How Medical Directors Survive In a Tough Job Market

In a marketplace fraught with downsizing and restructuring, many top administrators find themselves having to change careers.


When Anthem purchased HMO of Colorado and HMO of Nevada as part of a larger deal, George Kandel, MD — the plan’s longtime CEO and medical director — retired from the Blues for the second time. He then began spending one morning a week at a coffee shop with other health plan medical directors between jobs.

Abbie Leibowitz, MD, followed a similar tack when Aetna reorganized its management and the direction of the company in 2000. Once Leibowitz knew he would be leaving his post as chief medical officer at Aetna, he began brainstorming new business ideas with former colleagues at weekly coffee meetings.

The former medical directors eventually became entrepreneurs, helping to launch companies that fill certain gaps they identified in the health care system. Kandel’s firm, Denver Management Advisors, helps self-insured employers edit claims and avoid overpayment, saving them millions of dollars. And Leibowitz’s company, Health Advocate, links nurse advisers with individuals who need help finding health care resources and understanding their benefits.

Changing directions

As health plans consolidate and restructure in response to declining enrollments and rising health care costs, many managed care medical directors are finding themselves in the position of having to redirect their careers. Physician executives who have been laid off or have decided to change jobs have launched new businesses and taken on consulting work; they’ve accepted administrative roles at group practices, hospitals, and health systems; or they have returned to practicing medicine. Some have found jobs at other health plans, sometimes in expanded or newly specialized roles.

“Health plans have found that medical directors are very expensive commodities, and there is an attempt right now to consolidate the processes that require the services of a medical director in order to contain costs,” says John C. Beeson, MD, MBA, a former health plan medical director who is currently vice president for medical affairs at St. Mary’s Hospital and Regional Medical Center in Grand Junction, Colo.

It’s a tumultuous time in health care, and many insurers are cutting jobs — including those of physician executives. Cigna, Aetna, and Humana all have initiated major restructuring efforts. Today, Aetna employs 102 physicians; Leibowitz says at one time he managed 350 medical directors. Humana will cut 2,300 jobs this year, affecting about 17 percent of its employees.

Some insurers have cut more than 30 percent of their medical director positions, says Patricia French, founder of the French Group, an executive recruitment firm that specializes in health care.

It’s the toughest job market for health plan medical directors that anyone can remember. “I’ve never seen anything like it,” French says. So many good health plan medical directors are looking for work that French rarely checks her database anymore for candidates when a prospective employer calls. “If somebody were to call me today and say they needed a high-level physician executive, there would be at least a dozen people off the top of my head that I could present within two minutes,” she says.

Jobs are still available, especially entry-level positions, but physician executives often have to endure longer searches and go on more interviews than ever before when they are seeking top positions, French says. More training and experience are also required to win jobs.

Risk of being fired

For physicians, careers in health care administration are nowhere near as secure as practicing medicine. The risk of being fired is 20 to 40 times as high for physicians in health care leadership roles as it is for clinicians, who face a 2 percent or less chance of being dismissed from a job, according to a survey by Howard L. Kirz and the American College of Physician Executives.

Kirz polled ACPE members about job terminations in 2000. Of 620 respondents, 47 percent said they had been fired at least once during their management careers. That risk is increasing, Kirz found. Sixty-seven percent of reported firings during the previous 20 years had occurred from 1996 to 2000. Twenty-six percent of the terminations occurred at health plans.

While the job market for health plan medical directors is shrinking, it also is changing in ways that could offer new opportunities to physician executives asked to stick it out, health plans and recruiters say. Managed care plans are recasting the role of medical directors, creating more centralized customer service call centers, which medical directors oversee, and placing physicians in companywide positions such as managing disease management programs and contributing to sales and product planning.

Historically, medical directors have predominantly been involved in utilization review and benefit determination as well as care management and care facilitation, says Andrea Gelzer, MD, MS, vice president for health policy at Cigna, which employs about 100 physicians. A focus on consumer education has broadened the role of Cigna medical directors, Gelzer says.

