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Medical Director's New Role Includes 'Quality Monitor'

 |  By John Commins  
   May 07, 2012

There was a time when being "medical director" in some physician practices was an empty title.

"We never had a medical director before and the groups that did, I'm not sure they did a whole lot. They worried about the schedule and helped with interviews," says Jeffrey W. Smith, CEO of Pottstown (PA) Medical Specialists Inc., a 45-physician multispecialty practice. "Now it is important."

The use of electronic medical records to analyze volumes and specific quality measures means that medical directors will become what Smith calls "quality monitors" who use reams of data to identify high- and low-performing colleagues. Those medical directors will be expected to see that those measures are met, and their compensation will be linked to achieving those goals. This breed of medical director will be expected to tell physicians, "Here are your goals. You have to kick tail and make sure we adhere to these guidelines," Smith says.

At Pottstown Medical Specialists, for example, physicians are required to closely monitor patients' hemoglobin A1c as a quality metric. "HA1c's have to be less than seven. They have to have documented blood sugars in their charts. The folks with diabetes have to have a foot and eye exam every year. These are the things that are tied directly to compensation today," Smith says.

On measurable and compensable items such as these, the practice's medical director works with a statistician to review each physician. "Part of the problem before was that the docs would say, 'I've been doing this but I've never recorded it.' It was just a given that it was done," Smith says. "But now with electronic health records, it is easy to see if it has been done. We compare internally doc to doc and do a national comparison, and we determine what an insurance company is looking for as a minimum acceptable level."

It's imperative that analyses and critiques come from a fellow physician—rather than, for example, a practice manager—because peer-to-peer admonishments are harder to brush aside.

"The problem I have is they say, 'Jeff, you are not a doctor,'" Smith notes. "So you need that physician on your side to go into that individual practice to say, 'Doc, you have to be doing this. This is the way the practice is going to be doing this. If you don't agree with it, you need to look for another job.'"

Smith warns that not all physicians are cut out for the work.

"A lot of docs, because they are seeing their compensation fall or static, look at [the] medical director [role] and they think. 'Oh boy, I can do that and make some additional money,'" he says. "But most docs don't have that personality. They are going to want to do this but there is only going to be a select few who are successful."

Most physicians are not confrontational with peers, Smith adds. "You have to have a medical director who is willing to fight the good fight and tell a colleague, 'You might be a good doc but nothing in our electronic record is proving that, so you need to change your ways, and if we can't get there we need to reevaluate your contract.'"

It gets a little more complicated when discussing compensation. A new Medical Group Management Association survey found that annual stipends for the medical director role could range from $25,000 to $44,600 based on scope of responsibilities, time demands, and clinical specialty. In addition, the survey found that nearly half of the medical directors reported working less than six hours a week on directorship activities. Smith says he expects that will change as quality metrics become more sophisticated and play a greater role in determining compensation.

Smith notes that several factors go into determining medical director pay. "In my group, I look at our medical director and I say, 'What would you have made as a primary care doc in our practice?' He works two full days a week in this role. I say that is 'X' amount of money because you would have been in the office otherwise. In addition we say, 'How did you do based on the quality measures?' Then we decide 'Are we going to pay him above that?'"

Existing compensation is a determinant, Smith says. "If we had a vascular surgeon in there doing that job, that rate would it be higher. But if he's making $1 million a year, we probably wouldn't pick him to be the medical director."

Regardless of the details of specific compensation packages, physician practices in this new era of measurable outcomes should understand that they will have to provide more pay for medical directors as their role becomes more complex, time-consuming, confrontational—and valuable.

"There are two things we are trying to do with our medical director: drive down costs and improve the quality of care," Smith says. "The groups that are moving forward as certified medical homes are already compensating medical directors more based on increased hours and increased revenues into the practice. We've already started to see the change."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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