Houston CPA and blogger Reed Tinsley posted a short note today on the role of the managing physician in a practice.
Practices are often two headed creatures – there is the managing physician, and there is the administrator. The two frequently overlap, as decision by the administrator will effect how the physicians work during their day. A successful relationship requires a great deal of collaboration and planning, particularly when changes are going to be made. Since the physicians are the owners of the practice, they are naturally going to be protective of someone else running their business and making decisions.
In most practices, particularly ones on the smaller side (fewer than 25 physicians), the managing physician is likely to be both a practicing clinician as well as setting aside time for their administrative duties. Here are the roles that Tinsley sees for this person:
1. The basic role is to address issues that arise but do not require the approval of the entire group, or Board.
2. Be available to make minor day to day decisions (ex. buying a piece of furniture).
3. Reviews and signs all disbursement checks.
4. Be the administrator’s direct contact in matters that he or she needs answered in between board or shareholder meetings.
5. Handles physician to physician issues within the group.
Typically, the managing physician will be elected by the shareholder physician for a term of one to two years. I recommend at least two years, to allow the person to gain some experience in the role and provide some stability. Your practice may allow for re-elections. In this case, it is generally a good idea to have a “term limit”, perhaps of six years before requiring that a new person steps into the role. Particularly when there are only a handful of people who can serve in the position, term limits are the only means of insuring that power will not become concentrated in one person, even by default.
The position of managing physician may be different than the president of the practice corporation. The managing physician is an operational role, running the business and the practice on a day to day basis. The president, on the other hand, is more akin to a chairman, dealing with corporate issues.
Governance is one of the most difficult issues for practices to deal with. Before going into practice, the physicians must work out how decisions will be made, and work with an attorney to complete a shareholder agreement.