Quality Outcomes Emerge as Key Focal Point in New Physician Executive Compensation Survey; Cejka Search and the American College of Physician Executives Release Findings from 2005 Physician Executive Compensation Survey

Business Wire, Nov 14, 2005

TAMPA, Fla. & ST. LOUIS -- Reflecting an ever-growing emphasis that healthcare organizations are placing on quality outcomes, the Vice President of Quality experienced the highest percentage pay increase (18 percent) over all other physician executive positions according to the 2005 Physician Executive Compensation Survey. The 2005 survey also found that while organization goals and objectives are still leading bonus components for physician executives, the percentage of bonuses tied to quality measurements more than doubled since the previous survey conducted in 2003.

These and other findings were released today in the 2005 Physician Executive Compensation Survey published by Cejka Search and the American College of Physician Executives (ACPE). Results from the survey, based on responses from 2,422 ACPE members nationwide employed in 15 executive positions, covered a variety of categories, including compensation by organization type, group practice size, time allocated to administrative duties, geographic area, organization location, scope of operations, revenue, years of experience, scope of responsibilities, executive bonus percent, medical specialty, and post-graduate degrees.

"It's clear that boards and chief executives are developing compensation strategies to recruit and retain physician executives capable of driving their organizations to achieve their quality objectives," said Carol Westfall, president of Cejka Search. "This trend is supported by these findings, along with other research data and our direct experience with organizations across the spectrum of healthcare."

Quality of care was also emphasized in the 2005 Hospital CEO Leadership Survey, released by Cejka Search and Solucient(R), reporting that the majority of hospital CEOs surveyed listed clinical quality/safety improvements as the number one critical focus area for an organization's success over the next three years. Further, the top-performing hospital CEOs gave the same statistical rank of importance to both clinical and financial benchmarking.

Barbara Linney, vice president of career development for ACPE, confirmed that physician executives are showing strong interest in developing their knowledge and skills in the area of quality outcomes. "ACPE's course, 'Three Faces of Quality,' is sold out at our Fall Institute which is underway today," she said. "The course topics include patient safety, outcomes management, clinical guidelines, patient satisfaction surveys, report cards and controlling costs while ensuring quality."

Physician executive compensation, on the whole, rose by an average of 6.7 percent from the 2003 survey to the 2005 survey. This was down slightly from the percentage change reported in the 2003 survey, which had shown a 7.1 percent increase over the prior two-year period.

"The steady increase in physician executive compensation corresponds to the rising demand for executives with advanced training and the ability to lead efforts to improve clinical, quality, financial, and operational outcomes," offers Deedra L. Hartung, vice president, executive search practice leader at Cejka Search. "Other healthcare developments spurring the need for physicians in leadership roles include the trend toward pay-for-performance reimbursement, the rise of new specialty care facilities and programs, the race to stay at the forefront of new technology and services, and ongoing efforts to launch innovative research and development operations."

Additional statistics revealed in the 2005 Physician Executive Compensation Survey include:

--Of the 15 physician executive titles responding to the 2005 survey, the highest paid were medical directors of single-specialty group practices, reporting an average yearly income of $340,000. This finding is likely due to higher clinical compensation levels associated with single-specialty group practices, often composed of high-revenue producing specialties and sub-specialties.

--Of the 15 physician executive titles responding to the 2005 survey, the lowest compensated physician executives worked for government run institutions, with an average income of $170,000.

--Three physician executive positions revealed double-digit increases, including member/chair board members (up 11 percent), vice president of quality (up 18 percent) and program director (up 10 percent).

--The largest compensation decrease, ranging from 4 to 7 percent, was reported by chief medical officers in HMOs and multi-specialty group practices (4 percent) and associates/assistant medical directors in multi-specialty group practices (7 percent). The decreases offset significant compensation growth reported between the 2003 and 2001 survey.

--Physician executives in urban settings are compensated at the highest level, followed by suburban-based physician executives. According to information provided by physician executives in rural settings, this category lags behind $20,000 as compared to urban and suburban categories.

--Physician executives working in regionally operated organizations are typically paid more than those working for nationally or locally operated organizations.