Background: The present administrative and financial structures of clinical departments in most medical schools date back to the beginning of the 20th century when changes were brought about as a result of the Flexner report. Since that time, there have been significant changes in the health care industry that compel us to reevaluate our goals in order to meet the needs of the 21st century.
Methods: This paper proposes that we need to consider the administrative restructuring of our departments from the vertical hierarchical system to the horizontal matrix system in order to facilitate cost-effective use of our manpower as well as facilities. It also proposes a financial restructuring of the departments to cut the costs of billings and collections of the clinical practice, to develop a long-term program to raise departmental endowments, and to develop an effective incentive plan.
Results: A novel mechanism is proposed to provide "stock options" for the faculty. Such a system would reward academic and clinical productivity, retain productive faculty, and offer options for those who are not productive.
Conclusions: In order to flourish in the health care marketplace, academic programs must be willing to promote a change in the culture of the departments and adapt to a more business-oriented environment.