How to Determine Compensation for Medical Staff Leaders

Liz Jones , April 22, 2010

"If it looks like a payment for referrals—meaning that the real reason they made this person the medical director of a service line is to buy his loyalty and patients," says Callahan, "you are arguably violating these federal statutes."

To determine fair market value, medical staffs and hospitals should start by estimating how many hours a leader would need to dedicate to his or her post. "It isn't uncommon for people to say that the value of these administrative services is between $100 and $150 per hour," says Callahan. But this simple calculation may not be enough. Callahan suggests reaching out to other hospitals in your area to find out what they are paying their medical staff leaders. Most hospitals are curious whether they are on the same page as their peers and are willing to share such information, he says.

Who's going to fork over the money—the medical staff, hospital administration, or both? Hoppa says that traditionally, hospital administration has funded the stipend because it wants to ensure that the medical staff has leaders who can carry out their board-delegated duty to promote high quality care. However, some medical staffs feel uncomfortable with that arrangement because they are concerned that medical staff leaders who receive money from hospital administration will act in administration's best interests rather than the medical staff's.

But it might not be as financially sound for medical staffs to compensate leaders rather than the hospital. To afford medical staff leaders' stipends, many medical staffs must increase their annual dues or divert dues away from other purposes, such as the medical staff library or scholarships for up-and-coming physicians. "What we are seeing more often than in the past is that it is a shared responsibility. The hospital puts in half and the medical staff puts in half," says Hoppa.

Liz Jones is an associate editor with HCPro, Inc. She writes Medical Staff Briefing, Hospitalist Leadership Advisor, and Credentialing & Peer Review Legal Insider. She can be reached at

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