Learn from Our Search Consultants and Your Peers

Part I

By Jeremy Robinson 

What is the cost of a physician vacancy to a healthcare facility or to a community?    

    
At first glance, the answer to this question may seem obvious. Interview expenses, the cost of staff recruiting personnel and/or a search firm, and patients that are lost during the transition are some of the consequences of a physician vacancy that immediately come to mind.

 
However, several implications of physician vacancies are frequently overlooked, and often the total impact of a physician vacancy can be difficult to quantify. 

 
Will quality of care suffer as a result of the vacancy? What is the specific specialty worth to your organization? How much is being invested to recruit each position? What effect do vacancies have on the ability of an organization to form an ACO, a medical home or other integrated delivery models? What does each physician bring to the local economy? These and other factors may ultimately contribute to the total cost of a physician vacancy.
 

The Impact on Quality

Quality can be the most costly consequence of a physician vacancy and is of primary importance when considering the potential effects of a physician deficit. Continuity of care is the first thing to suffer when a physician is not in place as the medical team is without its “quarterback”. 

When a medical staff is short just one physician, everyone on the delivery team may feel increased pressure. 
 

Pressure to see more patients in less time, while continuing to maintain quality. Pressure to retain patients. Pressure to cover call more frequently. Pressure to maintain financial viability. Increased family pressure because more time is being spent at work and work is more stressful.  Referral patterns also may be interrupted causing a ripple effect throughout the medical community that may extend to mid-level providers and other clinicians. 

Patients often are on the receiving end of the pressure that providers are feeling. They can quickly become frustrated and question the quality of care provided when they feel they are not getting sufficient physician time or attention. 
 

Even the perception of a decline in quality can cause patients to migrate to competitors, influencing long-term referral patterns and ultimately impacting the specialty in question as well as other service lines and ancillary revenue streams.  With revenues impacted, reinvestment into the practice or the organization can become difficult and patients may move to practices that are offering more innovation and newer technology. In many cases, patients feel that they are receiving higher quality care when their physicians spend more time with them and a physician vacancy can make managing this perception nearly impossible.  
 

Physician Generated Revenue

As has been frequently observed, without physicians hospitals are nothing more than empty hotels. Physicians are the catalyst for the majority of revenue brought into hospitals, medical groups and other facilities. The most powerful tool in healthcare may be the physician’s pen, as just about everything in medicine, from patient admissions, tests, treatments, prescriptions, procedures and discharges begins or ends with a physician’s signature.

The Medical Group Management Association (MGMA) releases a report annually,  MGMA Physician Production and Compensation , which quantifies the revenue generating impact of physicians in medical groups per specialty. The following table shows collections figures for several specialties.  It is important to note that the figures shown below do not include technical charges or non-physician provider charges – they represent just the collections generated directly by the specialists listed. 

The financial impact of one physician vacancy does not lie solely within the department that is experiencing the vacancy – it is often felt across many different departments and teams. As noted in Merritt Hawkins’ 2010 Physician Inpatient/Outpatient Revenue Survey, physicians generate an average of $1,543,788 in annual, net inpatient and outpatient revenue for their affiliated hospitals. The figures cited in this report reflect both technical and professional charges, including a combination of net inpatient and outpatient revenue generated through procedures performed at the hospital, tests and treatments ordered, etc., and do not include indirect revenue that may have been generated from patient referrals to other specialists utilizing the hospital. 

As these numbers illustrate, one physician vacancy equates to thousands of dollars of missed revenue (both direct and indirect) – every day the position goes unfilled.

Physicians of every specialty drive significant ancilliary revenues for their affiliated hospitals. An interesting point to note is that the downstream revenue generated per dollar collected for each specialty varies greatly by specialty. For instance, the average neurosurgeon (the highest revenue-generating specialty) is responsible for $2,815,650 in annual net inpatient and outpatient revenue, and drives average annual collections of $939,873.  On average, for every $100,000 collected by the practice, a neurosurgeon generates $199,578 in additional revenue for their affiliated hospital. Interestingly, the average Psychiatrist (a far lower revenue-generating specialty than neurosurgery) generates more revenue per dollar collected than any of the specialties listed. For every $100,000 collected by a psychiatrist in the practice, $503,436 in additional revenue is generated for their affiliated hospital. The table below shows the correlation between revenue and collections for these specialties:

As the chart suggests, the impact of a void in your staff is felt far outside of the practice or department in which the vacancy occurs. In an environment of waning reimbursements and increasing overhead pressures, maintaining appropriate staffing levels is absolutely key to maintaining financial viability.     

In Part II of this blog, I will address some of the costs of physician recruiting and the impact of physicians on a community’s economy.      

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Jeremy Robinson is an Associate Director of Marketing for Merritt Hawkins and can be reached at (800) 306-1330 or Jeremy.Robinson@MerrittHawkins.com 

Leadership and Educational Resources to be Provided to Texas Trustees

In my 30 years of experience in healthcare staffing and consulting, I have had the opportunity to meet with hundreds of hospital board members, not only in Texas but nationwide. I have always been impressed by the hard work and commitment that hospital trustees devote to their communities. Their governance and leadership often requires time, effort and some tough decisions regarding their hospital’s mission and operations. Their role is made even more challenging by the fact that the great majority of hospital trustees do not come from healthcare backgrounds. They may be business executives or owners, bankers, farmers or come from a wide array of other backgrounds reflecting the populations of their communities.  

 That is why I am particularly proud of a new partnership Merritt Hawkins and our affiliate, Staff Care, have entered into with Texas Healthcare Trustees (THT). THT is a nationally respected group of over 4,000 Texas hospital board members serving hundreds of Texas hospitals. These board members help to ensure that Texas hospitals maintain the highest standards of compliance, patient safety and satisfaction at hospitals throughout the state.  

Merritt Hawkins and Staff Care have been selected by THT to provide thought leadership and educational resources to its hospital board members. Our role will be to assist THT in developing programs and resources to help trustees understand and keep current with all of the many changes taking place in healthcare today. Working with THT, will we produce guidebooks, white papers, articles, surveys, and speaking programs on various healthcare trends and developments in the areas of physician/hospital relations, physician recruiting, compensation, retention, temporary staffing, and a wide range of other workforce and related issues.

In addition, Merritt Hawkins and Staff Care will help provide the curriculum and content for a new web-based education platform to be launched by THT, which will include a series of independent study guides members can use to enhance their healthcare knowledge. We also will enlist contributions from other organizations known for their health care management expertise in areas ranging from compliance to finance and operations. We are delighted to serve as a resource that Texas hospital trustees can use to supplement their healthcare knowledge and enhance their governance capabilities.   

Additional details about Merritt Hawkins’ and Staff Care’s partnership with THT, including details about the new online education program, will be announced at the 2012 THT Annual Conference in San Antonio on July 26-28. Meanwhile, I would be happy to hear from trustees or those who interact with them regarding suggestions for how we can develop timely and useful resources.

James Merritt is co-founder of Merritt Hawkins and Staff Care and can be contacted at james.merritt@merritthawkins.com 
 

By Phil Miller 

What physicians look for in a practice – a reasonable income, competent, compatible colleagues, a chance to focus on patient care -- has not changed significantly in recent years.

The tools physicians use to find practice opportunities, however, are changing.

This fact is underlined by a new survey from Merritt Hawkins’ parent company,  AMN Healthcare, the nation’s innovator in healthcare workforce solutions. Entitled, “Use of Social Media and Mobile by Healthcare Professionals,” the survey examines the use of social media and mobile devices by job-seeking healthcare professionals.

The survey shows that physicians, nurses, allied health professionals and pharmacists are using social media and mobile devices to network with colleagues, track down job leads and apply for new positions at a significantly higher rate year-over-year. Some key findings of the survey include:

• In 2011, 1 in 3 respondents used social media when searching for a job, compared with 1 in 5 in 2010.
• Nearly half of all healthcare professionals surveyed said they use social media for professional networking.
• More healthcare professionals are using mobile job alerts year-over-year and success rates are up. Of those using job alerts, 10% received an interview, 14% received a job offer and 8% secured a job (compared to 1% securing a job from social media in 2010).
• Physicians continue to be the heaviest users of mobile devices among their medical colleagues for professional reasons; 41% of physicians cited use of mobile devices or tablets for healthcare-related content or jobs in 2011.

Physicians we speak with have noted their increased use of social media and mobile devices for professional networking and job seeking. Merritt Hawkins responded by developing the first physician recruiting app, which allows physicians to review practice opportunities and includes data about current physician supply trends (see MHA physician job iPhone application).

Over the last 25 years, we have observed major changes in the way physicians communicate about and research practice opportunities – changes that are mirrored in society as a whole. What hasn’t changed, however, is the need for a strategic, professionally conducted recruiting effort to match physicians with opportunities that meet their personal and professional needs.   Technological advances are important, but recruiting remains a “people business” where personal communication and interaction are key.
       

Anyone who would like a copy of AMN Healthcare’s social media survey is welcome to contact me at phil.miller@amnhealthcare.com. I’d be interested to hear how new communications platforms are reshaping your recruiting efforts.

Phil Miller is Vice President of Communications for Merritt Hawkins and Staff Care, companies of AMN Healthcare, the nation’s innovator of workforce solutions. He can be contacted at phil.miller@amnhealthcare.com  

By Fredricka Johnson, Online Marketing Specialist, Merritt Hawkins 

Merritt Hawkins’ employees, AMN Healthcare executives, members of Irving City Council, and Irving mayor Beth Van Duyne gathered at the Frontiers of Flight Museum on February 17, 2012 to celebrate a quarter century of achievement and thought leadership in the healthcare industry. The Frontiers of Flight museum, where visitors can embark on a memorable and historic aviation experience, was the perfect location to celebrate Merritt Hawkins’ 25 year flight as the leader in physician search and consulting.
 
Established in 1987, Merritt Hawkins has grown from a small office in Newport Beach, California to a national leader in its field. In 1990, Merritt Hawkins moved its headquarters to a more central location, Irving, Texas.  By the early 1990s, Merritt Hawkins had built a national reputation and was identified by Inc. magazine as one of the 500 fastest growing privately held firms in the country.  In 2005, the company took the next logical step, merging with AMN Healthcare, the largest nurse staffing organization in the country.  Today, we are part of the most dynamic team in the staffing industry, capable of delivering diverse and innovative work force solutions for virtually any hospital, medical group or other healthcare facility in the country.

Over the last 25 years, Merritt Hawkins has placed thousands of physicians and other clinicians throughout all 50 states. These professionals have had a profound and lasting impact on their communities, contributing billions of dollars to local economies, significantly enhancing quality and access to care, and saving countless lives.
  
Merritt Hawkins is proud of the positive impact on health care, proud of the pioneering methods developed and proud to celebrate this 25 year legacy.  February’s event commenced a yearlong celebration where we will reflect on lifetime achievements, thought leadership, and renewed commitment to clients and healthcare professionals as we continue to promote trust, innovation and results.

Related Articles:

Irving Chamber blog post: http://www.irvingchamber.com/info/main/2012/02/merritt-hawkins-celebrates-25-years.html  

Thank you Doctors, for the care you provide your patients, your staff, local healthcare facilities and the contributions you make to your community. Thank you for the untold sacrifices made by you and your family.

With changes happening in medicine every day, and with the future of healthcare uncertain, you continue to put patients first. You are the glue holding our health care system together, and we are grateful for it.

