degrees or certifications or whose compensation is most aligned with organizational goals, also earned more. For example, physician leaders working at the corporate or parent-level of a health system saw an average 67% spike in median compensation since 2013.  As compared to physician leaders with no post-graduate degrees, a master’s in business administration (MBA) earned respondents on average 13% more and a certified physician executive (CPE) on average earned 4% more.  In addition, leaders who allocated more time to administration and whose performance-based pay was a higher percentage of total compensation earned more as well.

Demand for Clinical Quality Leadership Remains Strong

Outside of the C-suite, the highest three-year pay gain was 26% for physician leaders focused on clinical initiatives serving as president of the medical staff or medical director, assistant or associate. The number of respondents in these positions also rose as a percent of total physician leaders, from 5% in 2013 to 8% in 2016. This indicates an emphasis on building the next organizational level of quality leaders in response to quality outcome measures now increasingly tied to reimbursements.

More Complex Physician Leader Roles Call for Expanded Skills

Physician leaders are serving in more strategic and complex roles than in the past. For example, 61% say they have more strategic input than the previous year, and more than half (54%) have multiple or shared administrative reporting relationships. Of those, 49% (versus 24% in 2013) are administratively accountable to more than one person, and 29% (versus 19% in 2013) have shared direct reports.

“Education areas selected by physician leaders as those having the greatest ability to enhance their job performance, demonstrate the strategic nature of physician leader responsibilities,” said Dr. Peter Angood, American Association for Physician Leadership® CEO and President.

These include: financial analysis, change management, strategic planning, population health management, physician engagement and conflict resolution.

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