Trends in Hospital Executive Compensation: Q&A With Deedra Hartung of Cejka Executive Search.

As healthcare providers implement changes under healthcare reform legislation, strong leaders will be more important than ever. Hospital leaders' compensation should reflect this heightened need. However, hospitals are also facing reduced reimbursements and more pressure to reduce costs. Deedra Hartung, executive vice president and managing principal of Cejka Executive Search, offers insight into these opposing forces and other current trends in executive compensation.

Q: What are some of the current trends in healthcare executive compensation?

Deedra Hartung: Executive compensation is holding steady in terms of total compensation in most situations. But, we continue to see that more compensation is at risk, being paid out as a bonus only when performance goals are met in areas such as financial, operational and quality outcomes. Generally, the higher the total compensation, the greater the percentage of it is comprised by the bonus.

Q: What are the current challenges related to hospital compensation?

DH: We see two key challenges:
1. Margins. Hospital margins are getting tighter and that is expected to continue, especially as healthcare reform policies are implemented. Although it is yet to be determined what will happen with bundled payments, it is doubtful that both the hospital and doctors will receive the same or more than they have in the past. With this, it is difficult to continue to increase executive compensation.

2. Consolidation. There are a lot of mergers and acquisitions occurring. On one hand, that can displace executives out of the newly merged organizations. For those who remain to lead the larger organization it can actually increase their compensation, as they assume more responsibility for a bigger enterprise.
These challenges are at work in combination when we look at the trend toward physician integration. Hospitals are employing physicians and acquiring private physician practices in order to have an integrated health system. The short term effect is that the investment in acquisitions impacts hospitals' profitability, which in turn squeezes compensation, until the benefits of integration can be achieved.

Q: How can hospitals overcome these challenges?

DH: Most hospitals are getting leaner and reductions in force are occurring. With regard to the expense of physician acquisitions, it is critical that hospitals hire strong practice administrators with experience and skills in managing physician practices. Systems for effectively managing physician productivity standards, revenue cycle and physician charges must be in place to maximize revenues for the hospital or system.

Q: How has an increased focus on transparency affected the way hospitals compensate their leaders?

DH: Boards and executives are very sensitive to public awareness of executive compensation and the public perception of excess and extremes. Huge increases in either base or bonus compensation are too risky as are golden parachutes that are out of line with the market.

Q: With more and more healthcare organizations integrating to form larger networks, how do you think the distribution of compensation will change? Will fewer people have more money, or will the distribution be more even due to "shared savings"?

DH: This will be a difficult issue, especially where there are bundled payments. It remains to be seen which strategy hospitals will use to allocate the dollars.

Q: How do you predict compensation will continue to change?

DH: Performance-driven compensation will be dynamic because the key measures for outcomes and shared savings are yet to be fully defined — and are likely to keep changing. In any regard, executive compensation will continue to be tight in the near future and performance-driven over the long-term. Large systems will dominate the healthcare arena; smaller hospitals and independent physician practices will find it more and more difficult to compete for top leadership talent.

Are you attending the AMGA 2010 Annual Conference in New Orleans?

The Cejka Search team hopes to see you in New Orleans, LA at the AMGA 2010 Annual Conference taking place March 17-20, 2010.

Don’t miss the session “ A Commitment to Retention: Recruiting Best Practices and Highlights from the 2009 Physician Retention Survey” on Friday, March 19 at 3:45 p.m., which features Dr. J. Gregory Stovall, Sr. VPMA and Director of Organization Development, Trinity Mother Frances Hospitals and Clinics and Lori Schutte, President, Cejka Search.

More than just a simple recount of the 2009 Physician Retention Survey’s facts and figures, Dr. Stovall and Ms. Schutte will highlight recruitment and retention strategies that have succeeded for AMGA members in this difficult economy, share how to put those strategies in action for your organization, and provide a case study showing how a best practice recruitment and leadership development program succeeded in significantly improved retention. AMGA members attending the session will receive a complimentary copy of the 2008 survey and 2009 supplement.

If you cannot attend the session, we hope you will stop by Booth 220 to register to win a $500 AMEX Gift Card and visit with the Cejka Search team:
Lori Schutte, President, Cejka Search Mary Barber, VP, Recruitment Partnerships and Marketing, Cejka Search Michael Dunford, EVP, Managing Principal, Cejka Executive Search Lois Dister, EVP, Managing Principal, Cejka Executive Search Brian McCartie, VP Business Development, Cejka Search Jessica Prince, Regional Sales Director, Physician Staffing & Recruiting, Cejka Search Vivian Luce, Regional Sales Director, Physician Staffing & Recruiting, Cejka Search Rob Henges, Regional Sales Director, Physician Staffing & Recruiting, Cejka Search

We are looking forward to seeing you there!