To show our appreciation for the care they provide, the employees of Staff Care and Merritt Hawkins would like to personally thank each and every doctor across America.

Help us thank all of the doctors across America by sharing this video with doctors that have made an impact on your life, your family, or your community.

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On behalf of The Physicians Foundation, Merritt Hawkins is conducting a survey of over 650,000 physicians. Let your voice be heard! Physicians who wish to complete the survey may do so at the link below: http://www.edustat.org/UltimateSurvey/Surveys/TakeSurvey.aspx?surveyid=2000 

By Phillip Miller, VP of Communications 

Imagine if every January your employer or your top client threatened to cut your earnings by as much as 30 percent. 

 
That’s the bind physicians are in today, with no resolution in sight. Because of cost overruns, federal law requires that cuts be made to physician Medicare fees in order to balance the ledger. Each year Congress delays the cuts, but they continue to loom, and everyone knows something has to be done about it. A commission that advises Congress recently came up with a plan for fixing the problem.  It suggested that Medicare fees to physician specialists be cut by six percent for three years and then be kept flat thereafter.

While Congress hasn’t agreed yet on how much physician pay should be reduced, the idea that doctors can afford a financial hit appears to be generally accepted. The fees doctors are paid by both government and private payers have been flat or declining for years, while practice expenses have increased. Many physicians have had to see more patients just to tread water. Thousands have given up on private practice altogether and have become hospital employees. There even have been recent reports of doctors going out of business.

         
So far, however, no one is protesting in the street. After all, everyone knows doctors make too much.

Or do they? Primary care physicians such as family doctors and internists earn an average of about $180,000 a year. That’s after completing four years of college, four years of medical school, and three to four years of residency training. Typically, they accumulate $150,000 or so in debt in the process. Though they make a good income, primary care doctors still have to sweat their mortgages, worry about college tuition, and live the comfortable but constrained lives of normal middle class people. That fancy yacht at the marina or luxury car in the parking lot does not belong to your local FP.

Medical specialists are in a different category. They typically earn $250,000 to $400,000 a year, and some earn considerably more. This puts them in the same general class as successful attorneys, stock brokers, corporate executives, bankers and entrepreneurs. Unlike other professionals and business people, however, medical specialists have little control over what they charge. In an open market, a top surgeon might be able to charge one million dollars to repair a wealthy hedge fund manager’s heart  – and get it. Or, perhaps competition would lower the going rate for quadruple bypass surgery and other complex procedures to a few hundred dollars.     

             
It is unlikely we will ever know, but I am inclined to think the public would put a high premium on the skills of those who can diagnose illness, repair a heart, reverse cancer, ameliorate pain, restore motor function, or give back to a child her smile. Reducing the rewards given to those with such skills assures that they soon will be fewer in number -- and they already are in short supply. Compensating physicians well is entirely appropriate given the high bar to entry to their profession, the responsibilities they assume, and the lives they save or enhance.         

Just something to think about on March 30 – National Doctor’s Day.

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Phillip Miller is Vice President of Communications for Merritt Hawkins and Staff Care, companies of AMN Healthcare. He can be reached at phil.miller@amnhealthcare.com.

By Phillip Miller, Vice President of Communications

Academics, policy experts, government leaders and others are continually weighing in on the state of America’s health care system.
 

But what do the physicians who actually provide care for millions of Americans think?
 

The Physicians Foundation, a non-profit, grant-making organization composed of state and regional medical societies, is determined to find out. Working with Merritt Hawkins, The Physicians Foundation is conducting one of the largest surveys of physicians ever undertaken in the United States. During the months of March, April and May, the survey will be emailed to some 650,000 physicians nationwide.  
 

Doctors will be asked to comment on their morale, the state of their practices, their practice patterns, the current health system and their future career plans. The intended result is a “state of the union” of the medical profession, revealing how physicians feel about the current practice environment, patient access to their practices and their ability to provide care as the system is now structured.
 

Results of the survey will be shared with physicians, policy makers, the media, and the public in order to give physicians a voice in the ongoing dialogue over the nation’s health care system.
 

Merritt Hawkins will compile results of the survey and release a report summarizing its findings in September of this year.

Physicians who wish to complete the survey may do so at the link below:

http://www.edustat.org/UltimateSurvey/Surveys/TakeSurvey.aspx?surveyid=2000 

A link to the survey and more information about The Physicians Foundations goals and initiatives can be found at www.physiciansfoundation.org.

A link to the survey also is posted on Merritt Hawkins’ web site at www.merritthawkins.com. All physicians are welcome to take the survey, which and can include their email addresses if they would like survey results sent to them.

Phillip Miller is Vice President of Communications with Merritt Hawkins and Staff Care, companies of AMN Healthcare. He can be reached at phil.miller@amnhealthcare.com 

Recently, a physician asked Merritt Hawkins through the “Ask the Experts” feature of our website about RVUs, and how they can be applied fairly. 

 
INQUIRY: What are your recommendations for physicians who perform more time intensive procedures that will appear to make them look less productive? For example in gastroenterology it takes twice the amount of time to do an endoscopic ultrasound than a colonoscopy, therefore in a given day of procedures one will yield 6 rather than 12 procedures. How do you get the higher labor intensive procedure accounted for in an RVU system so you are not punished for doing harder more labor intensive types of procedures that do not necessary reimburse more?

This concern was actually the motivating force behind the development of the RVU system.  Each patient encounter performed by a physician has a relative value which is determined by the time, the intensity, and the resources necessary to be able to provide that particular service. In other words, every CPT code has a designated number of Relative Value Units assigned to that code. A colonoscopy is given 2.82 Work RVU, while an endoscopic ultrasound exam is 5.19 Work RVU (according to the 2011 National Physician Fee Schedule).  So, physicians being compensated by their employer based on their respective Work RVU productivity have the time and intensity taken into account.  In the private market, the amount of actual cash reimbursement paid to the practice depends on contractual relationships with insurers and the ability of the practice to collect outstanding debt. 

However, when a patient is covered by Medicare, the reimbursement is handled differently.  Medicare pays a set conversion rate per Total RVU which is calculated using several components, including the aforementioned physician work, as well as practice expense, malpractice expense, and a geographic practice cost indices. The Total RVU can vary greatly depending upon the type of facility where the patient encounter occurred. Last year, based on Total RVUs, a colonoscopy often reimbursed more than an endoscopic ultrasound exam.  

Many private groups and hospitals (especially within the specialty of  gastroenterology ) are negotiating agreements to work collaboratively toward improving reimbursements in today’s rapidly changing environment.  When recruiting a new physician to the community in a hospital employed scenario, Merritt Hawkins’ recent White Paper on “RVU Based Physician Compensation & Productivity” recommends utilizing a physician employment contract with financial bonuses determined by the physician’s Work RVU as opposed to Total RVU productivity. 

We would be happy to discuss this topic further in this forum, or please feel free to email me at Peter.Cebulka@merritthawkins.com. For more information, you can also reference the CY 2012 Physician Fee Schedule (the final rule correction notice released 01/04/12), and other relevant data on RVUs including the Five-Year Review of Work Relative Value Units, on the CMS website. 

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Peter Cebulka is the Director of Recruiting Development and Training for Merritt Hawkins, the nation’s leading physician search firm and a company of AMN Healthcare.

By: Arlen Meyers, MD, MBA, President and CEO, Society of Physician Entrepreneurs

Merritt Hawkins welcomes physicians, healthcare administrators, policy makers and others to contribute articles to our blog dealing with staffing, health care management trends, policy trends or other topics of interest to health professionals. Following is a guest blog by Arlen Meyers, MD, MBA, on bioentrepreneurship.   

Bioentrepreneurship is the process of creating customer or patient- defined value by researching, developing and commercializing biomedical and healthcare innovations. The definition includes three key elements: process, value and innovation.

First, biomedical and healthcare entrepreneurship is a process.  Like all entrepreneurs,  bioentrepreneurs mostly act. Indeed, they plan and monitor their efforts but the process is proactive and hands on, with innovators constantly experimenting and rapidly adapting to changing macroeconomic stresses, market shifts and technological advancements. Seeing opportunity and exploiting it, experimenting, rapidly changing course and bootstrapping are core competencies.

Second, bioentrepreneurs  create customer defined value.  To be successful, the product or service must have tangible and intangible benefits in the mind of the buyer that far exceed the tangible and intangible costs. What’s more, the customer defines the value of the offering, not the entrepreneur. Customers and patients vote with their wallets.

Finally, bioentrepreneurs innovate.  They create things that are new, better, smarter, faster, cheaper or more attractive than the status quo or their competition. In some instances, the difference is incremental and minimal. In others, it is disruptive and entirely novel.  What’s more, the offering can be a product or service , a business model , like a new way to purchase care,  or a care delivery innovation, like concierge medicine.

In addition, life science entrepreneurs come in four flavors.

Private practitioners who, as small to medium sized business owners, are interested in generating revenues  sufficient to satisfy their own needs. They do not go to public markets for capital and their exit strategy is usually to sell the practice or pass it on to a relative.

The second type is the classic life science entrepreneur, interested in researching, developing and commercializing a drug, device or diagnostic test. Here, the goal is to create a corporate entity that will create as much shareholder value as possible. The product development cycle is long and expensive, is fraught with all types of risk, and requires enormous amounts of capital from public markets. The exit strategy is typically a merger or acquisition, IPO or some kind of strategic alliance.

Social bioentrepreneurs try to improve the human condition through innovative products and services, be it delivering clean water to underdeveloped communities or creating a vaccine to wipe out rare , but deadly, tropical diseases.

Finally, intrapreneurs are employed by someone else. As a corporate employee, they create value by contributing to the process of offering new products and services that are in alignment with the corporate strategy and vision.

If you are looking for a job with a private practice or will be working for a health services organization, you will be expected to add value as quickly as possible by adopting an entrepreneurial mindset and creating value to the practice or organization.  As such, you will be expected to do what entrepreneurs do: Identify unmet market needs, create a product or service that has a compelling value proposition, and deliver it using a business model that generates profits.  You will be expected to get the knowledge, skills and abilities to do this. In the new world of health care , having the qualifications and abilities to practice your specialty will not be enough. Taking care of business is as important as taking care of patients. If you want a competitive advantage, learn how to do it.

Arlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs, a global biomedical and healthcare innovation network. More information about this organization can be found at www.sopenet.org.

By Fredricka Johnson, Online Marketing Specialist, Merritt Hawkins

One of our earlier posts, entitled “How to Assess a Practice Opportunity,” reviewed various issues physicians seeking a practice opportunity should consider, and questions they should ask, as they work through the intensive process of evaluating a practice. After considering those issues, physicians should know exactly what they are seeking and make a list to use as a reference to help in their practice assessment.  A new Merritt Hawkins’ white paper, “How to Assess a Practice Opportunity,” can help physicians determine what items should be included on that list. Once physicians have established a list of questions, what simple tools can they use to get their questions answered? 

One way to explore whether practice opportunities fit specific physician criteria is through social media and other online resources.  Following are a few suggestions.

Social Media

A large majority of hospitals and medical groups have a social media presence, including participation on LinkedIn, Twitter and Facebook. A quick internet search will often return the practice’s social media accounts. Explore the social media account to help determine the office culture. Are they educating their patients? Are they posting about subspecialty or other expertise?  Are they using social media to communicate with others and expand their network or referral base? How large is their online network? This can often give you an idea of how technologically advanced the practice may be.