Field medical directors in more than a dozen locations across the country work with Cigna’s clients to look at claims data and customize wellness programs for their employees, for example. Medical directors also work on quality initiatives and hold specialized corporate positions, such as Gelzer’s in health policy development.

Cigna has streamlined its prior-authorization process and is doing less utilization management overall. Medical directors continue to oversee those functions and other benefit decisions, though they do so through five consolidated care centers, Gelzer says.

Shifting resources

“In addition to medical management activities, our clinicians are integrated into every aspect of the business — sales, service, product development, account management,” she says. “We are shifting resources from utilization management, and we’ve tried to eliminate work for medical directors that doesn’t add value.”

Similar changes are occurring at Aetna and throughout the industry, says Joseph Cheek, MD, head of national patient management at Aetna. The insurer is using medical directors “more smartly than we have in the past,” Cheek says. Physicians are no longer involved with day-to-day contracting issues, for example. And they are not on the end of a phone answering questions.

Some of Aetna’s physician executives remain in generalist roles, but with more support, Cheek says. Others have been tapped for projects that take advantage of their special skills. Physicians led a recent effort to improve the company’s transplant network and launch new quality programs in that area, he adds. Medical directors also are tapped to identify data that physicians can benefit from and will be called on as Aetna continues to roll out consumer-focused benefit programs, to help network physicians think more about customer service, Cheek says.

In addition to new roles within health plans, medical directors are considering work in other areas, recruiters and former medical directors say. The technology and Internet jobs that were available to physicians several years ago have dried up. But opportunities in other growing businesses, such as stand-alone medical management companies that provide outsourcing services to health plans as well as start-up companies like Health Advocate, will be hiring medical directors, says Leibowitz.

Medical directors who have learned administrative and operational skills in health plan jobs can easily transfer those abilities to positions in other health care environments, says Lois Dister, senior vice president and managing principal at Cejka Executive Search, the recruiting company.

Physicians who have been laid off by health plans often look at the experience as an opportunity to branch out, she says. “Physicians need to take an inventory of what they’ve learned and begin to define themselves as physicians, but also as businesspeople. The market is very bright for physicians in administrative roles,” she says. “There are opportunities within managed care and outside of it.”

Health plan medical directors also have been moving back to the provider side, taking on administrative positions at group practices, hospitals, and health systems, where roles have been changing, too.

“The vice president for medical affairs at a hospital used to be a figurehead, with someone being appointed from within an organization. But now that is very different,” French says. “The job is more operational and very attractive to physician executives.”

Experience counts

As employers search for talent to fill top jobs, they are increasingly looking at experience and advanced training and degrees, French and others say. Good communication skills also are key, Cigna’s Gelzer reports. And organizations are especially interested in a physician executive’s ability to manage resources and budgets effectively, says Howard Horwitz, director of professional development at ACPE. “Physicians who are skilled in that area and can motivate the medical staff to also be good in that area seem to be in demand and tend to succeed,” he says.

Physicians considering a move to the administrative side of medicine — and those already working as medical directors — should get their resumes in order and plan for the future, French advises. “Physicians should put together a career plan before they absolutely have to have it,” she says. “That way, when they get a call, they can seize the opportunity, because the competition out there is quite fierce.”

MargaretAnn Cross is a freelance writer in Ann Arbor, Mich. She specializes in health care.

Abbie Leibowitz, MD

Chief medical officer, Health Advocate

In the beginning, there weren’t a lot of rules,” says Abbie Leibowitz, MD, of his early 1970s involvement with the fledgling HMO of Pennsylvania, which became US HealthCare and later merged with Aetna. A new pediatrician then, Leibowitz helped define physicians’ involvement in managed care as he joined the HMO’s committees and got to know its management. He took a part-time medical director position in 1984 and left practice in 1987 to become a full-time medical director.

US HealthCare promoted Leibowitz to chief medical officer, and he accepted the same post when the company merged with Aetna. In 2000, as Aetna reorganized, Leibowitz left. At first, he followed a passion for electronic medical records and accepted a business development position with Medscape, an Internet-based health care information company. When the company faltered, he helped divide and sell its assets.

