Department Growing Pains: Transparent or Not

How to grow and align a surgical department: Is transparency good or bad?

A surgical department in a private hospital is going through changes. The department has grown from 5 to 12 and volume has increased accordingly. Along with this, there is a growing need for a department-wide business plan and mission statement to help drive continued quality and growth. At the center of this, physician compensation and departmental incentives have been central to surgeons concerns. The majority of the staff receive the same base salary with a standard percentage return of their surgical and clinical revenue.  However, there is a growing interest in changing the compensation structure while sharing the department’s financials as a group to help align departmental goals. This has been met with concern from some surgeons while others have been pushing for it.

  1. Should the department make this change to transparency? What are the benefits and what are the downsides?
  2. How transparent should the department be? Should they report only revenue or include how the department spends the revenue? Moreso do they report data as a group or break it down by service or should they break it down by the surgeon?
  3. Should you be transparent about salary and compensation for each surgeon?  A few surgeons have a higher base salary and there may be resentment from this. However, maybe this will be a driving factor for growth.


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Participant comments on Department Growing Pains: Transparent or Not

  1. Very challenging situation. It has really been surprising for me to find out at my current employment place in NYS how much the compensation transparency drives resentment. My advice would be to be transparent about overall financial situation-what comes in and what and how is spent, but NOT to the level of individual.

  2. I think every organisation should be transparant on the revenue and the spending at the hospital level. In our hospital this information is shared witje everybody. Within each department the level of transparency is left to the departmental leader. In my department we share all information down to the individual level. Most colleagues are highly competitive, so sharing the information, combined with the right controls, can be a very powerful driver for growth.

  3. In the time I have been leading a clinical department, I have wanted to bring greater financial transparency but have found it to be a double-edged sword. In my organization there are long-standing histories of inter-departmental transfers that can be difficult to explain. As a profit center, the notion that departmental funds may be used to offset deficits in other departments engenders anger and mistrust.

    With regard to salary transparency, I have seen it limit the ability of a manager to properly reward individuals who are overall high performers in arenas where their high performance cannot be demonstrated clearly with “metrics”.

  4. We have found that the factors affecting compensation are so complex, that unless a person wishes to serve on the compensation committee, then they only require generic information. Our basic compensation model is transparent, but there are exceptions, which are not revealed to the group as a whole. However, departmental budgets are shared, because it is important for physicians to have perspective on the organization as a whole. Many are surprised when they learn how tight our margins are.

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