Blogs

Does the hospital or medical group have a blog? What type of content are they posting? Blogs are a great way to engage the community on a particular subject. A quick scan of recent blogs can help determine the vision of the group, hospital, or health system. Look for posts about new initiatives and future plans of the practice. Explore the comments section to determine the overall acceptance by the community.

Physician Review Sites

Did the Google search return a list of positive reviews for the practice? Assess what patients are saying about the practice. While you cannot solely base your judgment on patient feedback, this is still a useful source to explore the overall perception of a practice. Physician review sites will also provide basic information, including practice hours and location. The hours will give you an idea of the possible scheduling and the flexibility you may have with this opportunity. Perform a quick address search to find out more about the amenities the area has to offer, like shopping, restaurants, and recreational options. 

These are just a few ways online resources are offering innovative methods for physicians to examine practice opportunities.  They are not a substitute for actual dialogue with practice partners or administrators, or for on-site interview, but they can help provide a more complete picture of what is being offered. For more tips and engaging conversation, connect with us on blogs, Twitter, Facebook, YouTube, and LinkedIn social sites.

By Phillip Miller, Vice President of Communications, Merritt Hawkins

The cat has been long out of the bag where the shortage of primary care physicians is concerned.  Virtually all of the academic and policy-making experts agree that there are too few family physicians, general internal medicine physicians, and pediatricians to meet the needs of a growing population, particularly if health reform succeeds in adding 32 million people to the ranks of the uninsured.

The Patient Protection and Affordable Care Act acknowledged this by including provisions to increase the number of physicians selecting primary care as a specialty and to increase the number of available primary care resident positions.  However, the Act did little or nothing to increase the number of medical specialists trained in the United States.  There are still a number of influential policy makers and academics who argue that there is no need to train additional specialists, and there are no plans in place to do so of which I am aware. 

This is a policy direction that should be reconsidered, because, given projected demographic trends, demand for a variety of specialists is often exceeds supply today and is more likely to do so in the future.    Close to 20 medical specialty societies have released reports projecting shortages in fields such as psychiatry, geriatrics, general surgery, gastroenterology, oncology, dermatology, emergency medicine, neurosurgery and pediatric subspecialties.

This trend recently was addressed in an article appearing in Hospitals & Health Networks, the magazine of the American Hospital Association.  The article tracks the difficulty some hospitals are encountering finding specialists and underscores why the physician shortage encompasses more than primary care doctors. 

The solution, as we see it, is to train more physicians in both primary care and in specialty areas, where needed.  A policy that robs Peter to pay Paul will be self-defeating in the long run.  If anyone is encountering specialty shortages first hand, or is aware of any steps being taken to address them, please feel free to comment.

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Phil Miller is vice president of communications for Merritt Hawkins and Staff Care, companies of AMN Healthcare.  He can be reached at phil.miller@amnhealthcare.com

By Carl Shusterman, JD

The doctor shortage, now a national problem, has long been a particular challenge in rural and inner city areas.  A new bill, which I believe merits strong support, would provide medically underserved areas with some relief.
On December 13, 2011, Senators Kent Conrad (D-ND) and Jerry Moran (R-KS) introduced S.1979, the “Conrad State 30 Improvement Act.”

This bipartisan bill would make it easier for physicians educated in other countries to obtain temporary visas and permanent residence in the U.S. if they obtain offers of employment in medically-underserved areas.

Senator Conrad authored a 1994 law that permitted states to sponsor up to 20 physicians annually for “J waivers.” Typically, physicians training in the U.S. on J visas must return home for at least two years before they can practice here.  J waivers allow them to forego the two-year requirement provided they agree to practice in medically underserved areas.  In 2002, the number of waivers available to each state was increased to 30.

For the past 17 years, the Conrad program has permitted states to sponsor over 9,000 foreign-born physicians to work in underserved areas.  However, this program is not a permanent part of the law.  It must be renewed every two or three years.  Also, since the early 1990s, a growing number of physicians have trained in the U.S. in H-1B status, rather than in J status.  These physicians lack a legal incentive to work in underserved areas since the H-1B does not entail a two-year home residency rule.

S.1979 would change the status quo in the following ways:

Make the Conrad program a permanent part of the law;

Allow physicians who work in underserved areas to immigrate under the EB-1 category rather than the EB-2 category;

Allow physicians who pursue their medical residencies in H-1B status and agree to work in underserved areas to restart the maximum 6-year duration of their H-1B status;

Increase the number of physicians that states can sponsor annually to 35 under certain circumstances; and

Make it easier for physicians in H-1B status who work in underserved areas to change employers.

The passage of this legislation would be a boon for rural and inner city American medical facilities struggling to find physicians. 

Since the EB-1 category is “current” for all countries, the bill would aid Indian and Chinese physicians who are presently disadvantaged by backlogs in the EB-2 category.

In addition, the bill would, for the first time, aid physicians who complete their medical residencies and fellowships in H-1B status.  This is important because the number of J-1 medical residents and fellows who are eligible to participate in the Conrad State 30 program has been steadily decreasing, much to the disadvantage of rural and inner city America.  Typically, because of the 6-year maximum duration of H-1B status (with limited exceptions), physicians must scrabble to attempt to secure permanent residence in the U.S. before their H-1B status can no longer be extended.  S.1979 would solve this problem for those physicians who work in underserved areas.

As Senator Moran stated in his press release, “S. 1979 provides additional incentives for more doctors to participate in the program. Also, the bill provides a method for states to increase the number of waivers available to work in underserved communities.”

Stay tuned to this blog and to my web site (www.shusterman.com) to follow the progress of S.1979 as it moves through the legislative process and feel free to email any questions you may have regarding the bill or other immigration matters to me at carl@shusterman.com.

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Carl Shusterman served as a Trial Attorney with the U.S. Immigration and Naturalization Service (1976-82) and is principal of The Law Offices of Carl Shusterman.  He is a nationally recognized authority on healthcare related immigration law and can be reached at 213-623-4592 or at carl@shusterman.com.   

Ten Statistics and Trends about Physician Shortage

By Tom Florence, Senior Vice President of Recruiting, Merritt Hawkins

Physician shortage continues to be a growing issue and discussion among health experts. There have been a number of recent studies and surveys that report the obvious. The United States is in the midst of a growing physician shortage that is particularly acute in rural and inner city areas. Many states are facing a serious doctor drought. Do you know the facts about physician shortage? The following is a list of ten statistics and trends that underscore how the demand for physician services is outpacing the supply of doctors.

1. The Association of American Medical Colleges (AAMC) forecasts that in 15 years the United States will face a deficit of up to 159,300 physicians. The AAMC projects that universal access to health care would increase the physician shortage by an additional 31,000 doctors. The AAMC has consequently has called for a 30% increase in the number of physicians trained in the U.S. ¹  
2. The American Academy of Family Physicians (AAFP) projects a shortage of 149,000 physicians by 2020, while the Health Resources and Services Administration (HRSA) projects a shortage of 65,560 primary care physicians by 2020. ² 
3. Twenty-four states have released reports projecting physician shortages, and 21 medical specialty societies have released reports projecting shortages in their fields. ³ 
4. Between 1987 and 2007 the population of the United States grew 24 percent, from 242 million people to 302 million people. In the same period, the number of physicians trained in the U.S. grew by only 8%. ⁴ 
5. In addition to an emerging physician shortage, there is a long-standing maldistribution of physicians in the United States, with fewer doctors practicing in rural and inner city areas. The Health Services and Resources Administration (HRSA) currently designates over 6,200 Health Professional Shortage Areas (HPSAs) for primary care nationwide, in which over 65 million people live. Sixty-seven percent of HPSAs are in non-urban areas. The ratio of primary care providers to patients in these areas is less than one per 2,000. ⁵ 
6. HRSA projects it would take 17,000 additional primary care clinicians to achieve a ratio of one primary care giver per 2,000 patients in the nation’s 6,200-plus HPSAs.⁶ 
7. HRSA also currently designates 3,291 mental health HPSAs nationwide in which 80 million Americans live. ⁷ 
8. While some 20 percent of Americans live in rural areas, only nine percent of physicians practice in rural areas. ⁸ 
9. Fewer than one percent of final-year medical residents would prefer to practice in communities of 10,000 people or less. ⁹ 
10. Between 2002 and 2007, the number of U.S. medical school graduates choosing to become family physicians decreased by 25 percent. ¹⁰ Forty-two percent of patient visits to the doctor in rural areas are seen by family physicians, compared to 23 percent for all Americans. ¹¹

Are you seeing similar industry trends? We are always happy to address any issues that readers of this blog may find interesting or useful and we look forward to your comments or suggestions.

Tom Florence is the Senior Vice President of Recruiting, Merritt Hawkins. He can be reached at tom.florence@amnhealthcare.com

¹ Dill MJ, Salsberg ES. Association of American Medical Colleges. The complexities of physician supply and demand. November 2008.
² Worth T. Agencies warn of coming doctor shortage. Los Angeles Times. June 7, 2010.
³ Association of American Medical Colleges. Recent studies and reports on physician shortages in the U.S. April 2009.
⁴ O’Reilly KB. New medical schools open but physician shortage concerns persist. American Medical News. March 29, 2010.
⁵ Ibid.
⁶ Ibid.
⁷ Ibid.
⁸ National Rural Health Association Issue Paper. Recruitment and Retention of a Quality Health Work Force in Rural Areas. November 2006
⁹ Merritt Hawkins 2011 Survey of Final-Year Medical Residents
¹⁰ Iglehart JK. Health reform, primary care, and graduate medical education. New England Journal of Medicine. August 3, 2010.
¹¹ The Robert Graham Center. The Family Physician Workforce: The Special Case of Rural Populations. July 2005.
    

Dr. Keith Morrow Continues To Treats Patients From Converted Trailer 

By Phil Miller, Vice President of Communications, Merritt Hawkins and Staff Care

When an E-F5 tornado devastated the town of Hackleburg, Alabama, including both his medical offices, Dr. Keith Morrow continued to do what he has done for over 25 years -- treat patients and serve as a pillar of his community.

For his extraordinary devotion and compassion, Dr. Morrow has been named the 2011 Country Doctor of the Year.  Presented by Staff Care, a sister company of Merritt Hawkins and, like Merritt Hawkins a company of AMN Healthcare, the Country Doctor of the Year Award recognizes the spirit, skill, and dedication of America’s rural medical practitioners.  Staff Care has presented the national award since 1992 to exemplary physicians practicing in communities of 30,000 or less.

(Dr. Morrow stands at the site of his former office.)

Dr. Morrow has been a rock for his patients both before and after the tornado that demolished Hackleburg

After completing his medical training in 1985, Dr. Morrow returned to practice in the area where he grew up, an economically challenged section of northern Alabama where virtually all of his patients depend on Medicare or Medicaid.  For 25 years, he has seen an average of some 50 patients per day, treating all comers regardless of ability to pay, and often paying out of his own pocket to ensure his patients receive appropriate treatment.  On call day and night, he is known for his “car hops” – consulting with patients who have mobility problems in the parking lot of his two offices.

Two days after the tornado that devastated Hackleburg and killed 28 local residents, Dr. Morrow began practicing out of tents pitched near the site of one of his former offices.  Later, a local soft drink distributor donated the trailer of an 18-wheeler for Dr. Morrow’s use.  Converted into a medical office with improvised “exam rooms,” the trailer continues to serve as Dr. Morrow’s office, and is filled every day with patients.  Dr. Morrow is rebuilding his offices and has vowed to stay in Hackleburg and continue to lead its recovery, though he could easily have used the destruction of Hackleburg to relocate to a community with far fewer challenges.  

