Consider This Well-Compensated Career – 323

In today’s podcast, John shares invaluable insights on the critical areas of expertise for physicians seeking hospital leadership jobs.

John recounts his transition from a clinical role to leadership within his hospital. Like others, his transition started with physician advisor and medical director roles, which provide management experience.

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Transitioning from Physician to Hospital Leadership Roles

Transitioning from a physician's clinical role to a leadership position within a hospital system is a significant and rewarding shift. It begins with clinical-administrative roles within the hospital, such as medical directorships. These roles offer valuable management and administrative experience and a bridge to more senior leadership positions.

As physicians move through these roles, they encounter a dynamic shift in responsibilities and gain a deeper understanding of healthcare systems. Through this transition, responsibilities shift to greater leadership responsibilities. These administrative positions often involve advocating for colleagues and patients, while enhancing healthcare delivery at a community level.

Key Areas of Expertise for Hospital Leadership

Several broad areas of expertise are considered critical for physicians transitioning into hospital leadership roles. They cover the skills necessary to lead and manage effectively in a healthcare setting:

  1. Leadership Principles
  2. Data Management
  3. Business Management
  4. Talent Management
  5. Quality Improvement


John shares his transformative journey from family physician to hospital CMO. He explores the advantages of hospital leadership roles, where to start as a medical director, salary expectations, the impact of your medical specialty, and the crucial areas for developing new skills.

John also extends an invitation to listeners to explore the NewScript 2023 Nonclinical Career Summit, presented in April, offering all 12 lectures with Q&A sessions for a reduced price of $199, with a special discount for NewScript members. Join NewScript at to unlock this special discount and access a wealth of nonclinical career insights from our 12 expert presenters.

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Transcription PNC Podcast Episode 323

Why Hospital Leadership Jobs Are Both Challenging and Rewarding

John: This is what I'm talking about - Roadmap from Physician Advisor to Hospital CMO. I am going to first start by telling you my story. It seems to be a good way to start these presentations. I was a family physician. I joined two other physicians. We were in a private practice. They had full practices. I had no practice when I joined them. I had to grow my practice during that time. And as a result, I had some free time during my first two, three years of practice. And so, I looked for things to do that really was more to make some extra money. It was like moonlighting. I would work at the family planning clinic and I would work over at the local college health center. I worked in the STD clinic at the health department. And so, I got involved in other things as I was growing my practice.

And as a result of doing those things, I was often asked to become the medical director because the medical director that was there would leave, for example, the family planning clinic had a gynecologist and they got busy and so they left. And okay, I thought I would do that. And I got paid for doing it.

We had an occupational medicine clinic. Again, I started working there to make some extra money and lo and behold, they needed a medical director for that. So I thought I'll do that. I was learning as I went, and over time I became comfortable doing those kind of things. I actually kind of liked it.

Then as I got further into my career, 5, 10, 15 years in, we were all doing everything OB, pediatrics, working in the nursery, nursing home patients, routing at two hospitals. And we did cut back over time. But I found as I got into the stretch of my family medicine career became rather tedious. I had episodes of burnout and frustration. That was a time when things were changing and they were ramping up the tightening down on payment by Medicare, which continues to this day. And so, it seemed like we were doing more and more work rushing patients through, as many of you have experienced.

And I just started to think maybe I should do something else. One of the things I did in that timeframe, I was tended to say "yes" to most anything, and they needed someone to join the CME committee. I liked planning CME and providing it to my colleagues. I had done that as the chief resident at my residency.

And then when I came to my practice, I got the Illinois Academy Family Physicians involved, and they had a program where we could bring in speakers and continuing the CME for our colleagues. So I liked doing that. And then the chair of the CME committee left or he got sick or something. And so, then I was the chair. And then within six months of doing that, we were surveyed for our accreditation. So I had to learn all about that. And I guess we did well enough that the Illinois State Medical Society asked if I would join the CME committee that did the accreditation for the state, which is delegated by the ACCME. And I thought, okay, I'll do that.

And after being on that committee for a couple of years, I became the chair of that committee, all to say that it just gave me a lot of experience in running meetings and following agendas and communicating and working with people and meeting deadlines and all the different things that we don't necessarily do as physicians.

And so, at one point, I was really getting burnt out and I went to the CEO of my hospital. I said you don't have an executive level physician here. You don't have a VPMA, which was a big thing at the time. You didn't have a CMO. And so, I asked for a job and basically was given the job as a part-time VP for medical affairs. And I grew to really enjoy that job.

