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Physician/Healthcare Executive Compensation Data
2003 Cejka Search And Acpe Physician Executive Compensation Survey
Cejka Search and The American College of Physician Executives are pleased to present the third collaborative compensation survey of physician executives throughout the United States. The Physician Executive Compensation Survey provides the healthcare industry with up-to-date, real-life compensation data that is useful in compensation negotiations and supplying significant information on the relative value of physician executive responsibilities.
Top Earners
Member/Chair Board of Directors lead the list of top earners with a median compensation of $2,200 more than a very close CEO / President and $66,000 more than a Medical Director.
| Position | Median |
|---|---|
| Member/Chair Board of Directors | $280,000 |
| CEO/President | $277,800 |
| Chief Medical Officer | $253,500 |
| Department/Division Chair Manager | $250,000 |
| Chief Operations Officer | $237,500 |
| Vice President of Medical Affairs | $230,000 |
| Vice President of Quality | $229,000 |
| Medical Director | $214,000 |
| Associate/Assistant Medical Director | $204,000 |
| Consultant | $200,800 |
| Program Director | $200,000 |
| Professor | $198,000 |
| Physician Advisor | $177,500 |
Organization Type
The highest median compensation for all physician executives based on organization type was for those working in practice management companies ($360,000) and single specialty groups ($275,300). Those executives working for government run institutions reported the lowest compensation earned in 2002 ($162,000). Respectively, the median compensation for all Medical Directors was $214,000, while the median compensation for Medical Directors working for a government run institution was $161,000.
Compensation by Group Practice Size
Physician compensation for physician executives employed by a single-specialty group was higher than the compensation for physician executives employed by a multi-specialty group. For example, the median compensation for a single-specialty group Medical Director was $249,000 or $34,000 more than the median compensation for a multi-specialty group medical director ($215,000). Likewise, the compensation for a CEO / President employed by a single specialty group practice ($300,000) was $50,000 more than CEO / Presidents employed by multi-specialty groups.Median compensation for all physician executives by single-specialty group size was reported as follows:
| Position | Median |
|---|---|
| 1 to 15 physicians | $285,000 |
| 16 to 50 physicians | $275,600 |
| 51 to 150 physicians | $220,000 |
| 150 or more physicians | * |
Median compensation for all physician executives by multi-specialty group size was reported as follows:
| Position | Median |
|---|---|
| 1 to 15 physicians | $215,000 |
| 16 to 50 physicians | $215,000 |
| 51 to 150 physicians | $244,500 |
| 150 or more physicians | $246,000 |
Medical Specialty
Of the 2,060 respondents, 2,057 (99.85%) reported having a medical specialty. Three primary care specialties (family practice, internal medicine, and pediatrics) accounted for forty-seven (47%) of the survey sample, representing the largest returns of all responding specialties. The following is a list of the top twelve (12) specialties.
| Position | Median |
|---|---|
| Internal Medicine | 19% |
| Family Practice | 18% |
| Pediatrics | 10% |
| Emergency Medicine | 6% |
| Psychiatry | 4% |
| General Surgery | 4% |
| Obstetrics/Gynecology | 4% |
| Anesthesiology | 3% |
| Occupational Medicine | 2% |
| Pulmonology | 2% |
| Pathology | 2% |
| Orthopedic Surgery | 2% |
The ten (10) highest median compensation amounts for physician executives by specialty with thirty (30) or more respondents includes:
| Position | Median |
|---|---|
| Cardiology | $310,000 |
| Orthopedic Surgery | $295,000 |
| Anesthesiology | $281,114 |
| Emergency Medicine | $253,500 |
| Pathology | $251,000 |
| General Surgery | $246,000 |
| Pulmonology | $235,000 |
| Obstetrics / Gynecology | $221,000 |
| Internal Medicine | $220,000 |
| Pediatrics | $219,000 |
Distribution of Administrative and Clinical Duties
The average time devoted to administrative duties for all physician executives was seventy-one percent (71%), indicating that most of the survey respondents spent a majority of their time in management as opposed to practicing clinical medicine. Those physician executives who spent the most time in management are ranked below, followed by those physician executives who spent the least time in management.