     
 
As the 2011 Country Doctor of the Year, Dr. Morrow will be able to enjoy two weeks of time off, as Staff Care will provide a temporary physician to fill in for him at no charge, a service valued at approximately $10,000.  He also will receive the award’s signature plaque featuring a country doctor making his rounds on a horse and buggy, an engraved stethoscope, and a monogrammed lab coat.  Additional information about the Country Doctor of the Year Award, including a nomination form, can be found at www.countrydoctoraward.com.  If you know a great country doctor, please take a moment to nominate them for the 2012 Award.

You can read more about Dr. Morrow in this article from HealthLeaders.

Phil Miller is Vice President of communications for Merritt Hawkins and Staff Care and can be reached at phil.miller@amnhealthcare.com

By Mark E. Smith, President, Merritt Hawkins

It has never been easy to recruit physicians to small towns and other traditionally underserved areas, and with the national physician shortage, it is only getting harder.

That is one reason Merritt Hawkins conducts its Pro Bono Physician Search Program – to highlight the growing challenges facing underserved communities that are in desperate need of physicians.  The program also is Merritt Hawkins’ way of saying thank you to the many facilities in small towns and other underserved communities that have entrusted us with their recruiting needs over the years.

Under Merritt Hawkins’ Pro Bono Physician Search Program, we commit to the search of a physician for a medically underserved area on a pro bono basis, waiving our customary fees.  After reviewing applications from around the country, it is my pleasure to announce that we have selected two small facilities in rural eastern North Dakota as recipients of our 2011/12 Pro Bono Physician Search Program.

Northwood and Larimore, North Dakota, with a combined population of about 2,000 people, are served by our first recipient, Northwood Deaconess Health Center, a 12-bed critical access hospital, and our second recipient, Valley Community Health Centers, a federally qualified health center.  The two facilities provide care for a regional population of about 20,000.  Due to the loss of one physician and the semi-retirement of another, only one part-time doctor is now resident in the two communities.  Without a full-time physician on-site, the hospital and the community health center cannot remain financially viable, jeopardizing the communities as a whole.

Sharon Ericson, the Chief Executive Officer of Valley Community Health Centers, said it best speaking to our Selection Committee during the Pro Bono selection process:  “There is a domino effect that takes place when small towns lose medical services.  Without a doctor in town, it’s hard to attract new families and new businesses.  As health care goes, so goes the community.”          

Merritt Hawkins will conduct a full service physician search for a family practitioner, assisting the two facilities in creating a recruiting plan, consulting on incentives, sourcing and screening candidates, and bringing the process to a close. Our consultants have already profiled the opportunity on-site and have assisted the facilities in developing a recruiting strategy and an incentive package. The search will be ongoing starting in December and our goal is to complete it in the shortest possible time frame, though the challenge will be considerable.  

We will keep readers updated on our progress in this blog and we welcome any comments or questions you may have – particularly if you are a family physician who would like to serve two wonderful, physician-friendly towns in North Dakota!

Mark E. Smith is president of Merritt Hawkins, the nation’s leading physician search firm and a company of AMN Healthcare.  He can be reached at mark.smith@merritthawkins.com.

By Travis Singleton, Senior Vice President of Marketing, Merritt Hawkins

The ongoing industry dialogue about physician staffing issues now extends to a variety of mediums, including books, articles, surveys, seminars, web sites, online discussion groups and other formats. Merritt Hawkins is committed to following and contributing to this discussion in whatever ways we can. In addition to the forums mentioned, we now are utilizing YouTube as a medium for sharing information and analysis pertaining to a wide range of physician staffing topics.

Our first YouTube post offers a video summary of a new white paper Merritt Hawkins completed which examines changing trends in physician compensation formulas. You can view the video here:

Our goal with YouTube is to offer a series of videos addressing topics such as physician supply and demand, physician retention strategies, physician recruiting contracts, physician sourcing and interviewing techniques, changing physician practice styles, and related issues. We are always happy to address any issues that readers of this blog may find interesting or useful and we look forward to your comments or suggestions.

**

Travis Singleton is Senior Vice President of Merritt Hawkins. He can be reached at travis.singleton@merritthawkins.com

Part II What Are the Latest Trends in Incentive Based Physician Compensation?

By Jeremy Robinson, Associate Director of Marketing, Merritt Hawkins

In Part I of this blog, I discussed how physician incentive-based compensation is evolving away from formulas built almost entirely on volume based metrics (which encourage physicians to “do more”) and toward metrics that encourage physicians to be more cognizant of quality and cost issues.  I also reviewed several of these new metrics.    

In Part II, I will address additional metrics that are being incorporated into physician compensation plans.

Subjective metrics added to the mix

Given the increasing focus on the overall patient experience, subjective criteria are  being applied to many physician incentive models to encourage doctors to work well in a collaborative environment and to provide high quality care and a positive patient experience. These trends are highlighted in MGMA’s 2010 Physician Compensation and Production Survey, as noted here:

% of physician providers reporting incentive compensation per category

Patient satisfaction, a subjective metric, is emerging in virtually all models of care. Whether in community health centers, private practices, or hospitals of any size, patients are being polled not only about the quality of care that they feel they were provided, but also about their impression of each visit. From an internal perspective, physicians are also being encouraged to participate in committees and various corporate initiatives (QI, EMR implementation/training, etc.), and are being incentivized to do so. Incentive programs are beginning to include a citizenship component for participation in such committees, meeting attendance, and other corporate activities. Additionally, some organizations are starting to tie a portion of incentive compensation to peer review as well.

Often these metrics are included in a physician annual performance bonus plan that may be based on a point system. Out of 100 possible points, physicians can accrue points for high patient satisfaction scores, accurate documentation and group governance. A score of 91 to 100 points may yield a physician a 5 percent bonus, 81 to 90 points may yield a 4 percent bonus, etc., (though other scoring systems and bonus amounts also may be used – see “Example A” below).

The impact of bundled payments on compensation

Health reform (both the Affordable Care Act and system changes driven by the market) are leading the drive toward efficiency.  In select markets, some private insurance carriers are conducting bundled payment pilot projects.  On the Medicare front, CMS announced on August 23, 2011, its Bundled Payments for Care Improvement Initiative, which is comprised of four pilot models. For more information about the Payments for Care Improvement Initiative, click here.

Under both private and CMS models, reimbursement for a procedure which typically would have resulted in numerous claims from various providers would be consolidated into a single, “bundled” payment for the procedure or episode. Hospitals and private practices will be working in concert to provide high quality care with an overall reduction in reimbursement for the event. 

In one of CMS’ models, hospitals would cut checks to physicians out of a fixed prospective payment they would receive for all services furnished during a particular type of inpatient episode. In the three others, CMS and participating providers would set a bundled payment amount for a particular episode of care by applying a discount to what Medicare normally pays (the discounts appear to be in the 0-3% range). Providers would then bill Medicare as usual, though at the negotiated discount. If total fee-for-service payments are less than the bundled payment target, providers would share the difference.

Hospitals and private practices would work in concert to provide high quality care with an overall reduction in reimbursement for particular events.

Three examples 

In preparation for a more value-based payment environment, some early adopters have implemented a variety of qualitative and subjective metrics into their physician compensation plans. In many cases, they have given these metrics a proportionally small weight when compared to volume-based incentive compensation, so that physicians can become accustomed to these new components. 

As can be seen in the following three examples Merritt Hawkins has seen implemented in the marketplace, compensation models and specific criteria vary significantly, as does the amount that physicians can earn for reaching each metric:

Example A – A physician can earn up to 5 percent of his or her base salary as additional bonus income for achieving a minimum average level of patients per day, by exceeding practice average for patient satisfaction scores, for correctly documenting in charts, for appropriate coding and billing, and for citizenship (peer review, networking, community relations, etc).  Each component is given a specific weight and the cumulative analysis determines how much bonus is earned annually.

Example B – The physician can earn a fixed $20,000 bonus annually (the amount does not fluctuate based on specialty or base salary) if thresholds are met for sufficient patient satisfaction scores, accuracy of charting/EMR data input, and participation in a quality improvement project annually.

Example C – A physician can earn nearly ten percent of his or her base salary as a quality bonus if thresholds for certain key indicators are met or exceed.  These key indicators are unique per specialty. Additionally, the provider can earn an additional five percent of their base salary for a citizenship component which includes peer review, participation in committees, and participation in corporate initiatives (for example EMR implementation, quality improvement, etc.).

Early adoption of these components that initially minimizes their impact may be more appealing to physicians, as they will be able to adapt to the new metrics without feeling that their compensation level will be unduly compromised.  When physician reimbursement structures eventually change, early adopters will be well-positioned, as they can simply dial up the weight of each component, so that volume-based compensation is given a lower priority and more emphasis is given to value and cost-based metrics. 

This transformation in physician compensation is the cornerstone on which health reform is based. It will not be easy to move the needle from a volume driven mindset that has become deeply entrenched among health facilities and providers toward a value and cost driven mindset. The process will no doubt proceed incrementally and with many starts and stops along the way. But changing is coming, and hopefully it will be for the better.  

I welcome your thoughts and experiences with incentive-based physician compensation, and would be particularly interested to learn of any physician compensation models you believe are working well

**

Jeremy Robinson is an Associate Director of Marketing for Merritt Hawkins and can be reached at 800-306-1330 or Jeremy.Robinson@MerrittHawkins.com.

Part I- What Are the Latest Trends in Incentive-Based Physician Compensation?

By Jeremy Robinson, Associate Director of Marketing, Merritt Hawkins

Why do hospitals, health systems, medical groups and other organizations offer incentive-based compensation to physicians?  Is the primary goal simply to allow physicians to earn more money? 

Generally speaking, the answer is no.  In most cases, incorporating an incentive-based component into a physician compensation model is primarily intended to reward certain physician behaviors. 

Based on Merritt Hawkins’ 24 years of experience, compensation models encouraging physicians to “work harder” have been the most common. These compensation models typically reward physicians for two different though related behaviors:  1) seeing a higher volume of patients, or 2) generating a higher volume of gross billings or net collections. 

In either case, physicians have been rewarded for “doing more” – seeing more patients, ordering more tests, performing more procedures. “Doing more” has been the way in which health facilities have sought to meet patient access needs and keep doctors productive. The by-product, of course, is potentially more revenue for the physician and for the facility, but the incentive itself is at its essence an exercise in physician behavior modification.     

But the health system is changing, and so is the way in which physicians are being compensated.  

In fact, one could argue that the health system is changing because the way physicians are compensated is changing.  Since physicians control how some 75 to 80 percent of healthcare dollars are spent, health care reform is really is about changing how doctors practice and allocate resources. 

The reality of healthcare today is that both healthcare facilities and physicians are charged with delivering better care for more people, while doing so at a lower cost. 

These priorities will be difficult to balance, and a key to success will be engaging physicians and gaining their cooperation in establishing new delivery models.  As the old axiom goes, you must reward those behaviors you wish to encourage.

No practice model will be immune to the pressure to evolve.  Whether a community health center, a private practice, a critical access hospital, or a large integrated system, organizations of all types and sizes are beginning to incorporate qualitative and subjective metrics into their physician incentive models to prepare for the era of Accountable Care Organizations, medical homes and a system in which value will be at least as important as volume.