Maintaining an entrepreneurial spirit, Leibowitz helped launch Health Advocate in late 2001. The West Conshohocken, Pa.-based company serves as a resource in the same way a health care practitioner often helps friends and relatives navigate the health care system, Leibowitz says. So far, 140 clients — including large and small employers, unions, and government agencies — offer Health Advocate’s services to consumers. The company assists clients with clinical care issues as well as billing problems, and the nurses who answer phones are backed up by medical directors.

“There will always be the opportunity for clinically experienced physicians to contribute strongly to the world of patient care outside of the traditional practice environment,” Leibowitz says.

Kevin Roache, MD

Medical director, Ochsner Healthplan of Louisiana

Being in a marketplace that is chaotic and volatile has a sense of excitement,” says Kevin Roache, MD, who recently accepted the position of medical director at Ochsner Healthplan of Louisiana after a job hunt that spanned several months. “It certainly makes you want to do the best you possibly can, and certainly you never want to become stagnant or so secure that you aren’t prepared for whatever happens.”

When Roache, a gastroenterologist, set out to find a new job last year, prospective employers appreciated his eight years experience as a group practice administrator, his graduate degree in medical management, his additional leadership training, and his experience teaching and consulting. Still, in each job he competed for, he was up against others with backgrounds just as strong, he says.

The field today is full of challenges, he stresses. After accepting one job and then finding that the company was not somewhere he wanted to be, Roache returned to clinical practice for a short time.

“The interview process can be incredibly painful because it can take six months. That is an infinity when it comes to the recruiting process,” he says. “You cannot keep up the pace of applying for positions.”

Many senior-level physician executives are turning to recruiters who know the marketplace and can assist them, as he did, Roache says. Recruiters should be ethical and on the cutting edge when it comes to knowing the field. They should take the time to get to know you and your goals. And they should not present you with jobs that aren’t a good fit, Roache says. Roache accepted his current job based on its local ownership, the strength of the management team, its success, and the potential for career advancement.

“It’s a difficult marketplace,” he says. “I predict that we will see physicians becoming less and less enamored of physician executive life. That’s what I’ve seen from my peers. They aren’t happy or secure in their positions.”

John C. Beeson, MD, MBA

Vice president for medical affairs, St. Mary’s Hospital and Regional Medical Center

Colleagues elected family physician John C. Beeson, MD, MBA, to his first administrative position while he worked at the Cherokee Nation Hospital in northeastern Oklahoma and spent time trying to update its emergency department. ”

I missed a meeting and became assistant chief of staff one day,” he explains. “They said, ‘He’s good at paperwork,’ and voted me in.”

Beeson, who later took on the position of chief of staff at the hospital, helped build a five-county ambulance service, worked on outside provider contracts, and streamlined a process for distributing general allotments of money for care — and he was hooked. “I decided to pursue the administrative route,” he says.

Accepting a position as an associate medical director for FHP Health Care in 1993, and later as a medical director with the company, Beeson learned about finance, organizational structure, and relationship-building with physicians. After several years, he moved on to Cigna as a regional medical director and then became the vice president and national medical director at Schaller Anderson, which runs Medicaid health plans in seven states.

Beeson recently returned to the provider side of health care and is now vice president for medical affairs at St. Mary’s Hospital and Regional Medical Center in Grand Junction, Colo. The experience he gained working for insurers has been invaluable in his new position, especially in dealing with health plan medical directors on issues such as payments and discharge planning.

As health plans redefine the role of medical directors, however, Beeson worries that relationships between providers and insurers could suffer.

“When I first went to FHP as a medical director, I had three or four hospitals that I covered. I got to know those physicians, so I could solve problems quickly. That had a lot of value. As health plans pull back and centralize these processes, it’s just going to be someone on the end of the phone, and that is going to damage relationships. It is going to be less expensive, but it may impact quality of care.”


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