Now, part of the reason I'm telling this story is one of the first things I want to do today is what our other speakers have done, explain to you the pros and cons of this job because I talked to many of you when you have questions about non-traditional and nonclinical careers.

And one of the things that I find is that the last thing you want to do is to be around the hospital. It left a bad taste in your mouth because it's the administration of that hospital or a large system that employs you in a large group. It's part of this sometimes multi-hospital system. You feel like you have little control, you feel like you're being abused and you just want to get away from it.

I have found that while I thought my work was really good, and I'll get into that, what I actually did as a CMO. I want to just spend a few minutes talking about why you should consider it, and that's going to be on my first stop. But it leads into another story, and that's the story of one of the physicians. And when I was the VPMA and then moved into the senior VP and CMO role, eventually I was responsible for the medical group that we were growing.

It was very small when I started, but by the time I left, we had 80 physicians and another 40 PAs and NPs. And one of the benefits of me being the chief medical officer is I could really stand up for our physicians. I had an internist who was a geriatrician who was generating a lot of RVUs and the CFO had it in his mind that we really shouldn't pay that physician the same rate per RVU, which hopefully most of you understand, that's kind of how physicians can be compensated in certain contracts.

And in any event, he was doing the work of one and a half internists based on the population that he had, and he wasn't getting paid for it. When I took over the management of the group, over a period of five years, he got two significant raises because I got his RVU compensation rate brought up to the rest of where the rest of our colleagues were.

And so, that's the first big pro for me is that if you're in a position like this, you can advocate for your colleagues, you can advocate for your patients, and you can be the counterbalance to decisions that are made sometimes by the board, sometimes by the senior executive team to cut certain programs or to de-emphasize certain programs or to abandon certain types of patients because they're not lucrative. And when you're in a nonprofit hospital like I was and you're looking out for the community and for the patients, you have much more leverage in that position than as an employed physician or someone on the medical staff.

That's the first thing that I would think about in terms of why it's good to move into a position like this. There's other good reasons as well. And they're going to fall in the areas of leadership, income, intellectual challenges, and helping the community in different ways. That's kind of the way I look at it.

The title of this is From Physician Advisor to CMO. So, what are the jobs? I'm going to get into some of the jobs in a minute, some of the more entry level jobs, but let me just tell you what the higher end jobs are, where you get most of the benefits of working in the hospital system. That's where they accrue.

Obviously, most of us know what a chief medical officer does. We've maybe heard of chief medical information officer. Those are pretty common. But you've got chief quality officers. You've got chief clinical officers, which in many institutions, historically have been nurses. We've got chief patient safety officers, chief population health officers. The CMO can move on to become the COO, chief operating officer, or chief executive officer for that matter. And then there's even something called a chief patient experience officer, which sometimes is physicians in very large organizations.

There's a lot of good jobs, leadership jobs, high paying jobs in the healthcare system. The healthcare system is responsible. When we talk about mainly the hospitals part of it, approximately 25% of all healthcare dollars. It's the biggest chunk of money because we know that when people get ill at the end of their lives, they spend a lot of money. And that means there's a lot of jobs and there's a lot of jobs for physicians.

I mentioned salary. The average chief medical officer in any size hospital is going to make typically well above $300,000. It's not unusual for a CMO, especially one who's more seasoned to make $400,000 to $600,000 or $700,000. You can do your own research on this. You can try and find surveys that are difficult to find. Executive physician surveys. You have to pay a lot of money.

But you can go to something called, which is where all the 990 tax forms are put for nonprofit organizations. Every nonprofit organization has to report these things. And in those reports, they list the salaries of the most highly compensated members of those teams. Sometimes it's a board member, although most nonprofits don't pay their boards unless they're a big system. And then it's the CEO, the COO, the CFO, all those people. And usually you can go in there and look up the CMOs salary. There's less data available now because with a lot of the merging of different systems, you'll only get the top earners for the whole system. You might have six or 10 hospitals, but you might catch one CMO plus the CEO, the CFO and some of the board members.

But you can do that. Find a small community hospital or a medium sized community hospital near you that's a nonprofit, and go in there and just look up their salaries. They're published there every year. is free. If you want to get more up to date report, you have to pay, but it doesn't really matter because the salaries don't change that much. So, it's a very good, well-paying job.