Based on Merritt Hawkins’ observations of the market place, the following are some of the more prominent trends in incentive-based physician compensation:

Volume will remain a factor

Even though the focus is shifting to value, physician compensation metrics built around volume (i.e., patients seen, revenue generated, work performed) will likely remain in use.  One of the realities of our evolving delivery system is that more patients will have to be seen, with or without full implementation of the Affordable Care Act.  In order to encourage providers to see more patients, incentive plans will almost certainly maintain a volume-based component. 

Many community health centers (CHCs) are offering a per-patient or per-visit bonus after physicians achieve a stipulated patient visit threshold.  In private practice, incentive-based compensation is often directly related to collections, which tend to be a function of the individual provider’s patient volume.  In the hospital environment, incentive-based compensation has historically been tied to Relative Value Units.  Merritt Hawkins has recently released a white paper exploring the RVU-based incentive model. To review this new paper, RVU Based Physician Compensation and Productivity, click here.

These volume based metrics will continue to be used for the foreseeable future, though no longer to the exclusion of other metrics.

Qualitative metrics are gaining ground

Providing quality care has always been a focus for both healthcare facilities and physicians, but in today’s evolving delivery system, more emphasis is being placed around formal quality-based metrics for incentive-based physician compensation.  With increasing utilization of EHR platforms, administrators and physicians have access to more data and better data, allowing formal quality metrics to be developed and implemented. 

As noted in MGMA’s 2010 Physician Compensation and Production Survey, 62% of physicians had incentive-based compensation tied to quality metrics in 2009, compared to only 21% in 2008 – nearly a 300% increase in utilization in just one year.  Specific quality metrics in some incentive models include detailed physician focus on chronic conditions such as asthma, congestive heart failure and diabetes.  Data-supported protocols can dramatically improve both quality of outcomes in these common diseases and reduce the utilization of healthcare resources.  Within these diseases, certain key indicators that are being benchmarked to monitor outcomes include blood glucose, cholesterol, blood pressure, eye exams, HbA1c, among others. 

Physician compensation models we have seen employed by medical groups and hospitals tie anywhere between 1 percent and 10 percent of physician compensation to achieving certain qualitative measures.

Readmission rates will have an impact

As the health care systems move toward various types of Accountable Care Organizations (Medicare and private sector), and as more attention is directed toward maximizing the utilization of healthcare resources, a portion of physician incentive-based compensation is likely to be impacted by hospital readmission rates.  Hospitals are in a period of transition from a culture in which filling beds was paramount to one in which the priority will be meeting quality and cost goals.

Collaborative models of care, such ACOs and medical homes, have the potential to reduce hospital readmission rates and thereby impact physician incentive-based compensation.  Under such models, dedicated resources will be allocated to follow up with patients to ensure that their post-discharge treatment plans are fully understood and the patients are following their protocols.  With processes in place to ensure patients are well informed about their conditions and are an active part of their treatment plan, we should experience a dramatic improvement in patient compliance and thereby greatly reduce readmissions.  Reduced readmissions will financially reward the hospital as well as the individual physicians.

In Part II of this blog, I will discuss additional aspects of incentive-based physician compensation, including subjective metrics and bundled payments.

Jeremy Robinson is an Associate Director of Marketing for Merritt Hawkins and can be reached at (800) 306-1330 or Jeremy.Robinson@MerrittHawkins.com.

By Phil Miller, Vice President of Communications, Merritt Hawkins

It’s good to be a medical resident.Sort of.

Merritt Hawkins’ new 2011 Survey of Final Year Medical Residents indicates that doctors in their final year of training are being swamped by recruiting offers, even in a down economy.

How many offers?   

Over 75 percent of newly minted physicians surveyed by Merritt Hawkins received at least 50 job solicitations during their training, and close to half received 100 or more.

       
Though hiring in most sectors is stagnant at best, new doctors are being recruited like blue chip athletes. This includes not just primary care doctors, but many types of specialists as well.

Despite a favorable job market, however, some new doctors are unhappy about their choice of a profession, the survey suggests. Merritt Hawkins asked new doctors if they would study medicine if they had their education to do over again, or if they would select another field. Close to one-third of physicians surveyed (28 percent) said they would select another field, up from 18 percent in a similar survey Merritt Hawkins conducted in 2008.

The survey also conveys some bad news for rural areas, which traditionally have had a hard time attracting newly trained physicians. Only four percent of doctors surveyed by Merritt Hawkins said they would prefer to practice in communities of 25,000 people or less. In addition, only one percent of physicians said they would prefer a solo practice, while 32 percent said they would prefer to be employed by a hospital, up from 22% in 2008.   

A preview of the survey can be accessed here. A complete copy is available by calling Merritt Hawkins at 800-876-0500.

Is anyone finding that medical residents are becoming more difficult to contact, easier, or are things about the same?

**

Phil Miller is Vice President of Communications for Merritt Hawkins. He can be reached at phil.miller@amnhealthcare.com. 

A summary of Merritt, Hawkins’ 2011 Survey of Final-Year Medical Residents can be accessed at www.merritthawkins.com or by calling (800) 876-0500.  

Merritt Hawkins New iPhone App Offers Immediate Access to Physician Jobs and Key Physician Industry Data by Specialty

By Travis Singleton, Senior Vice President, Merritt Hawkins

Merritt Hawkins launched a new free iPhone application, called “MHA,” designed to provide immediate access to jobs and industry data for physicians, administrators and select allied healthcare professionals. The new app, accessible to iPhone and iPad users, is one more way in which Merritt Hawkins strives to provide on-going effort useful resources and expertise to the health care industry through social media and mobile platforms. In fact, Merritt Hawkins also sources candidates through mobile text alerts, social sites including Twitter and Facebook and provides thought-provoking conversation and topics of interest through our LinkedIn group and blogs.

We invite you to download the MHA app now through any of the quick methods:

1) Visit the mobile application support page on Merritt Hawkins Web site  to download. http://merritthawkins.com/social-media/IPhone.aspx 
2) Download the application by scanning the QR (quick response) code at the bottom of this post.
3) Visit the iTunes store and download the application now or, you can easily find it by searching for “MHA” or “physician jobs” from the iTunes app store on your phone.

The MHA app features a physician and select allied health job search tool with detailed job descriptions by medical specialty and by geographic region. It also offers instant access to a wide range of survey information and staffing data of interest to health care executives, recruiters and clinicians. Users can quickly determine how many physicians there are in a particular specialty, how many are board certified, and the average income they generate annually on behalf of their affiliated hospitals. It also links to various Merritt Hawkins’ surveys that have become nationwide benchmarks over the years.

With our app you can:

- Search Physician and select Allied Health jobs by specialty and/or region
- Save most recent searches for quick access upon next log in
- Easily access Merritt Hawkins whitepapers and surveys
- Stay current on company news and updates with social media

If you have comments or questions regarding the app, we would love to hear about them. Please send us an email or comment below and let us know what you think.

Questions? Contact me directly: travis.singleton@merritthawkins.com

 By Phil Miller

    
        How many times do medical residents get contacted about practice opportunities during the course of their training?   When do they first begin to seriously examine job offers?   What type of practice settings are they most open to?

        Every other year, Merritt Hawkins conducts a survey of physicians in training to find answers to these and related questions.   The results are published in our Survey of Final-Year Medical Residents, which was first released in 1991.   We've been conducting our 2011 survey over the last several months and the results are in.    Although it will take us several weeks to compile our findings and complete the analysis for our final report, the initial responses are interesting.

       Despite the economic downturn, medical residents continue to receive numerous solicitations from physician recruiters.   There is definitely competition for the attention of medical residents – just how much competition may surprise you.    Many residents also report that they received little training regarding the business of medicine in medical school and are concerned about what awaits them in private practice.

       The survey offers a revealing snapshot of today’s medical residents and can be a useful tool for those recruiting in the resident market.   We will be announcing release of the survey report in this blog and will be happy to email a copy to readers who would like see it.  

         If you would like to receive a copy of Merritt Hawkins’ 2011 Survey of Final-Year Medical Residents, please e-mail me at phil.miller@amnhealthcare.com.     
         

By Kurt Mosley, Vice President, Strategic Alliances

Despite a year of economic chaos and uncertainty, physician compensation continues to grow across the nation, according to a recent article in Modern Physician (http://bit.ly/qttbbD ). Although physician compensation growth is slightly down from the previous years, nearly 70% of physician specialties saw income increases in 2010, as reported in the American Medical Group Association’s 2011 physician income survey.

The 2010 AMGA survey report of 248 medical groups across the nation highlights a 2.6% increase in compensation for primary care physicians, while physician specialties outside of primary care averaged a 2.4% increase in compensation for the survey period. The largest increase of any broad medical specialty area was surgical specialists at 3.8%, which correlates with the high demand for surgical specialists across the nation.

The report also referenced the three specialties which saw the greatest income increases:

     . Allergists-6.38% increase
     . Emergency Medicine (EM) Physicans-6.37% increase
     . Internal-Medicine (IM), Hospitalists-6.29% increase

Emergency medicine physicians and IM Hospitalists will continue to play key roles as some 32 million patients are expected to be added to the ranks of the insured over the next two to four years as a result of health reform.

The report also points out another important trend -- the rising consolidation among physicians. The report indicates that the majority of practices were able to sustain the downturn in revenue and stay in business, because they were part of larger healthcare entities and groups; thereby enabling the spread of shortfalls, lessening the immediate impact.

Increases in income for primary care physicians reported in the AMGA survey were reflected in Merritt Hawkins’ 2011 Review of Physician Recruiting Incentives, which revealed the demand for physicians remains strongest in primary care.  For the sixth consecutive year, family practice and general internal medicine were Merritt Hawkins’ top two most requested physician search assignments. See the full survey and trends within the physician recruiting market here.

Do these trends mesh with what you see in the market?  Share your thoughts on these reported compensation and specialty increases.  I can be reached at kurt.mosley@merritthawkins.com. Access the 2011 Medical Group Compensation and Financial Survey here:  http://bit.ly/q8NJ1b 

There are 44 million uninsured people in this nation and another 56 million who, although they may have health insurance, live in areas without doctors and basic health services. For more than 45 years, the service and contributions of Community, Migrant, Homeless and Public Housing Health Centers have provided access for all, to affordable, high quality, cost-effective health care.  The second week of August each year is dedicated to honoring the commitment of America’s health centers to medically vulnerable and underserved people in the U.S. during National Health Center Week.

Merritt Hawkins understands that thousands of health centers and many other facilities operate in underserved areas where it can be difficult to find quality physician candidates. We are proud to celebrate National Health Center Week by extending an invitation for all health centers to apply for  Merritt Hawkins’ Pro Bono Physician Search Program.   Under this unique program, Merritt Hawkins will recruit a physicians to a medically underserved area, waiving its professional fees.

Designed to bring relief to the underserved area chosen, the program also is intended to underscore the national physician shortage. The program is part of our longstanding effort to increase the nation’s supply of physicians, an effort that includes authorship of a book about the physician shortage (“Will the Last Physician in America Please Turn Off the Lights?”) and funding of The Council on Physician and Nurse Supply.

Applications for the Pro Bono Search program are due August 15, 2011 and any community health center or other underserved facility is eligible. Nominations will be reviewed by a selection committee and after three (3) finalists are chosen and their representatives interviewed, a winner will be selected on or about October 15, 2011.

For further information, please contact Phil Miller, VP Communications at (800) 876-0500 or phil.miller@amnhealthcare.com.

