Health care organizations increasingly are integrating physicians through employment and acquisition opportunities to build scale and lay the foundation for new clinical delivery models. As this occurs, physician expenditures will become a more significant portion of many organizations' operations. Concurrently, organizations have to balance increased competition within the physician labor market with complex regulatory requirements. As a result, executives and board members must cautiously navigate through this environment. Proactive physician compensation planning, education and the adoption of governance best practice approaches are critical.