Now, as far as the intellectual stimulation, if you've worked in a hospital setting, I'm sure you've come across all kinds of challenges that would be very interesting to work on. Usually you don't have time, you got to get back to the office, you got to get back to the OR, you got to go to the ER. But some of the areas where physicians are really important, and you see this on the medical staffs because they ask you to get involved, but everything from quality improvement, patient safety, you learn about sentinel events and root cause analysis, lean process improvement, protocol development, top 100 hospitals, leapfrog, CMS hospital compare, health grades. It's all in the realm of quality improvement. It's all very important and it's interesting.

And we all have a background in epidemiology and statistics. We learn that in medical school, sometimes in residency. We know what quality is. We've been on different committees. I think it's very intellectually stimulating. Then you've got clinical documentation integrity, utilization management and length of stay, case management. I was always involved in the pharmacy formulary decisions and medication errors and how to minimize those.

Informatics has been huge in the last decade in growing. And healthcare law because you got the regulatory, you got to deal with the DOJ, CMS regs. And then there's the contracting, which I really got into heavily during those last five years when I was in charge of the medical group for our hospital.

And I could pick and choose any of those to work on any given day. And they were all very interesting and mentally stimulating to me. And so, it's just fun to do those kinds of things. To me, seeing patients one after the other for a mundane problem, that worried well, the sixth influenza patient in a row, that gets boring. But there's so much more that you can get into in the hospital setting when you're dealing with some of these areas that they need physicians to deal with.

Now, I often get the question, "What are the best specialties for doing something in the hospital management, hospital leadership?" I actually get that question about other areas too, like UM, like pharmaceutical companies. Any number of jobs. What about nonclinical jobs? What specialties will have the best opportunities? And really what I usually tell people is it doesn't really matter. You can be in any specialty and do UM. You can be in any specialty and get through into pharma. Same thing in the hospital.

Now, the way that I went about it, and the easiest way to segue into a hospital management position is to be in the hospital. I wouldn't say that a dermatologist who's doing only outpatient or a pediatrician who hasn't set foot in the hospital in 10 years, probably would want to pursue something like this because they're not in that milieu.

But anybody else who's in that, whether it's full-time, you're an ER doc, you're a radiologist, you're another type of surgical specialty that's there several days a week, you're going to committee meetings, you're already participating on quality and pharmacy meetings and things like that. It's just a natural transition that you can make. And it does take time. And I'm going to go through the process that I would recommend you follow to do it.

But if you plan it properly, you can make that segue before you get too burned out, before you reach that point of no return where "You know what? I just can't step a foot in that place again." So, you want to do this, begin that process if you think it's something you consider a little bit earlier rather than later. Pretty much any specialty that's in the hospital.

Also, if you happen to be, let's say the managing partner kind of role, or the medical director for let's say a big medical group that's part of a hospital system, you could segue from that as well, because you're going to be going to meetings and rubbing elbows with the other leaders in that hospital system.

But in general, it's someone who's going to be in the hospital. Probably fewer family physicians these days than when I did it, because when I did it, I was in the hospital every day making rounds, going to committee meetings, and volunteering for some of those things. And then working, getting paid to do some of those medical directorships part-time. So, what are the areas that you need to learn as you're going from that physician advisor or even a medical director role into more of a leadership role?

Because the physician advisor role, really, you're not doing any management or supervision at all. Nobody reports to you. You just show up, look at charts, electronic medical records. You might call physicians. You might just approve things based on what you can find in the record and move on.

But when you get to a medical director role, now you're doing a little bit of management. You can be, and I'm going to list some areas where you can be a medical director, but now you're starting to get into that. And if you're thinking about that, let's say you're having a good time, you're working 20% time as a medical director, and you're thinking, "Well, I want to go further and I want to start to pull back on my clinical and increase my leadership", then these are the five areas you need to learn more about.

I get this from the AAPL, the American Association for Physician Leadership. I'm going to maybe talk really briefly in a minute about the CPE designation, certified physician executive. But the AAPL has a subsidiary called the CCMM, which puts out the CPE designation, and basically they describe what they feel are the five areas that we need to learn about as physician beyond the clinical that we know. So, it's pretty straightforward.

The first one is leadership principles. That one is a little bit nebulous, but it includes things like motivating people and persuading people. It includes things like understanding strategic planning and that kind of thing. And it's probably of the five areas, the least concrete, but you kind of know when someone's a good leader and not when they're good leaders. Most people now kind of follow the path of servant leadership where you're trying to create teams and motivate people and work together. If you have a little bit of charisma, or at least again, the ability to persuade people, that's a big part of it.

The second is what they call data management. Now, for us, that's usually quality improvement. Those are the data that we usually deal with. We already have some experience in that just from our clinical practice. We know that we're being measured usually in what we do. Most of us have been exposed to maybe some of the data that the hospital shares with us when we're admitting and discharging patients or when we're doing procedures.