By Peter P. Cebulka III, Director of Recruiting Development and Training, Merritt Hawkins

Last week on this blog I outlined some of the points physicians should consider and questions they should ask when assessing practice opportunities.   I observed that medical groups and hospitals also should consider these questions and be prepared to address them as they seek to recruit physician candidates.

In this blog, I will include further questions physicians should ask as they do their due diligence in selecting a practice opportunity.

Does the recruiting facility have a clearly written work schedule with patient volume and on-call expectations?

One of the main reasons why physicians don’t “stick” with an opportunity long-term is that expectations regarding work schedules and related matters were not properly communicated on the front end of the recruiting process.  Physicians often go into a new practice expecting a certain level of time commitment, on-call duties, etc. only to find that the reality is something different.   A better approach is to obtain work expectations of the practice in writing so that there are no surprises. 

• Determine what the standard hours are and approximately how many patients you will be expected to see per day to cover your salary, benefits and overhead.
  
• Determine what the rotation and normal number of calls and/or encounters per month are for each of the following three on-call categories: (1) outpatient only practice call, (2) the practice’s inpatient census, and for (3) unassigned Emergency Department calls.
  
• Though opportunities with little or no on-call responsibilities are preferred by many physicians, remember that understanding the “frequency vs. volume” balance often is necessary in weighing the potential quality of life associated with a particular opportunity. 

Will the community’s amenities meet your needs and those of your family?

Almost everyone has preconceived notions about various parts of the country or particular communities.   Physicians seeking practice opportunities should put these notions aside and examine the amenities that each community offers objectively.   Merritt Hawkins has recruited hundreds of doctors who began the conversation stating they would never live in the community to which they were ultimately recruited.   Keeping an open mind can lead you to opportunities that match both your professional and personal needs.

• According to the Association of American Medical Colleges, 89% of physicians prefer communities with populations of 50,000 or more.  However, it is access to amenities, not population size, that will determine if a community is right for your family.   Dig a little deeper to find out what the community actually offers.    
  
• Discuss proximity to the nearest major metropolitan area, entertainment and recreation, high end retail shopping, international airport, fine dining, places of worship, and attractive neighborhoods.
  
• When evaluating local schools try not to focus on how the “average” student in the district compares with state or national norms.  The greatest contributing factor to a child’s academic success is the educational level of their parents and the emphasis placed on learning in the home.  When physicians are researching public and private school options it is more meaningful to examine the quality of enrichment resources, applicable special education programs, extra-curricular activities of personal interest, and universities where top graduates eventually matriculate.
  
• Determine the real estate options.   Ask for prices of homes, pictures of available hneighborhoods, virtual tours, etc.

• Ask about the lifestyles of physicians already practicing in the community.   Do they send their children to local schools?   Can they afford second homes in the mountains or by the ocean?  What hobbies or outside interests are they able to pursue in the community?   Do they feel safe and accepted? 

How does the financial package benchmark against the most recent and relevant physician compensation figures?

Some years ago, in the era of traditional private practice, there was only limited data regarding physician compensation.   Now that many physicians are employed, more data exists to benchmark physician compensation and help structure incentive packages.

• Reference annual reports published by the Medical Group Management Association (MGMA), the American Medical Group Association (AMGA), American Association of Medical Colleges (AAMC), Sullivan Cotter, The Hay Group and Merritt Hawkins, depending on the academic or clinical nature of the position.  Keep in mind that the aforementioned surveys are based on information reported during the prior year, so it is also extremely helpful to consult a knowledgeable recruitment firm and inquire about real time data for current starting offers.
  
• Obtain an understanding of who your patients will be, the local payer mix, outmigration patterns, and other data that will confirm your ability to maintain a busy practice and achieve production bonuses.

Make sure the compensation structure is appropriate for the position and your mindset.

There are an increasing number of financial structures and contract types being offered to physician candidates today (see Merritt Hawkins’ white paper Physician Recruiting Financial Models ).   It is important to ensure that the structure being offered reflects your mindset and financial goals.

• If you have significant business acumen, and an entrepreneurial spirit, it may be viable to consider an “income guarantee” from the hospital to build a start-up practice.  Due to changing medical economics and other factors, there has been a large decline in the use of income guarantees, as physicians have gravitated to employed settings.  However, such guarantees offer the benefit of practice autonomy and are still attractive to some doctors.   
  
• Of the over 2,600 physician search assignments Merritt Hawkins conducted in the last 12 months, 74% offered a financial structure featuring a base salary and a production bonus (see Merritt Hawkins 2011 Review of Physician Recruiting Incentives.)  Employers should have a clearly defined bonus structure for the opportunity.  Variables frequently measured for determining production bonuses include Relative Value Units (RVUs), net collections, net charges, patient encounters, timely records, patient satisfaction, patient panel size, qualitative metrics, profit share, on-call pay, departmental goals, administrative responsibilities, leadership stipend, retention and discretionary bonuses.  Transparency is essential – make sure you understand the terms of the financial structure and the metrics on which your productivity will be based. 
  
• Private practice groups offering equity ownership should also have a defined process that is transparent and easily understood.  Today, some 90% of these opportunities are offering a 12-24 month partnership track. 

Though the analogy may be an overly familiar one, assessing a practice opportunity is like conducting a patient examination.   You need to be thorough, ask questions, and listen carefully in order to achieve an appropriate diagnosis.

Contact Peter directly at: peter.cebulka@merritthawkins.com

By Peter P. Cebulka III, Director of Recruiting Development and Training, Merritt Hawkins

As professionals working in the physician staffing industry know, the first two questions doctors generally ask about a practice opportunity are:

 1) Where is it located?

And:

2) “What is the financial offer?”

These are obviously important questions, but physicians interested in determining if a practice opportunity is right for them and for their family should go much deeper.   Following are some issues physicians seeking a practice should consider, and questions they should ask, as they work through the intensive (though often quite interesting and rewarding) process of evaluating a practice.  

These issues and questions are not just relevant to physicians evaluating the job market, however.    They are important to hospitals and medical groups that are recruiting physicians and who will be asked to respond to a variety of candidate inquiries and concerns.  Hospitals and groups should be prepared on the front end with a detailed physician recruiting position statement and plan that anticipates what candidates are likely to ask.

First, accept the process for what it is

Physicians considering a career change are taking a step that will have profound consequences for themselves and their families.

• Accept that the process will be rigorous and time consuming.
  
• Be prepared to spend hours on the phone with recruiters or other representatives of the practice before an on-site interview is scheduled.
  
• Include your spouse or significant other in these telephone discussions
  
• Fact-find on the front end.   Learn all you can about the parameters of the practice, including financials and contracts, before the on-site interview is set.   Keep in mind the interview is for confirmation not for exploration.   By the time you meet your potential colleagues or employer, you should know what the practice and the community are all about.   

Know the vision of the group, hospital or health system

In an era of health reform, physicians need to understand the vision of the group, hospital and/or health system they will be joining.

• Do they intend to designate as an ACO or medical home?
  
• Are there key physician leaders within the hospital or health system advocating the physicians’ point of view?  If so, who are they and what are their priorities?
  
• What are the plans for integrated EHR?
  
• Are there ongoing negotiations with major payers within the state?
  
• Are there plans for practice mergers or integration with larger entities?
  
• Where does the practice stand in the shifting continuum between traditional, fee-for-service practice and the integrated model with its associated quality and cost effectiveness metrics?

The leadership, direction and stability of the leading local health systems have become part of the evolving conversation in physician recruitment, whether or not the doctor is considering joining a private affiliated group in the community, or employment by the system.

Determine if there is a defined need for your medical specialty in the service area.
It is important to know whether your services are really needed in the community, and the basis for that need.   If part or all of your compensation will at some point be tied to your production, you should be satisfied that an adequate patient base will be available.   

• If the opportunity is in a designated Medically Underserved Area (MUA), or Health Professional Shortage Area (HPSA) per the U.S. Department of Health & Human Services, there is probably a need for primary care and there is likely a need for certain specialists as well.   The recruiting group or hospital should know if they are in a designated MUA or HPSA.   You may research this independently, however, by accessing the web site of prominent immigration attorney Carl Shusterman here:  http://shusterman.com/medicallyunderservedareas.html.  
  
• Determine the physician-to-population ratio in the area for your specialty, and compare this ratio to various studies indicating the required number of physicians by specialty per 100,000 population.   The recruiting medical group or hospitals should have these ratios.   You may also obtain physician-to-population ratios by contacting Merritt Hawkins at 800-876-0500.
  
• Ask for information about local patient outmigration patterns.  
  
• Determine if the local physicians have full practices, and whether they support recruitment.  
  
• If you are joining a group in a competitive market, will there be patient overflow from colleagues with currently long patient wait times, or is the intent for you to build a practice and capture market share?
  
• Ask about the group or hospital’s medical staff plan.   Many hospitals today, and some large medical groups, prepare staffing plans that analyze patient demographic trends, acuity levels, and other data required to determine community need for physicians.    

Ensure that there are adequate resources available for you to establish a practice.
If the groundwork for your recruitment has been laid properly, resources should be in place or pending that will allow you to establish your practice.

• Ask where your office will be located, whether it clean and attractive, and if it has ample space, competent staff, and the necessary equipment.
  
• If there is limited access to required technology, ask if funds are allocated or available in the budget for purchasing what is needed. 
  
• When the position is not with a major teaching program or tertiary center, it may not be crucial to have all state-of-the-art equipment, but it is important to know how your patients can be referred to subspecialists and the most contemporary diagnostics when necessary. 

As I mentioned, assessing a practice opportunity is an in-depth process.   These are only some of the questions to ask.   I will address others in Part II of this blog which will post Wednesday, August 3.
Contact Peter directly at: peter.cebulka@merritthawkins.com

By Kurt Mosley, Vice President of Strategic Alliances, Merritt Hawkins

Though it is not listed that way in the dictionary, “retention” definitely comes before “recruiting” where physician staffing is concerned.

After all, in an era of pervasive physician shortages, it only makes sense to secure the doctors you have before you seek others.   While doctors are not relocating at the rate they were before the economic downturn, physician turnover still is running at 11%, according to a new study from data base company SKA (for more information on this study see http://bit.ly/mUxmVF)

In many ways, retention and recruitment are two sides of the same coin, because the features that tend to retain physicians are the same ones that attract new doctors to a practice.  Here are several guidelines to consider when developing a physician retention plan.

Walk in the physician’s shoes.   Physicians are unique in the training they must complete and in the clinical, administrative, operational and moral challenges they must face.   A great look into the mindset and priorities of today’s physicians is provided by a national physician survey Merritt Hawkins conducted on behalf of The Physicians’ Foundation.   View the survey at: http://bit.ly/qf1awV Knowing and empathizing with the mindset of doctors is the first step in physician retention.

Pushed, not pulled.   As much as we as recruiters would like to tout our ability to persuade physicians to leave one practice for another, the truth is that physicians usually leave because they are dissatisfied with some element of the practice, not because they have spoken to a silver-tongued recruiter offering a greener pasture.   Therefore, you need to know how staff physicians feel about where they work and where they live.

Don’t forget to ask.   If you want to know how physicians on staff feel about their practices, you have to ask them, both through formal channels, such as a staff survey, and through informal communication such as lunches, visits to the physician’s lounge, etc.   A sample of a physician staff survey can be found in Merritt Hawkins’ book Guide to Physician Recruiting.   You can order the book through our publisher’s web site at:  www.practicesupport.com.  A staff survey should reveal physician pain points, which must be addressed immediately to reduce the appeal of a recruiter’s siren song.

