physician recruitment: the true cost to your organization
Post on 09-Jun-2015
90 Views
Preview:
DESCRIPTION
TRANSCRIPT
0www.IHStrategies.com
Exclusive to Healthcare. Dedicated to People. SM
Physician Recruitment: The True Cost to Your Organization
Presented to:
Ohio Hospital Association Members
June 16, 2009
Presented By:
Michael Hogue, M.D., Senior Vice President
www.IHStrategies.com
11
Physician Recruitment a Significant Concern
Number one issue for healthcare system CEOs
2008 Advisory Board survey
49% of hospital administrators described recruiting new physicians
“Extremely Challenging”
55% of hospital administrators described the change in recruiting
difficulty as “More Difficult” over the last 48 months
www.IHStrategies.com
2
Physician Recruitment a Significant Concern
By 2020, the Council on Graduate Medical Education predicts a 10% shortage of necessary providers (96,000 physicians)
Growing population but capped medical school and residency positions
Aging population with increasing health care demands on the system
Increasing patients under proposed universal health care programs
Increasing number of retiring physicians
Changing work habits of all physicians
Senior physicians cutting back hours
Increasing number of administrative physicians
Lifestyle a greater issue for younger physicians
Increasing number of female physicians of childbearing age
Mal-distribution of currently practicing physicians
www.IHStrategies.com
3
Physician Recruitment a Significant Concern
Fewer physicians choosing primary care specialties
Delayed workforce entry with prolonged specialty/subspecialty
training
35% of physicians currently practicing are over the age of 55
Approximately 15% retirement rate per year
www.IHStrategies.com
44
Recruitment Today is Highly Competitive
Employment of physicians by systems is on the rise
Financially challenging to operate a private practice in today’s
environment
Increasing number of physicians looking for employment model
Beneficial for system to not compete for ancillary services
System desire to captivate “splitters”
Joint ventures difficult to implement in the face of Stark 2.5
Recruitment is expensive and time-consuming
Entire cost burden placed on system
Combination of factors creates recruitment issue in both near
and distant future
www.IHStrategies.com
5
Recruitment Costs
Difficult to quantify all costs related to recruitment
Easy to quantify “hard” costs, including dollars utilized for:
Advertising
Retained search firms
Travel arrangements
Lodging
Social engagements
Direct costs associated with recruitment visit
www.IHStrategies.com
6
Interventional Cardiologist Recruitment Example
Direct costs associated with recruitment of one candidate:
Average organization interviews 6 candidates over a 1 year
period for each open position
Direct expenses for recruitment are $109,500 (travel cost x 6)
Does not include “soft” costs
Source Average Cost
Advertising (Internet, print ads, and mailings)
$4,500
Site Visit (Travel, lodging, car rental, meals)*
$3,000
Second Visit for Home Search $2,000
Relocation Costs $15,000
Signing Bonus $40,000
Contingency Firm Fee $30,000
Total: $94,500
*Not including family members
www.IHStrategies.com
7
Opportunity Costs Interventional Cardiology
Most important cost/expense is opportunity cost:
No budget line item accurately reflects turnover
“Silent killer” of an organization
Loss of revenues, especially for a high volume procedural
specialist, significantly impacts bottom line performance of
system
Practice Net Revenue $1,124,000
Hospital Net Revenue $2,662,000
Total Net Revenue $3,786,000
Assumed Margin 20% $757,200
Recruitment Expense $109,500
Total Recruitment Expense $866,700
www.IHStrategies.com
8
Soft Costs
Difficult to quantify “soft” costs, including dollars spent on:
Manpower hours put in to evaluate need for new provider
Productive time of practicing physicians and senior executives
Time and compensation of recruiting department staff
Politicking time
e.g., for “system need” recruit
www.IHStrategies.com
9
Other Cost Considerations in Recruitment
Recruitment process may take longer than 12 months
Costs associated with recruiting a physician whose spouse and
family members need to review the community
Increasing costs in light of the current economy
Costs associated with maintaining office staff and space
throughout the vacancy if replacing a relocating provider
Combination of “hard” and “soft” costs equals the true cost of
recruitment
www.IHStrategies.com
10
Average Recruitment Times*
Gastroenterology 20 months
Neurosurgery 30 months
Cardiology 16 months
Orthopedic Surgery 19 months
* Advisory Board: Physician Recruitment Attracting Talent in a Competitive Market, May 2008
www.IHStrategies.com
11
Physician Demand*
Anesthesiology 615 Hospitals 2 positions
Gen. Surgery 1,229 Hospitals 1 position
Internal Med. 1,639 Hospitals 3 positions
Cardiology 1,118 Hospitals 1 position
Family Med. 1,762 Hospitals 3 positions
* Advisory Board: Physician Recruitment Attracting Talent in a Competitive Market, May 2008
www.IHStrategies.com
12
Key Issue
Candidates typically narrow decision to “top three” positions
System needs to evaluate what it’s doing to put its opportunity in
top three
www.IHStrategies.com
13
Successful Recruiting
Four lines of questioning successful systems address in the
recruitment process:
How do I attract the candidates I need to fill my practice
openings? Am I reaching the candidate base I need to reach with
the right information?
What is my recruitment process? Am I maximizing my efforts
when candidates arrive to distinguish myself from my
competitors?
How do we structure a fair deal to ensure fair treatment of the
system and the physician?
