The Physician Recruiting Marketplace, Part 3

As a member of the National Association of Physician Recruiters (http://www.napr.org/), I've recently had the privilege of seeing an article prepared by Tammy Jamison, a Senior Physician & Executive Recruiter with the Lehigh Valley Hospital & Health Network in Allentown, PA. Tammy's article is filled with statistics about the physician recruiting market. I'd like to share some of her well researched details with you.

Economic Pressures - Malpractice and Shrinking Take-Home Pay

Malpractice

Economic pressures such as the rising cost of malpractice insurance, increased practice operation costs and reduces reimbursements are impacting the financial stability of hospitals and practices, which is also negatively affecting physician recruitment efforts.

In the past decade, the cost of medical malpractice insurance has skyrocketed in many states, such as Pennsylvania. Some practices are letting partners go because their insurance costs are too high for the practice to absorb.

Due to the malpractice crisis, surveys of physicians in "malpractice crisis" states indicate that many physicians are now cherry-picking patients, others are considering early retirement or relocation, and still others are practicing litigation-avoidance medicine (ordering extra tests, etc.) Additional studies show that due to their fear of being sued, physicians are choosing to work in states with the most significant liability reforms.

Increased Costs

Liability insurance is only one of the expenses that have been increasing for hospitals and practices. According to MGMA, practice costs have risen at an average of 6.5% annually for the last ten years, and median operating costs are now 60.2% of gross revenues, up from 54.4% in 1992. Increasing practice expenses are eroding physician incomes, and due to labor shortages of nurses and other professionals, practices are being forced to pay their staffs more than budgeted in order to attract and retain staff members.

Solutions to Recruiting Challenges

Education

There is little that hospitals and practices can do to affect the shortage of physician candidates other than to support efforts to increase the number of medical student and residency positions, and to support the elimination of the Medicare GME cap. However, physician who are educated about the reality of the physician marketplace are more likely to be successful in recruiting than those who are unaware of some of the current dynamics.

What employers can do is enhance their recruitment processes to increase their likelihood of being successful. Employers must figure out how tot get the attention of potential candidates through diverse and comprehensive recruitment approaches. They also need education about what today's workforce looks like and responds to then them they must adjust their approaches and attitudes based upon those learnings.

Successful recruitment requires planning and commitment. The earlier that physician needs can be projected, the better an employer's chances of being successful in recruiting new physicians. Employers must also commit time and money to the search process.

Getting Candidates' Attention

Recruiting efforts are more likely to be successful when the positions are well defined, the expectations and compensation are fair, and sufficient time and resources are allocated to the search process. Recruiting campaigns must be diverse in order to reach the widest possible audience, and must include Internet advertising, print advertising, direct mail and networking. Recurring budgets will very based upon the type and degree of difficulty of the search, with more difficult searches often requiring more time an resources.

Since the competition to get the attention of good candidates has increased exponentially over the past ten years, it is important that recruiters determine what methods young physicians are using to seek positions, and utilize the most effective ones.

Being Competitive

While employers must first get the attention of potential candidates, the next hurdle is to "land" the candidate, and that involves making a competitive offer. This includes not only cash compensation, but also benefits and recruiting incentives.

It's also important that employers know which recruiting incentives have become common place. A 2005 review of physician recruiting incentives reports the following:

99% are offering relocation in an average amount of $8,850

46% are offering signing bonus' in an average amount of $14,030

14% are offering education loan repayment as a benefit

According to an independent study conducted in 2004 for the New England Journal of Medicine that asked job seekers to rank benefits and incentives by degree of importance, malpractice was the most important benefit, followed by signing bonuses, CME time allowance, disability insurance and education loan forgiveness. Primary care physicians and specialist diverged on priorities. Loan forgiveness and CME expenses were more important to internists, while subspecialists valued relocation expenses an disability insurance. As one would expect, education loan forgiveness is important to physicians who are 35 and under while physicians who are 41 and older place a greater value on disability insurance.

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Paying attention to the competitive landscape is crucial for hopeful physician employers as they seek new hires. Being aware of the candidate's expectations and being willing to work with them on their "hiring priorities" is a key step in being successful.

More of this to come.

Happy and healthy hiring.

Lynden