The primacy of the workplace.   Like snowflakes, no two practices are alike.   Frankly, some practices are more appealing than others, not necessarily because they are located by a beach or the mountains, but because they feature a practice style and a work environment tailored to what doctor’s today prefer.    You cannot control the fact that you are not close to an ocean, but you can to some extent control the quality of the medical practice environment.   Here are some ways to enhance the physician workplace:

• Maintain a qualified, appropriate nursing staff.  A key irritant too many physicians is lack of appropriately trained nurses
• Improve physician access to patient data
• Enhance test turnaround times
• Ensure timely, efficient OR capability
• Ensure timely, efficient patient admissions and release
• Enhance ER triage/patient turnaround
• Implement a hospitalist/surgicalist/nocturnist program
• Provide flexible scheduling
• Use locum doctors during peak usage periods to avoid physician burn-out     
• Provide convenient parking/access for physicians
• Maintain appropriate equipment/electronic medical records
  

Physicians are looking for environments where they can provide quality care to their patients – that is their first priority, and though it is not always easy or inexpensive to do so, it is important to maintain a premier physician “workshop.”

Employ the physician.   Over the last year, 56% of Merritt Hawkins’ search assignments have featured hospital employment of the physician.  The push toward more integrated delivery systems (including ACOs), and the desire of many doctors to seek relief from the burdens of private practice, are likely to accelerate hospital employment of doctors.   Employing physician can cement the hospital/physician relationship and enhance retention.

Pay for ED call.   ED call may be a part of the hospital employment agreement.   If not, or if independent physicians are on staff, paying for ED call can be a good retention tool.   The daily ED call rate for family practice is $300, according to MGMA’s On-Call Compensation Survey, while daily rates for neurosurgery are about $2,000.

Gain sharing/Joint ventures.   Aligning physicians financially with the hospital has proven to be an effective retention policy.   ACOs may achieve this alignment for some facilities, but they are unlikely to do so for all.   Other avenues, such as gaining sharing outside of the ACO model, or joint ventures, can promote retention.

Good recruiting leads to good retention.   Physician turnover often takes place because of lapses in the initial recruiting effort.   If expectations regarding hours, group governance, and quality of care, financials and related issues are not clearly communicated on the front end during recruiting, misunderstandings that lead to turnover can result on the back end.   Make sure to spell out in writing exactly what is expected of the physician, and make sure to accurately project the financial potential of the practice so that expectations are realistic.   Keep in mind that recruiting new physicians can alienate existing ones, unless the recruiting effort is based on an objective, data-driven need for additional doctors.   A community needs assessment plan can help convince staff physicians that new doctors are needed and that they do not have to relocate due to incoming competition.

Above all else, physician retention is a matter of communication.   I recall checking up on a physician Merritt Hawkins had recruited some months earlier to see how he was fitting in with a new group practice.   He informed me that he was leaving because the group had not put his name on the door and on other signage, and he assumed he was not wanted.  A simple lapse in communication almost caused this group to lose a good doctor.

I’ll close with this quote from a health system CEO that further reiterates the importance of communication:

“When you need the goodwill of physicians, it is too late to create it.  My advice is get ahead of the competition by having a really good relationship with your doctors.”

 **

Kurt Mosley serves as Vice President of Strategic Alliances for Merritt Hawkins and can be reached at kurt.mosley@amnhealthcare.com.

By Phil Miller, Vice President, Communications, Merritt Hawkins

Everyone knows that forming an ACO will not be easy.

The new ACO regulations recently released by CMS were greeted with considerable blowback by the industry and are thought to be too complex and difficult.   Some observers are saying the cost to form and operate ACOs will be prohibitive, while information technology implementation will remain a challenge. 

But in a new survey by AMN Healthcare, Merritt Hawkins’ parent company, healthcare facility administrators and physicians report that the most serious obstacle they face in forming ACOs is physician alignment.

The survey asked hospital executives and physicians about their participation in ACOs, and whether or not ACOs will deliver significant cost and quality benefits.

Fifty-eight percent of 882 administrators and physicians responding to the survey indicated their facilities are either in the process of forming ACOs or are considering doing so, while 42% said their facilities will not form ACOs in the foreseeable future.

Of those who are moving toward ACOs, 42% said physician alignment is the most serious obstacle to their efforts, followed by lack of capital (38%), lack of integrated IT systems (31%), and lack of evidence-based treatment protocol data (25%). 

Of those who are not moving toward ACOs, 40% cited physician alignment as a reason they are not, followed by lack of capital (31%), lack of integrated IT systems (26%), and lack of evidence-based treatment protocol data (23%).

The survey underlines a story familiar to those who lived through the last push toward health reform in the 1990s.  Health reform is all about influencing how physicians practice – moving them from volume-based incentives to value-based incentives in a more integrated, outcomes-oriented system.   This proved difficult to accomplish during the last go-around with health reform and the survey suggests it will prove difficult in the current iteration of reform.

However, the survey does suggest that the majority of healthcare facility administrators and physicians still hold out hope that ACOs will deliver significant cost and quality benefits over time.  Fifty-nine percent of those surveyed either strongly agreed or somewhat agreed that ACOs will deliver benefits and that they are a key to enhancing quality and reducing costs.

Click here to go to AMN Healthcare’s Industry Research page and scan down to the Survey section to find the “Physician Alignment Primary Obstacle to ACO Formation” item.

By Tommy Bohannon, Vice President, Recruiting, Merritt Hawkins

Despite the well-publicized shortage of physicians, locating and securing the right job can be challenging.  When you do find an opening that you want to interview for, you have to bring your A-game in order to put yourself in the best position possible.  With today's highly competitive market, it is best to assume that you are not the only candidate being considered.  Following are some job interviewing tips for physicians that can separate you from other candidates and make sure you get the offer you want.

2. Know their goals
   • You need to fully understand what the employer is looking for so that you can convince them that you can provide it.  

3. Know your goals 
   • First and foremost, the goal is to receive an offer.  Don't falsely assume that simply showing up will land you a contract.  If you have an offer, you are in control of your destiny.  Without an offer, there s no decision to make.

4. Attitude 
   • Show interest; the facility you are visiting invested a lot of time, money, and effort to put the interview together. 
   • Reserve negative comments. 
   • Be sensitive to the employer's pride.  If equipment, offices, etc. appear outdated to you, don t put them down.

5. Look and act the part. 
   • Dress appropriately.  When in doubt, overdress for the occasion and unless told otherwise, wear professional business attire. 
   • Don t smoke or drink alcohol.  Most interviews today incorporate a social aspect with dinners / luncheons / etc.  Though this activity is social, you are still being evaluating in a professional context.   Make sure that behavior which may seem innocuous at the time doesn't hurt your chances of receiving an offer. 
   • While this advice may seem obvious on its face, you would be surprised how often inappropriate dress or conduct dooms an interview.

6. Interview with a positive attitude.
   • If everyone has done their homework, your prospective employer knows why you are seeking a new position.  Don't dwell on negative experiences of the past.  I like to tell candidates to look through the windshield, not the rear-view mirror .  Focusing on your goals for the future will go farther than constantly looking to the past.

7. Ask questions; take notes. 
   • This simple step shows interest on your part.  Being more engaged in the conversation is more productive than letting the interview be a monologue. 

8. Don't negotiate during the interview.
   • You typically won't have an offer yet, so there's no point in trying to negotiate.  Even if you do get an offer on the spot, it's best to reserve negotiation for the next day unless they specifically ask what your thoughts are.

9. First impressions can be misleading--complete the interview. 
   • Finish the visit, meet all of the people, ask all of your questions and see the area before formulating your opinion.  If all goes well, you'll be there for many years to come -- base your decision on all of the details. 

10. Make a timely decision. 

* Think the offer through, follow-up if you need additional information, but provide the practice with a timely decision, so that they can make preparations to bring you on board, or they can move on. 

 

A practice interview can be one of the most stimulating and important events of your career, make sure you get the most out of it!

Tommy Bohannon is Vice President of Recruiting for Merritt Hawkins and can be reached at 800-876-0500 or tommy.bohannon@merritthawkins.com.  

By Phil Miller, Vice President, Communications, Merritt Hawkins

Each year, Merritt Hawkins releases a report analyzing the physician search assignments we conduct on behalf of our clients nationwide.   

Our new, 2011 Review of Physician Recruiting Incentives marks the 18th consecutive year we have released this report.   Like previous Reviews, the 2011 edition tracks the financial offers being made by hospitals, medical groups and other facilities to recruit physicians, along with additional incentives being offered such as signing bonuses, relocation allowances, and others.

The 2011 Review tracks not just what physicians are being paid to relocate, but how they are being paid.    This is an important point, because how doctors are paid is one of the keys to health care reform.  

During the one year period tracked in the Review, 91 percent of Merritt Hawkins’ search assignments included a salary or a salary with production bonus as a form of compensation.   About nine percent featured an income guarantee.    Income guarantees traditionally are offered to independent, private practice physicians, while salaries typically are offered to employed physicians.    Until relatively recently, the majority of Merritt Hawkins’ search assignments featured income guarantees as the compensation structure.   Fewer than one in 10 of our searches feature this model today.  

The transition to the employed physician practice model has been rapid and is likely to accelerate with the advent of health reform and integrated delivery systems such as ACOs.     The movement toward ACOs is driven in part by the need to convert our current volume-based/fee-for-service structure to a value/quality and cost-based structure.  

Merritt Hawkins’ new Review suggests this hasn’t happened yet.   Seventy-four percent of our search assignments last year featured a salary with productivity bonus as the compensation formula.   In 93% of these searches, the productivity bonus was based on some form of volume metric, either work units (RVUs), net collections, patients seen, or gross billings.   Fewer than seven percent featured quality or cost-based physician productivity metrics.

This indicates that in the “real world” redesigning physician compensation is a continuing challenge.   For years, volume has been the standard, and even though quality metrics are what many in the industry aspire to, creating a viable formula is extremely difficult.   It will be interesting to see in one or two years to what extent quality and other physician productivity metrics are embraced.  Stay tuned.

Meanwhile, if anyone is encountering potential solutions to this challenge, I would be happy to hear about them. You can post your thoughts in the comments section below.

By Allen Dye, Divisional Vice President, Merritt Hawkins 

Is offering medical school educational loan forgiveness to physician candidates part of the new recruiting normal?

Studies say yes, and based on what Merritt Hawkins is seeing in the market, I tend to agree.  With the national average educational debt for medical school graduates surpassing $170,000 last year, physicians completing their training will have even more interest in finding opportunities that can help them with their debt load. 

In Merritt Hawkins’ most recent survey of final year medical residents, educational loan forgiveness ranked third among residents in importance when considering practice opportunities, surpassed only by geographic location/lifestyle and a good financial package.  This positions educational loan forgiveness ahead of other considerations such as: low malpractice area, proximity to family, and adequate call/coverage/personal time.  Furthermore, the same survey found that 59% of final year medical residents list educational loan repayment/forgiveness as a moderate or great concern.

When I joined Merritt Hawkins in 2002, only 35% of our opportunities  provided sign on bonuses as part of the overall compensation packages.  That same year, only 11% of the opportunities we represented provided educational loan forgiveness.   By contrast,  Merritt Hawkins’ 2010 Review of Physician Recruiting Incentives shows that sign-on bonuses are now offered 76% of the time, and it is unusual today when an opportunity does not offer some type of sign-on bonus.  The same sort of transition now is taking place with educational loan forgiveness.  In 2004-2005, the same year that Merritt Hawkins saw primary care jump from a secondary recruiting priority to our most frequently requested type of search, we saw the number of our search assignments offering educational loan forgiveness jump from 14% to 34%.  Last year, the occurrence of loan forgiveness as part of a compensation package that MH represented was at 38%, an all time high.