Most time spent in management
| Position | Median |
|---|---|
| Chief Medical Officer | 91% |
| Vice President of Medical Affairs | 88% |
| Chief Operations Officer | 86% |
| Vice President of Quality | 84% |
Least time spent in management
| Position | Median |
|---|---|
| Member/Chair Board of Directors | 35% |
| Physician Advisor | 43% |
| Professor | 50% |
| Department / Division Chair / Manager | 53% |
Administrative Compensation
Results showed that the more time an executive spent in administration, the more compensation the executive received for administrative duties. The median compensation for administrative duties only for all physician executives who spent twenty-five percent (25%) or less of their time in administration was $35,000, compared to $225,000 for those physician executives who allocated one hundred percent (100%) of their time to administrative duties.
| Admin. Time | % of Sample | Median Compensation |
|---|---|---|
| 1% to 25% | 14% | $35,000 |
| 26% to 50% | 14% | $95,000 |
| 51% to 75% | 8% | $162,500 |
| 76% to 99% | 22% | $220,000 |
| 100% | 41% | $225,000 |
Management Experience
Median compensation for new physician executives was the lowest at $190,000, whereas median compensation for physician executives with 16 or more years experience was the highest at $242,000. However, most of the survey respondents had between 10 to 15 years experience in an administrative position.
| Years Experience | % of Sample | Median Compensation |
|---|---|---|
| 1-2 years | 6% | $190,000 |
| 3-5 years | 16% | $208,000 |
| 6-9 years | 27% | $225,000 |
| 10-15 years | 32% | $230,000 |
| 16 or more years | 19% | $242,000 |
Type of Medical Degree
Ninety-five percent (95%) of the survey respondents held a Doctor of Medicine degree with the remaining five percent (5%) holding a Doctor of Osteopathic Medicine degree. Of the 109 D.O.s represented in the survey, thirty-eight percent (38%) were Medical Directors.Additional Post-Graduate DegreesSeventeen percent (17%) of the survey respondents hold a Master of Business Administration degree, qualifying it as the preferred business management degree amongst all physician executives.
Next is a Master of Healthcare Administration degree (8%), followed by a Juris Doctorate (6%), Master of Public Health (5%), and Master of Medical Management degree (2%). Not only was the Master of Business Administration degree the preferred degree but it also had the highest median compensation at $239,000 followed closely by physician executives with Master of Medical Management degrees at $232,500.
Physician executives with no post-graduate business management degree trailed in compensation only to those who possessed an MBA or MMM. At a median compensation o $225,000, those with No Degree earned the same compensation as an individual with an MHA and more than individuals with a MPH or JD.
| Position | No Degree | MBA | MMM |
|---|---|---|---|
| CEO/President | $260,000 | $350,000 | $260,000 |
| CMO | $247,000 | $260,000 | $300,000 |
| Medical Director | $215,500 | $215,500 | $193,000 |
Gender
Eighty-nine percent (89%) of the physician executives responding to the survey were male. Of the twelve percent (11%) of female physician executives who responded to the survey, fifty-one percent (51%) were Medical Directors, nine percent (9%) Vice Presidents of Medical Affairs, eight percent (8%) Department / Division Chair Managers, and eight percent (8%) Associate / Assistant Medical Directors.
Geographic AreaMedian compensation by geographic area for physician executives ranged from $220,000 and $230,000. The Northeast and North Central regions combines for fifty-four (54%) of the responses. Median compensation for each of the regions surveyed is as follows:
| Position | Median |
|---|---|
| Northeast | $228,000 |
| Southeast | $224,000 |
| North Central | $230,000 |
| Central | $220,000 |
| West | $220,000 |
Several positions had significant differences in median compensation based on geographic area. For example, Chief Executive Officers/Presidents working in the Southeast United States earned a median compensation of $300,000 in 2002, whereas Chief Executive Officers/Presidents working in the Central region posted a median compensation of $225,000, representing a difference of $75,000.
Organization Location
Physician executives worked in either urban (58%) or suburban (31%) locations, while the remaining worked in rural locations (11%). Typically, those in an urban setting were compensated the most, followed by suburban and rural. However, there were several exceptions. For example, CEO / Presidents in urban settings were compensated $310,000, in suburban settings, $240,000, and in rural settings, $273,500.
