Reforming healthcare has been a priority in the United States for many years. A major part of that reform has been an expansion in the role and duties of physicians to include more management and leadership within the organization. This type of reform requires innovative changes in health science education programs. Traditionally, physician leaders were vice-presidents of medical affairs, chief medical officers, chief physicians, or head doctors. They served in advisory roles with limited responsibility and no financial authority and were unable to establish policies and make changes that systematically affected the administration and delivery of services within the organization. Out of necessity, the role of the physician leader has changed to include the following components: leading change efforts, managing care teams, integrating knowledge and resources to solve situational problems, fostering a team approach to service delivery, working collaboratively rather than individually, distributing knowledge, and working to improve operations and patient outcomes. This manuscript describes physician leadership and its goals, models of leadership, potential for cost reduction, information technology use, curricula, and organizational challenges in physician leadership programs. Additionally, the perceptions of physicians are examined following their participation in a six-month in-house leadership development program.