Part of this rise may be a result of enhancements that the National Health Service Corps (NHSC) has made to their loan repayment program, which is intended to persuade physicians to practice in medically underserved areas.  Not only has NHSC expanded their program to repay a physician’s total educational loans for 6 or more years of service, there is more to come in 2012.  The Affordable Care Act (i.e. “health reform”) creates a mandatory NHSC Fund at the discretion of the Secretary of Health and Human Services.   Amongst other things, the ACA increases the maximum annual NHSC loan repayment amount from $35,000 to $50,000, adjusted annually for inflation beginning in FY2012.  The current NHSC loan repayment criteria can be found by clicking here 

The NHSC’s ability to offer new doctors more educational loan forgiveness is likely to up the ante for all types of facilities seeking doctors.   This trend, combined with the growing mountain of educational debt doctors are burdened with,  will mean that educational loan forgiveness will soon go from being an “exotic” type of recruiting incentive to a more normal and customary one. 

What's your take on the Student Loan Forgiveness incentives? We'd like to hear from you....

By Peter P. Cebulka III
Director of Recruiting Development & Training
Merritt Hawkins, an AMN Healthcare Company

In Part I of this blog, I reviewed how RVUs have become the most common productivity measure in calculating physician compensation.  In Part II, I outlined five of our ten tips for RVU compensation.   In Part III below, I discuss the remaining tips, six through ten. 

6.) Include quality incentives as part of the overall compensation structure as well.  RVU compensation allows physicians to focus less attention on generating revenue, but using RVUs for determining physician pay is still fee-for-service.  So complimenting an RVU incentive model with qualitative measures such as “patient satisfaction” and “outcome metrics” can also help bridge the gap while transitioning toward more evidence based medicine and the anticipated “value based modifier” for Medicare patients in 2015.

7.) Be practical.  Physicians considering an employed position with RVU compensation, and a hospital considering changing all of their employed physician contracts to RVU productivity, will have the same common goals.  The compensation structure should pay the doctor fairly and be economically sustainable for the employer over time, or the practice will not survive.  Turnover is costly for health systems, physicians, and for patients in the community.  Running a pro forma with the precise CPT codes an incoming physician might utilize by polling local payers is certainly possible, but it also may result in a scenario where the employer and/or the physician might “miss the forest to see the trees.”  If there is demand in the market, and an affable, hard working physician desires to practice in the area, most situations are best served by setting a reasonable dollar amount for Compensation per Work RVU, and then focusing on getting the doctor ramped up as quickly as possible.  If the doctor is already practicing in the community and seeking employment by a health system, valuations can be handled by referencing the doctor’s existing billing information.  

8.) Consider having a tiered plan for Compensation per Work RVU whereby, the physician receives a lower dollar amount per RVU up to a specified threshold level, but a higher Compensation per Work RVU thereafter.  Several health systems have effectively implemented a system with 3 or more tiers, so as the practice becomes more profitable, the physician receives a greater percentage of that margin.

9.) Be aware of political risk and the key entities influencing RVU values.  The AMA owns the copyrights for the CPT code and receives approximately $70 million annually from charging a license fee for those wishing to associate RVU values with CPT codes.  The codes are periodically amended by the CPT Editorial Panel and their use is required by statute.  The RBRVS system is based on the CPT code and the RBRVS system is mandated by CMS.  The system is not going to vanish any time soon.  Nonetheless, the 29 member Relative Value Update Committee (RUC) is mainly a privately run regulatory committee who must maintain budget neutrality when modifying Relative Values, and their meetings are closed to the public, so paying physicians based on RVU Productivity will always have a level of uncertainty, just like any other compensation model.

10.) Remember there is a shortage of physicians and doctors seldom relocate their practice and their family without having an attractive financial guarantee.  It is still necessary to have an established base salary set at fair market value.  Numerous RVU models are structured in a way that reduces or eliminates the base salary after the first or second year with compensation based solely on productivity after that.  This can be accomplished by having a rolling quarterly reconciliation with the subsequent 3 months “salary” paid at whatever the previous quarter’s production warrants.  Physicians can be leery of this, and it may hurt recruitment or retention, but it also establishes a system allowing for the doctor to work long term in a stable environment with their personally desired volume of patient interaction.  It can also decrease a physician’s potential concern regarding termination for failing to meet targets they deem unrealistic for their style of practice and patient care.  The demography of practicing physicians is changing.  There are significant numbers of doctors looking to slow down either because they are in the later stages of their career or because they place a greater value on their schedule and quality of life.  Having flexibility in a compensation structure can be a perceived benefit if it is discussed and positioned correctly.

The key with RVU and other forms of physician compensation is to structure a formula that fits the culture of a particular practice or medical staff.   If you have questions about RVU or other physician compensation structures, I would happy to address them.   Please contact me at peter.cebulka@merritthawkins.com or 800-306-1330.

Ten Tips for RVU Compensation

Part II

Last week in this blog we explored the fact that Relative Value Units (RVUs) have rapidly become the most common productivity measure in compensation methodology for physicians.  According to the MGMA, over the last 4 years there has been a 112% increase of medical practices using RVUs as a factor in determining physician remuneration, and a 79% increase of physicians reporting their income is influenced by the RVUs they generate.

While legislators, the media and executives have debated healthcare reform, our industry has experienced this very noteworthy and substantial trend affecting the way a majority of doctors are paid.  Merritt Hawkins, the nation’s leader in physician recruitment, has received numerous inquiries regarding prudent ways to structure an RVU Productivity Model for employed physicians.  We therefore offer these Ten Tips for RVU Compensation.   I will review five of the ten this week and discuss the remaining five in next week’s blog.

1.) Keep it simple.  One of the benefits of utilizing an RVU compensation model is the ability of physicians to focus on patient care as opposed to spending an extensive amount of time managing the business of medicine.  This can be a positive attribute for recruiting and retaining quality providers, but that value is diminished if the formula being used to determine the doctor’s pay is overly complex and confusing.  One simple solution is to establish an affordable and predetermined dollar amount the physician will receive per Work RVU generated.  This “Compensation per Work RVU” figure can be benchmarked for the physician’s respective medical specialty using an annual report by organizations such as the Medical Group Management Association (MGMA), the American Medical Group Association (AMGA), or with the help of a knowledgeable physician search firm.  The physician’s guaranteed base salary can be divided by this dollar amount to set a threshold of Work RVUs that must be generated before the physician begins receiving a Productivity Bonus.  The physician would receive this Compensation per Work RVU for each Work RVU exceeding the threshold.  Salary and bonuses can be calculated annually or on a quarterly basis.

2.) Ensure administrators and physicians have a clear understanding of the difference between the CMS Resource-Based Relative Value Scale (RBRVS) method, which functions on the “Total RVU” system, and the specific formula being used in the compensation section of the physician’s employment contract to determine how the provider will be paid.  These are not identical.  CMS reimburses for services based on Total RVUs (which includes the Work RVU, the Practice Expense RVU and a Malpractice Expense RVU), and this Total RVU is adjusted by locality according to the Geographic Practice Cost Index (GPCI) and then multiplied by their current Conversion Factor (CF) in calculating the reimbursement for a service.  However, physicians are most frequently compensated by their employer per the “Physician Work RVUs” they generate.  Very few physicians have an incentive bonus based on Total RVUs.  In either case, all of the RVUs generated by the physician are typically tracked and credited toward the doctor’s overall productivity since they will see patients from payers other than CMS.

3.) Stay informed of developments with the RBRVS method.  Every Current Procedural Terminology (CPT) code used in billing for services has a corresponding Relative Value.  These are periodically updated and can be downloaded from the CMS website by navigating to the Physician Fee Schedule (PFS), and clicking on the PFS Relative Value Files.  The most recent version was posted on 05/24/2011 as revised for the July 2011 release.

4.) Don’t’ believe the myth that an RVU Productivity Model will always pay a physician uniformly based on the amount of work they perform.  No system is perfect.  As an example, the national median Compensation per Work RVU for a Pediatrician is $38.89; however, the median Compensation per Work RVU for an Orthopedic Surgeon is $60.05, according to the 2010 MGMA report.  Discrepancies occur amongst physicians within the same medical specialty as well.  Internal Medicine residency trained physicians report their compensation per Work RVU is 30% higher on average when they are employed as a Hospitalist, instead of working in a traditional inpatient and outpatient general Internal Medicine practice.

5.) Discuss hospital and physician alignment.  In an era where health systems and large practices are moving toward Accountable Care Organization models with an emphasize on providing lower cost preventive medicine and a potential return on investment from shared savings, implementing an RVU compensation program can act as a bridge allowing doctors to treat all people in the service area (regardless of insurance status) without concern for having these patient encounters negatively affect the physician’s personal income.  This is likely one of the primary reasons we’ve seen the proliferation and growth of RVU compensation models in the last several years.

There is more to be said regarding this important topic, and next week I will review RVU tips for compensation six through ten.

Meanwhile, if you have questions, please feel free to contact me at peter.cebulka@merritthawkins.com or at 800-306-1330. 

According to the 2010 MGMA Report, over 60% of physicians now use the Number of Relative Value Units generated by the Provider as a Productivity Measure in Compensation Methodology.  In fact, RVU Productivity is the most common form of quantitative metrics used in determining physician pay today.

In 2007, an already substantial 16% of Practices, and 34% of Providers, indicated use of RVU metrics in their compensation.  The most recent data indicates 35% of Practices, and 61% of Providers, now have RVU productivity influence physician income.  Of course, there are often other productivity and quality measures which are simultaneously used in determining a physician’s overall incentive pay, but it is important to note that over the last 4 years, the increased use of RVU has been both significant and drastic.

In an era where legislative healthcare reform dominates media coverage, many have failed to recognize that practices using RVU compensation models have more than doubled, and a majority of US physicians are currently being paid according to RVU.

This rapid growth has caused a gap in the learning curve for many doctors and administrators who may never have had in depth exposure to RVU functionality.  CMS has long used RVU, so physicians and administrators are often familiar with their application as it pertains to reimbursement from Medicare and/or Medicaid.  However, wide scale use of RVU as a primary form of measuring physician performance and determining overall compensation (particularly, outside the realm of large health systems and academic institutions) is a more recent phenomenon.

There are presently an immense variety of RVU formulas being used in employment contracts for determining physician compensation.  Frequently, the formula used in calculating a doctor’s bonus is complicated, confusing, convoluted, or even incoherent.  Many physicians and employers aren’t precisely sure how to structure an RVU bonus model, but have been too afraid or embarrassed to ask.  That is changing.

Merritt Hawkins, the nations’ leading physician search firm, has experienced more frequent inquiries regarding RVU compensation.  That’s not surprising.  The surprise comes from how many physicians and practices already have RVU compensation as part of their existing employment contract, but can’t explain clearly how their final compensation is actually determined.  That is worrisome.

If you are in a similar situation, it may be reassuring to hear you’re not alone.  Nonetheless, a much deeper understanding of RVU is necessary and helpful for most industry professionals.  Stay tuned for the Merritt Hawkins upcoming release of “Ten Tips for RVU Compensation” on May 25th.