Compensation for hospital medical executives increased 7% in the past year, a new national survey shows.
Total average salary, including incentives, for vice presidents of medical affairs this year is $193,751, up from $180,930 in 1996. These figures continue an overall trend for physician executives, who have seen wage packages increase steadily since the mid-1980s. Compensation for hospital medical executives was $121,131 in 1986, according to survey data.
The Physician Executive Management Center, Tampa, Fla., prepared and released the report. Details of the report were part of a comprehensive yearly survey of physicians in leadership positions in healthcare organizations. The 1997 survey was based on more than 300 responses, with half being from hospital administrators.
The compensation increase shows that senior hospital medical managers have become an important part of the team, said David Kirshman, the PEMC's president.
"They are not just managers any more but qualified physicians who have been able to bridge the gap between the clinical side and management," Kirshman said. "And because physicians tend to listen best to other physicians, their place in this role has been very effective and therefore highly compensated."
The report shows that 49% of hospital physician executives have incentives as part of their compensation package. While that's about the same as last year, it compares with 73% of managed-care executives who have monetary incentives added to a base salary.
Some 76% of physician executives have a written employment contract, a marked increase from the previous year when only 55% of executives had contracts. The data suggest a trend toward written agreements for physician executives, Kirshman said.
"Parachute" clauses-written contracts that define terms plus provisions for continued compensation for a specific period should termination occur-are on the increase for vice presidents of medical affairs. This year 50% of executives have parachute protection, compared with 30% in 1996.
Some 31% of the medical vice presidents have management degrees, up 12 percentage points from the previous year. Meanwhile, the number pursuing degrees dropped to 4% from 9%.
The percentage of hospital physician executives who continue clinical responsibilities slipped to 9% from 11%. That's in sharp contrast to 1986 when 45% of physician executives were involved in clinical practice along with management duties.
Kirshman attributed the decrease in clinical involvement to the dramatic change in the physician executive's role.
"Early medical directors had responsibilities primarily for quality assurance and medical staff credentialing," Kirshman said. "Now the job has changed to include managed care, PHOs, larger medical staff relationship issues, expansion and all the contracting necessary aside from managed care."