What am I doing to address the long-term retention of this
candidate (and am I addressing the same concern with my
current physician staff)?
www.IHStrategies.com
14
Initial Steps
Define your recruitment
What position(s) are you trying to fill
What characteristics are you looking for in a physician fit and
finish
Communicate this information to all involved in the recruitment
www.IHStrategies.com
15
Advertising
Utilize multiple advertising modalities
System must reach maximum number of candidates while also
focusing recruitment efforts on those most suited to the position
In-house recruiter
Retained search firms
Internet is critical with today’s tech-savvy candidates
Including top-of-the-line website focusing on technological
advancement and quality of patient care
Outdated websites will strike a negative chord
www.IHStrategies.com
16
Advertising
Quality
System quality initiatives
Recognition and performance awards
Technology
Services offered
Equipment
Patient Satisfaction
System satisfaction scores
www.IHStrategies.com
17
Recruitment Process
Evaluate recruitment process from start to finish
Advertising the position
Sourcing candidates
Interviewing
Take-away materials
Follow-up
www.IHStrategies.com
18
Recruitment Process
Sourcing Candidates
Define initial contact process
Who makes initial contact
When (time frame to respond)
Secondary contacts
Physician from the practice
Recruitment materials
E-mails
Brochures
Organizational structure
Mission/Vision/Values
Bylaws/Rules & Regulations
Sample Contracts
www.IHStrategies.com
19
Recruitment Process
Recruit the spouse/family
Contact the spouse to determine relevant issues
Realty tour
Scenic tour
Community facilities
Educational facilities
Employment opportunities
www.IHStrategies.com
20
Recruitment Process
Interview
Who participates
CEO
CMO
Physicians from practice
Spouses
Other
Where
■ Appropriate local facilities
What
■ Have everyone on the same page on the relevant issues
www.IHStrategies.com
21
Employment Offer
Define materials the candidate leaves with
Leaving empty-handed a critical error
Define follow-up process
Who and when for follow-up contact
Define time-frame for decision
Explore the candidate’s mindset
Define the system’s expectations for the candidate
www.IHStrategies.com
22
Retention Strategies
Turnover is the silent killer of an organization
Turnover is unavoidable
Community issues
Practice issues
Family Issues
Retirement
Prevention is the key
First three years most critical
“Providing clear expectations about compensation” was the most
highly-rated strategy for retention
Personal interaction with leadership and peers
www.IHStrategies.com
23
Retention Strategies
Considerations
If integrating providers for the first time, give consideration to the
organizational structure and chart
If acquiring a physician from private practice, consider the equity
and wealth accumulation opportunities the physician is giving up
by moving away from an ownership model
New physicians out of training are the highest turnover risk
46% of physicians that leave a practice do so within the first 3 years
A successful retention strategy:
Addresses issues physicians face in initial three-year period
Focuses on both financial and non-financial issues of the new
provider
www.IHStrategies.com
24
Retention Strategies
Cash will not totally differentiate your practice
Compensation varies in importance depending on the age of the
physician being recruited
Most practices utilize compensation consultant
Cash offers are becoming “mirror images” of each other
www.IHStrategies.com
25
Retention Strategies
Cash is important, but not the number one issue for younger
physician
Most important factors when choosing a job (in order of
importance)*
* Advisory Board: Physician Recruitment Attracting Talent in a Competitive Market, May 2008
Ages 35 and Younger Ages 36 - 40 Ages 41 and Older
Geographic Location Geographic Location Compensation
Call Schedule Compensation Practice Setting
Practice Setting Practice Setting Geographic Location
Compensation Professional Growth
Opportunity
Professional Growth
Opportunity
Professional Growth
Opportunity
Spouse & Family
Considerations
Spouse & Family
Considerations
www.IHStrategies.com
26
Retention Strategies
Effective retention strategies must pay attention to:
Competitive salary and benefit structures befitting the position
Work schedules
Call schedules
Integration of physician into culture of the organization
Effective socialization of the physician and his/her family within
the community
www.IHStrategies.com
27
Retention Strategies
Role of Physicians and Organizations
Physicians in the recruiting practice will define call schedules,
work schedules
Organization will define evaluation process, interaction with
leadership
Physicians/Organization must jointly work to integrate recruit and
family into the culture of the community and organization
www.IHStrategies.com
28
Retention Strategies
Total Compensation
Variations in cash compensation are insignificant
Private practice allows physicians opportunity for equity in the
practice/retirement wealth accumulation
Systems must focus on strategy to accumulate retirement wealth
“Cash Attracts, But Benefits Retain”
Focus on a benefit strategy designed to retain physicians
www.IHStrategies.com
29
Retention Strategies
Historical benefit retention strategies have focused on
penalizing physician for leaving
“If you leave, we will do this to you”
Non-compete clauses
Cliff-vested investment strategies
Repayment of signing incentives
www.IHStrategies.com
30
Retention Strategies
Changes in IRS regulations make extending the organization’s
tax-exempt status to the physician increasingly difficult
Pending 409A/457(f) regulations
Investments tied to the financial viability of the organization are
not successful wealth accumulation vehicles or successful
retention incentives
www.IHStrategies.com
31
Retention Strategies
Focus new strategies on incentivizing physicians to stay
Systems often cannot offer physicians additional pay or time
Qualified retirement plans inadequate to meet the needs of highly
compensated physicians – increased exposure to market risk
“If you stay we will do this for you”
Long-term investment in wealth accumulation vehicles
Personally-owned investments not tied to corporate solvency
www.IHStrategies.com
3232
Summary
Understand the true recruitment costs in your organization
Position your opportunity to be in the top three choices for
candidates
Retool your process
Screen candidates appropriately
Pay attention to the needs of the candidate
Develop retention strategies that will minimize your turnover rate
Financial retention strategies
Non-financial retention strategies
top related