Organization's Scope of Operations
Because healthcare organizations continue to expand into both regional and national markets, it was necessary to differentiate the compensation between executives who are employed by a local organization, regional organization, or national organization. Survey results report that executives working in regionally operated organizations were typically paid more than those executives who worked for locally or nationally operated organizations.
| Position | Median |
|---|---|
| Local | $217,000 |
| Regional | $230,000 |
| National | $226,000 |
For example, the median compensation for Department / Division Chair / Managers working for regionally operated organizations was $251,352, compared to $230,000 for those working for local organizations, compared to $215,000 for those working for national organizations.
Individual Scope of Responsibilities
Used to define one's overall scope of responsibilities within the organization, most physician executives indicated their role was local. However, a significant number of executives did indicate that their administrative responsibilities involved a regional market.
| Position | Median |
|---|---|
| Local Responsibilities | $220,000 |
| Regional Responsibilities | $234,500 |
| National Responsibilities | $232,500 |
Straight Salary vs. Salary Plus Bonus
Physician executives earning a salary plus bonus were typically compensated more than those executives earning only a straight salary. The respective medians are reported as follows:
| Position | Median |
|---|---|
| Salary only | $200,863 |
| Salary plus Bonus | $240,000 |
As the percent of bonus comprising the executives' overall compensation increased, so did the overall median compensation:
| Position | Median |
|---|---|
| 10% or less | $220,000 |
| 11%-20% | $247,000 |
| 21%-30% | $275,000 |
| 31%-40% | $300,000 |
| 41% or more | $342,000 |
Bonus Components
When choosing bonus components, respondents could have indicated several components, which made up their total bonus. On average, the top three bonus components chosen were the following:
| Position | Median |
|---|---|
| Organizational Goals / Objectives | 49% |
| Organization Profit | 46% |
| Personal Goals / Objectives | 37% |
Employment Arrangement
Defining the terms of physician executives' employment, thirty-nine percent (39%) had a letter of agreement while thirty-five (35%) had a contract. Twenty-six percent (26%) indicated that they had no formal agreement. This ration varied some, but for all positions, more physician executives had a letter or agreement rather than a contract. However, there were a few exceptions. For instance, thirty-seven (37%) of CEO / Presidents and thirty-nine (39%) of Medical Directors and COOs had a contract, which represents the highest concentration of contracts within a job title than any other title in this survey.
Severance Package
Seventy-one percent (71%) of all physician executives responding to the survey did not have a severance package. Surprisingly, only thirty-three percent (33%) of all CEOs responding had a severance package.Severance Package TermsOf the above thirty-three (33%) of CEOs that had a severance package its average value was $300,491 and average length was 71 weeks. Medical Directors severance packages had an average value of $248,189 and an average length of 31 weeks.
Administrative Responsibilities
Most physician executives were involved in general management, followed by quality management, liaison activities, recruitment, program development, personnel management, and educational.
| Position | Percent Responding | Average Percent of Time |
|---|---|---|
| General Management | 93% | 33% |
| Quality Management | 89% | 30% |
| Liaison | 74% | 16% |
| Recruitment | 74% | 16% |
| Program Development | 58% | 11% |
| Personnel Management | 48% | 15% |
| Educational | 20% | 24% |
2000 vs. 2002 Physician Executive Compensation
Between 2000 and 2002 physician executive compensation increased approximately seven percent (7.1%) from $210,000 to $225,000. The largest compensation increases from 2000 to 2002 were CEO / Presidents in Hospitals (41.6%), Chief Medical Officer Officers in HMOs (30%) and Associate / Assistant Medical Directors in Hospitals (28.5%). The largest compensation decreases from 2000 to 2002 were all Chief Operations Officers (-5%) and Department / Division Chair / Managers in Multi-specialty groups (-2.2%) and Hospitals (-1.6%).
