May 14, 2026
Driving Leadership Excellence and Unlocking Millions in Cost Savings
As health systems grow, clinical physician leadership structures often evolve organically – which isn’t always effective.
In one health system we worked with, more than 1/3 of employed physicians held leadership roles…yet unclear expectations, limited support, and fragmented decision-making created inefficiencies and frustration.
How can your organization ensure leadership roles drive value and not greater complexity?
See how we helped a 7-hospital system, including a children’s hospital and 8 outpatient clinics, to redesign a clinical physician leadership structure and identify millions in cost savings!
Phase 1: Quantifying the Opportunity and Readiness for Change
Challenges
- Organic growth created multiple leadership roles with minimal work effort
- Failed merger attempt prompted the system to identify opportunities to improve financial performance
- Physician and APP unionization
- Cumbersome decision-making and approval processes created friction
- Growing distrust of leadership among physicians
- Lacked standardization and consistency
Findings
- Over 1/3 of employed physicians held a leadership role
- Administrative compensation benchmarked below the 25th percentile of the market
- Insufficient leadership time allocation relative to actual workload and administrative tasks
- Lack of clear accountability, expectations, and data transparency for most medical directors
- Lack of investment in leadership development or administrative support
Outcomes
- Identified key themes relating to role definition, effectiveness and efficiency
- Identified savings opportunities of 6-15% of the total non-clinical inventory provided, equating to $1.7M-$3.5M in cost savings
- Reductions and eliminations were implemented to ensure physicians work at the top of their licensure, generating additional savings
- Identified opportunities to redesign physician leadership structure
- Engaged key stakeholders who committed to the transformation
Phase 2: Redesigning the Structure for Leadership Excellence
Request
- Create additional elimination and reduction through consolidation and restructuring of clinical leadership
- Refine the cost savings and revenue enhancement expectations
- Involve a wide scope of stakeholders to participate in the development of key areas of the project
- Create a standard, market-based compensation plan for physician leadership
Approach
- Utilized quantitative and qualitative analyses to facilitate concurrent workstreams
- Operations and Administration:
- Review of job descriptions and employment agreements
- Market assessment
- Stakeholder interviews/focus groups
- Change diagnostic
- Structure and Culture:
- Defined excellence to establish a leadership mission, vision, and guiding principles
- Determined leadership duties and RACI for each role
- Drafted job descriptions for each role
- Compiled organizational charts
- Created compensation and effort rubric
Outcomes
- Defined leadership mission, vision, guiding principles, and leadership qualities
- Conducted market assessment, identifying physician leader revenue opportunities, and alignment between productivity and compensation
- Updated leadership rubric and job descriptions for physicians and APPs, clarifying roles, responsibilities, time allocation, and market-aligned compensation
- Identified projected cost savings of $8.9M (30% of leadership spend), with opportunities for reinvestment, as well as $2.3M in additional revenue enhancement and 24 FTEs (20% reduction in total leadership FTEs) through transitioning leadership to clinical effort
- Completed change diagnostic and developed an implementation roadmap outlining readiness, risks, next steps, and required investments
Is it time to reassess your physician leadership structure?
SullivanCotter partners with health care organizations to streamline their clinical leadership structures efficiently and cost-effectively – creating measurable return on investment while strengthening governance and performance.
