The Changing Landscape of Recruiting Physicians to Your Practice - David Cranford

The Changing Landscape of

Recruiting Physicians to your

Practice

Presenter

David Cranford, CPA

Principal, Decosimo

Contact:

[email protected]

423-756-7100

www.linkedin.com/pub/david-cranford-cpa/2/357/72b

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Overview

Why do physician join practices?

What matters to them

Residents vs experienced

Replacing a position (ie retirement)

Conclusion – Questions & Answers

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Reasons Physicians Join Practices

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Financial

• Assured a steady paycheck

• Income guarantees and sign-on bonuses

• Benefits

• Paying off medical education debt – Average of $140,000

• Start-up capital provided from the group or hospital

Lifestyle

• Work/Life Balance

• Time off

• Sharing Call

• Family

• Geographic Location

Reasons Physicians Join Practices

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Positive Group Dynamics

• Access to patients and cases

• Mentoring and clinical support from experienced partners

• Focus on patient health condition they want to specialize

• Flexible work options

• Being included in group managed-care contracts

• Coding and billing procedures are established

• Favorable malpractice coverage

• Access to technology

Reasons Physicians Join Practices

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Physician’s want to Avoid:

• Financial uncertainty of operating their own practice

• Medical uncertainty of operating their own practice

• Many do not have the skill set needed to manage practice themselves

• Administrative time required to run the practice

• Managed care contracting

• Keeping up with government regulations

Deciding Factors

25-Year Perspective

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2012 2007 1987 1 Overall Lifestyle of

area Overall Lifestyle of area Hospital Facilities

2 Potential Income Potential Income Potential Income

3 Immediate Income Immediate Income Overall Lifestyle of the Area

4 Flexible/Fewer Work Hours

Less Call Rotation Not on Survey

5 Less Call Rotation Favorable Malpractice Rates

Not on Survey

6 Desirable Partnership Flexible/Fewer Work Hours

Not on Survey

*Jackson & Coker Industry Report – September 2012

Deciding Factors

25-Year Perspective

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2012 2007 1987 7 Spouses’ Preference Climatic Condition Spouses’ Preference

8 Hospital Facilities Recreational Opportunities

Climatic Conditions

9 Favorable Malpractice Rates

Preference for Urban/Rural Location

Desirable Partnership

10 Climatic Conditions Contact with Other Physicians

Contact with Other Physicians

11 Recreational Opportunities

Spouses’ Preference Recreational Opportunities

12 Contact with Other Physicians

Hospital Facilities Immediate Income

*Jackson & Coker Industry Report – September 2012

Other Changes…

• Physicians are more mobile than ever – physician turnover was

6.2% in 2008

• 38% of all physicians are 50 years or older

• Of the 21,000 cardiologists, 75% are over 45 years old

• Physician’s are in demand – Estimated shortage of 85,000 –

200,000 physicians by 2020

• 85% of hospitals are recruiting physicians

• Due to the aging physician workforces, an estimated 23,000 are

expected to retire or leave the practice of medicine. The number

of physicians graduating from medical schools has remained

stable at 16,000 since 1980.

Deciding Factors

25-Year Perspective

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Competitive pay to experienced partners

“Controlled lifestyle” with generous time off

In high demand

Younger physicians work 10% fewer hours

Per the AMA, > 50% of U.S. medical resident

graduates are female

• Female physicians work 18% fewer hours

Younger Physicians

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Focused on developing skills rather than sacrificing

for an extended partnership track

• Time-to-partnership – Two years and decreasing

• Unwillingness to buy-in to a Practice

Willing to relocate due to the spouse’s career

Tend to spend more time with patients

Want access to the latest technology

Have seen their parents or other adults laid off

• Skeptical of organization loyalty

Younger Physicians

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51% plan/want to leave the patient care setting or

reduce number of patients seen

8% plan to retire in three years

10% want to transfer to non-clinical job (teaching)

17% are considering closing their practice to new

patients

Many are going to part-time in groups – or locum

tenens

Experienced Physicians (Aged 50 – 65)

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Practices are also offering incentives for their senior

physicians to stay

• AMGA survey respondents – 62% believed that physicians were

delaying retirement because of the economy

• 73% of practices allowed pre-retirement physicians to reduce

hours

• 56% allowed for these doctors not to be on-call

• 20% allowed for specialization in the group

• Other options included extending vacations up to several

months

• Volunteer or mission work

Do Physician really retire?

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Physicians are frustrated

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Declining reimbursement

Business complexities

Overhead and cost of doing business high

Physicians are frustrated

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Denied claims

Appealed claims

Timely filing of claims

Program audits of Medicare/Medicaid

Physicians are frustrated

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Urgent Care Centers are taking non-chronic High Deductible plans are decreasing volumes

Managed care rates are not increasing

Practices are being excluded from managed care networks

Definition of working is changing

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Hospital employment

Single or multi-specialty practice owned by hospital or health system

Independent contractor or locum tenens

Non-clinical teaching position

Non-clinical administrative position

Immediately, costs go up for the remaining

physicians

• Fixed costs remain

• Debt service remains

• Production can do down for the practice

Difficult choices are required

• Closing offices

• Cutting staff

• Cutting other staff

Transition to recruiting a physician

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Cost of tail coverage – can be $100,000 for a

specialist in high cost region

Legal and financial obligations follow (debt related

to recruitment, excess office space, rental

agreements, etc.)

Operating loss while new physician builds practice

Loss of patient referrals

Patients needing a new physician – who may not

stay with the group

Impact of the loss of a Physician

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Recruiting replacement physician results in lengthy

and expensive process

Recruiter expense

Site visits

Relocation

Sign on incentives

Salary guarantees

Office set-up costs

Recruitment is a expensive

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Clear understanding of compensation

Strong, perceptive physician leader of group.

Mentoring recent graduates is critical to their

success and fitting into the practice group culture

Commitment to organized and structured meetings

and being engaged and making contributions

Be Transparent – disclose everything that would

impact the physician finances or work environment

Give them a voice on decision making

Well managed Practice with productive staff

What can you do?

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Questions

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Thank You!