And so, there are some part of data management spills over into financial management because finances are data too. But usually we consider that as separate. And basically what that is, just understanding basic accounting principles, maybe P&L, balance sheet. And for me, and for you, if you're going to be in a hospital setting, understanding hospital financial reports because they're unique, because of the way they're paid. You have your gross revenues, which is what you bill. Then you have your net revenues, which is sometimes up to a half of that. You can say some hospital has a gross revenues of $900 million, but their net revenues is closer to, let's say, $600 million. And then you have write-offs. These are just unique to the healthcare system. So you have to learn that if you're going to be a leader in a hospital.

And then you've got the business management part of it, and that is just the management skills that you need to motivate people. One of the biggest things I had to learn when I started moving up into that area, was all of a sudden now I've got three, four or five, maybe up to six or seven directors reporting to me.

Well, how do I interact with them and what's my role? It's a little different from, let's say, leading a team as let's say an ER doc in a code or leading a team in the OR or something. When you're leading a big organization, it's more of a vertical thought process. How are we going to help each other? How are the directors that are reporting to me going to work together to get our division working and moving in the right direction? It's understanding how to set goals, how to plan projects, and how to keep projects moving forward with timelines and deadlines. I would say that's an area that physicians need a lot of help with at first is in the business management sphere.

And then the last area, and it does overlap a little bit with the leadership and the business management, and that's the human resources, or you might call it talent management. That's when you're getting a little more into "How do you recruit people? How do you train people? How do you monitor their performance? How do you resolve disputes?" Those are all areas where most physicians have some knowledge, but not a lot. So you need to get more exposure to that, and you can do that by some of the ways I've mentioned already and then some that I'll mention shortly. I just wanted to point that out that you got to think about how you're going to get experience in those areas.

The other thing I like to remind physicians about is sometimes we can get pretty cocky. We're pretty confident people. We've had a lot of education, a lot of experience, and so we kind of feel like we know a lot and we do, but we don't really know everything about finances and business management and that sort of thing.

I think it's good when you're making this transition to be a little humble and just suck all the information, all the knowledge that you can from those around you. And they're happy to tell you and show you how to do things. They don't expect a physician moving into a new leadership or management role to know how to do that. We basically have 70 or 80% of the knowledge and the skills to do the job, but that last 10, 20, 25%, we have to sometimes learn on the job, even going to classes and courses.

Getting an MBA doesn't really teach you day to day how to interact and how to work on a team because you have to do it. And that's where doing those things I talked about earlier about managing a committee, being the chair, leading meetings, leading projects. They may be ad hoc projects that just come up, you volunteer and then, oh, okay, you can be the chair and you help us get this thing done. We got six months to do it.

Where do you start as you're going on that path to that senior executive position? Well, the most common jobs that I have seen in the hospital setting are the ones I've mentioned already with a couple of others. They always need UM docs to do the physician advisor, but then someone has to lead that group, particularly if it's a large hospital. You can become a medical director in utilization management. Clinical documentation, integrity. It used to be called clinical documentation improvement. Every hospital has to have a CDI team. They have to. If you're not documenting properly, you're losing a lot of money. And the bigger thing is the quality of your care is going to be misrepresented.

Quality improvement. I talked to one of my guests who was a hospitalist. He was in a big organization, a big group of hospitalists working at multiple hospitals, and he had a halftime job as a medical director for quality just for the hospitalists.

Now most of the time, if you're going to get into quality improvement, you're going to be the medical director for quality improvement at an entire hospital. But if the system is big enough, then you can have even multiple medical directors and associate or assistant medical directors working just on quality, just on safety, just on informatics is another one. Those are the big four that are sort of not clinical areas that I have experienced people starting in.

I hope you enjoyed that excerpt from my summit lecture. All of the other 11 lectures were even more inspirational, informative, and educational. They were really excellent. One of the reasons I chose to present that audio today is that we opened up the all access pass for lifetime access to the NewScript 2023 Nonclinical Career Summit lectures last week at a special low price of $199. The usual cost is $249, and for that $199, you will have access to all 12 lectures, which also includes their Q&A. I think there's also some bonuses with the all access pass.

Now you can get an even better deal. If you're a NewScript member, the price is just $139 for everything, for a total savings of $110 from the usual price. If you're not a NewScript member, you still have time to join NewScript at And then once you're a member, you can use a special coupon code to get that $110 discount off the usual summit pricing.


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