Although some titles reported a significant increase or decrease in compensation between 2000 and 2002, this shift could be attributed to the difference in survey sample size between the two reports.2000 vs. 2002 Median Physician Executive Compensation.
| Position | 2000 | 2002 | % Change |
|---|---|---|---|
| All Physician Executives | $210,000 | $225,000 | 7.1% |
| Associate/Assistant Medical Director | $170,000 | $204,000 | 20.0% |
| Hospital | $165,000 | $212,000 | 28.5% |
| Multi-specialty Group | $196,000 | $220,000 | 12.2% |
| HMO | $169,000 | $202,939 | 20.1% |
| CEO/President | $250,000 | $277,800 | 11.1% |
| Hospital | $221,000 | $313,000 | 41.6% |
| Single-Specialty Group | $260,000 | $300,000 | 15.4% |
| Multi-specialty Group | $240,000 | $250,000 | 4.2% |
| HMO | $220,000 | $270000 | 22.7% |
| Chief Medical Officer | $225,000 | $253,500 | 12.7% |
| Hospital | $220,000 | $250,000 | 13.6% |
| Multi-specialty Group | $220,000 | $250,000 | 13.6% |
| HMO | $231,500 | $300,000 | 30.0% |
| Chief Operations Officer | $250,000 | $237,500 | -5.0% |
| Consultant | $180,000 | $200,800 | 11.6% |
| Department / Division Chair / Manager | $233,000 | $250,000 | 7.3% |
| Hospital | $262,000 | $257,840 | -1.6% |
| Single-specialty | $300,000 | $330,000 | 10.0% |
| Multi-specialty Group | $225,000 | $220,000 | -2.2% |
| Medical Director | $200,000 | $214,000 | 7.0% |
| Hospital | $210,000 | $220,000 | 4.8% |
| Single-specialty Group | $250,000 | $249,000 | -.40% |
| Multi-specialty Group | $200,500 | $215,000 | 7.2% |
| HMO | $200,000 | $218,500 | 9.3% |
| Member / Chair Board of Directors | $235,000 | $280,000 | 19.1% |
| Professor | $193,000 | $198,000 | 2.6% |
| Program Director | $181,750 | $200,000 | 10.0% |
| Vice President of Medical Affairs | $215,750 | $230,000 | 6.6% |
| Hospital | $215,000 | $230,000 | 7.0% |
| Academic Health Center | $220,000 | $250,000 | 13.6% |
| Vice President of Quality | $215,000 | $229,000 | 6.5% |
The 2003 Cejka Search / ACPE Physician Executive Compensation Survey was mailed in April, 2003 to 9,673 ACPE members. By August, a total of 2,153 surveys were received by the survey deadline. Of the 2,153 questionnaires received, 93 were discarded from the survey tabulation due to insufficient information that would have resulted in erroneous or misleading survey results. The total questionnaires used in the survey tabulation were 2,060, representing a twenty-one percent (21%) response.
The survey data is arranged alphabetically by job title and includes direct compensation by organization type, group size, time allocated to administrative duties, geographic area, organization location, scope of operations, revenue, years experience, scope of responsibilities, compensation method (e.g., salary plus bonus), executive bonus percent, medical specialty, and post-graduate business degree. Demographic information is also arranged by title and includes time devoted to administrative duties (administrative vs. clinical duties), fringe benefits, position responsibilities and time allotted to each, and additional education (e.g., MBA, MHA, MPH, MMM).
Compensation data reported in this survey is for the 2002 calendar year. Direct compensation includes base salary, bonuses, incentive payments, research stipends, honoraria, and distribution of profits. Compensation reported in this survey includes compensation for both administrative and clinical duties. Compensation does not include the dollar value of expense reimbursements, benefits paid by the organization (health insurance, CME, malpractice insurance, etc.), or any employer contributions to a retirement plan (401k, 403b, or Keogh).
The total number of titles reported in the survey are thirteen (13). The titles are listed below and are ranked according to the total number of responses and percent of sample. Although some titles received a low number of responses, their respective data was reported in some of this report to illustrate market supply and penetration.
| Position | Median |
|---|---|
| Medical Director | 38% |
| Chief Medical Officer | 15% |
| CEO/President | 10% |
| Department/Division Chair/Manager | 9% |
| Vice President of Medical Affairs | 7% |
| Associate/Assistant Medical Director | 7% |
| Consultant | 3% |
| Member / Chair Board of Directors | 2% |
| Program Director | 2% |
| Vice President of Quality | 2% |
| Chief Operations Offficer | 2% |
| Professor | 2% |
| Physician Advisor | 1% |
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