Medical directors working in nonhospital-owned group practices receive higher compensation than their counterparts working in hospital-owned group practices, according to a recent study conducted by the Medical Group Management Association. "Medical Directorship/On Call Compensation Survey: 2009 Report Based on 2008 Data" reveals that nonsurgical specialists in nonhospital-owned practices received $27,400 more annually than those who work in hospital-owned practices, among other pay discrepancies.
Vast pay discrepancies between medical directors may be in part due to the role's shady history in hospitals. In the past, medical directors received generous salaries yet had vague job descriptions. "That's a big Stark no-no," says William Cors, MD, CMSL, president of medical staff services at The Greeley Company, a division of HCPro, Inc. in Marblehead, MA. Regulators cracked down on such arrangements, which often disguised a hospital's efforts to secure the allegiance of a physician or group of physicians, he explains.
Often, medical directorships were given to senior physician who were well liked, and their primary responsibilities were to smooth over medical staff issues and deal with disruptive physicians, adds Donald Thomas, CEO and CMO of Mentat Systems Inc., a healthcare consulting and direct management firm in St Petersburg Beach, FL. "[Hospitals] would pay them an out-to-pasture salary and didn't ask much of them."
Most hospitals have learned their lesson (let's hope) and are careful not to pay medical directors above and beyond fair market value, but the role of the medical director is still hazy in the hospital setting—hence the continued pay discrepancies. Nonhospital-owned physician groups have given medical directors executive-level responsibilities from the get-go, says Thomas, which means they get paid more because they do more.
Despite the medical director's historically unclear role in hospitals, Cors argues that properly designed medical directorships can serve as the backbone of an effective medical staff. "As more docs have less to do with the organized medical staff, quite frankly, someone has to do the work. One option is to have medical directors." However, for this model to work without tripping the Stark alarms and tarnishing a hospital's reputation, the hospital needs to define the medical director's responsibilities, create systems for assessing his or her performance, pay fair market value, and establish accountability (you know, like any other job).
"If hospitals were to require that the [medical director] be skilled in executive duties and hold their weight on the executive platform, they would get an ROI that far exceeds the amount they spend to pay them," says Thomas. He adds that the definition of a medical director should be no less clear than the role of a CIO, CEO, or COO and that the role should carry real and definable responsibilities. Those responsibilities should include the ability to read a basic balance sheet, create a budget, manage personnel issues, and "…all the stuff needed to manage an operating unit."
Liz Jones is an associate editor in the medical staff department atHCPro, Inc.
One of Atlanta's most powerful business leaders is turning his attention to cash-strapped Grady Memorial Hospital. Bernie Marcus, a co-founder of Home Depot and the force behind the Georgia Aquarium, has committed $20 million of his financial might to expand Grady's trauma center and stroke care. The gift will expand the hospital's trauma center to six bays from four and create a 20-bed intensive care unit for the victims of strokes and brain injuries.
Workers who have been laid off since Sept. 1 will begin receiving letters from their former employers telling them how to get health insurance for less money. Under this year's federal economic-stimulus law, employers must notify laid-off employees that they can buy COBRA insurance with a 65% subsidy for nine months.
Lawmakers hoping to keep alive plans to remake the UConn Health Center have recommended authorizing $50 million in bonding for the effort, despite Gov. M. Jodi Rell's opposition to the UConn plan. The $50 million recommended by the legislature's finance, revenue and bonding committee represents a small piece of the $475 million in bonding that the UConn proposal calls for. And it may mean little if Rell maintains her position that the proposal is too costly for the state during an economic crisis.
As the Florida Senate considers slashing $90 million in Medicaid payments to Florida hospitals, a study sponsored by the Florida Hospital Association warned that these cuts would cause a loss of four times that much in economic impact and cost thousands of jobs. A hypothetical $100 million reduction to Medicaid funding for Florida hospitals would cause the loss of 2,187 jobs statewide and $415 million in economic losses from reduced employment, spending and taxes, according to the study.
President Barack Obama's proposed 2010 budget includes a line item recommending the use of radiology benefits management firms to preauthorize imaging studies paid for by Medicare. The budget forecasts that preauthorization would save Medicare $70 million over 5 years and $260 million over 10 years. But the proposed use of RBMs to reduce Medicare spending on imaging has triggered strong controversy, notes Sg2 analyst Matthew Krutky, PhD.