Cejka Search at the ACPE Fall Institute

Cejka Search was pleased to participate in the ACPE Fall Institute which took place November 2009. Excellent feedback was received from those who attended Lois Dister's panel at the ACPE Fall Institute and we'd like to thank our distinguished panelists again for their time and contribution to this interactive event.

After the panel presentation, Lois Dister and Michael Dunford participated in a recruiter's reception. We'd like to share two photos from this event.


From left to right:
Michael Dunford, Managing Principal, Executive Search for Cejka Search and Dr. Frank N. Deus, Medical Director, Benefits and Medical Review






From left to right:
Dr. Jennifer Massara, Prescott Women's Clinic; Dr. Mike Dwyer; Lois Dister, EVP and Managing Director, Cejka Search; Michael Dunford, Managing Principal, Cejka Search; Dr. Barry Silbaugh, CEO, American College of Physician Executives

Lois Dister, Executive Vice President and Managing Director, Cejka Search to moderate panel of top healthcare executives

Attending the ACPE Fall Institute in Tuscon, Arizona, November 14-19, 2009? Mark your calendars for this too-important-to-miss bonus session on Monday, Nov 16 at noon.

Lois Dister, Executive Vice President and Managing Director, Cejka Search, will moderate an informative panel discussion with four of healthcare’s most highly-respected and experienced physician leaders.

Dr. David A. DiLoreto, MBA, FACS, Executive Vice President and Chief Medical Officer, Resurrection Health Care
Currently challenged with the clinical service integration of 9 independent acute care facilities, 12 nursing homes, and 4 assisted living centers, Dr. DiLoreto manages employed and affiliated physician networks, directs quality improvement and care management programs, and oversees resident and nurse training. He also provides clinical consulting on health information exchanges involving the Department of Defense and community health care providers.

Dr. Howard R. Grant, JD, Executive Vice President and Chief Medical Officer, Geisinger Health System
Dr. Grant is responsible for guiding the activities of 1,200 provider physicians and advanced practitioners in 60 locations and the three Geisinger hospital campuses, which include compensation, quality and performance improvement, credentialing, and new program development. He is also involved directly in clinical operations, capital planning and other issues for the Clinic and the Health System.

Dr. Robert W. Pryor, MBA, Chief Operations Officer and Chief Medical Officer, Scott & White
Dr. Pryor has been CMO of Scott & White since 2005 and COO since August 2007. As a member of the senior leadership team with strategic growth responsibilities, Dr. Pryor has system-level responsibility for all clinic operations and medical management at Scott & White, headquartered in central Texas. This physician-led, $1 billion organization employs 900+ physicians in all specialties.

Dr. Christopher Stroud, MBA, Vice President and Chief Medical Officer, Aurora Medical Group
Dr. Stroud has operational responsibility for the 950-member Aurora Medical Group. In addition to more than 10 years in clinical practice as an obstetrician/gynecologist, Dr. Stroud has significant expertise is in the areas of physician recruitment and employment, physician compensation, medical group acquisition, and clinical program development and implementation.

If you are attending the ACPE Fall Institute in Tuscon, Arizona, we hope you will plan to join Lois and this distinguished panel on November 16 at noon in Canyon 1. Learn from them as they answer questions and share their expertise on today’s most important compensation issues as revealed from your responses to the 2009 Physician Executive Compensation Survey by Cejka Search and the ACPE.

Want more information? Read the article discussing key findings from the 2009 Physician Executive Compensation Survey by Cejka Search and the ACPE in the November/December 2009 issue of the Physician Executive Journal. Or, visit www.cejkasearch.com/acpe for survey highlights and to purchase your copy.

Hot off the press!

Lois Dister, Executive Vice President and Managing Director, was quoted today in the article "Why are More Hospital Executives Pursuing M-degrees?' which was published on HealthLeadersMedia.com.

The article discusses one of the key findings of the 2009 Physician Executive Compensation Survey by Cejka Search and the ACPE - namely that one-third of physician executives surveyed have a post-graduate business degree including an MBA, MMM, MPH, or MHA.

Read it here: http://www.healthleadersmedia.com/content/240972/page/1/topic/WS_HLM2_LED/Why-are-More-Hospital-Executives-Pursuing-Mdegrees.html