Recruiting Physicians: How to Attract and Keep the Best Candidates

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1 Bank of America Merrill Lynch White Paper Recruiting Physicians: How to Attract and Keep the Best Candidates Executive summary A growing body of research indicates that the United States will experience a significant shortage of physicians. 1,2,3,4,5 Experts point to several factors that will cause the physician scarcity to accelerate throughout this decade: a growing and aging population, the challenging regulatory environment and additional reimbursement cuts. Healthcare insurance reforms that extend coverage to more people will eventually increase the number of patients of all ages demanding access to medical services. Contents Be patient... 2 Call the candidate... 2 Narrow the list... 3 Schedule on-site interviews... 3 Decide with care... 3 Be responsive... 3 Be positive... 3 Forge connections... 3 Establish a web presence... 4 Look for help... 4 Create safe partnerships... 4 Understand programs... 4 Compensate at market rates... 5 Present a clear offer... 5 Be concise... 5 Engage the family... 5 Let your personality shine through... 6 Commence the credentialing process right away... 6 Start retaining from day one... 6

2 Recruiting Physicians: How to Attract and Keep the Best Candidates 2 Physicians are taking earlier exits from the workforce to retire or move on to other careers. In addition, younger physicians entering the workforce are insisting on a more equitable balance between their personal and professional lives including fewer hours and more predictable work schedules. To combat the looming shortage, many health systems are accelerating their recruiting of primary care and specialty physicians. They are aided by the fact that young physicians coming out of residency and fellowship programs seem more willing than their predecessors to accept life as employees. The promise of a partnership share in a growing practice with a big payoff at retirement doesn t hold the same attraction for younger physicians as it once did for previous generations. As large health systems intensify their efforts to attract physicians, independent medical practices may struggle to attract qualified candidates. Historically, physician recruitment was relatively simple; an advertisement in a specialty journal and telephone calls to a few residency program directors would bring in dozens of curricula vitae from qualified candidates. Except for practices serving a few hard-to-fill specialties or located in hard-torecruit areas, there were plenty of desirable candidates from whom to choose. What proved effective in the past doesn t work today. The physician recruiting market has changed dramatically in the last 10 years into a seller s market. Knowing that the competition for physicians is increasing, it s time to start honing your recruiting practices. Here are some suggestions to fine-tune your recruiting approach to compete with the bigger players: Be patient Regardless of how large or small a medical practice is, bringing in a new physician is much like a marriage. It has to be a good fit. Hurrying through a courtship could result in a mismatch between the new physician and the culture of the organization, ultimately dooming the relationship. If an early retirement, untimely death, or an unexpected departure of a physician from your practice creates an opening that needs to be filled fast, contract with a locum tenens physician. Rushing through the recruiting process is a prescription for a long-term problem. Call the candidate After you receive curricula vitae, call the physicians who interest you. Script a few basic questions to ascertain whether the candidate has an active interest in your practice. Rehearse a few basic facts to share with the candidate about your practice such as mission, size, services and type of community, to give the prospect a high-level overview. Don t make the common mistake of talking the entire time. Be sure to listen to the candidate.

3 Recruiting Physicians: How to Attract and Keep the Best Candidates 3 Narrow the list Select your top five or six candidates based on their background, training and experience. Conduct a formal telephone interview. Schedule on-site interviews Invite the top candidates for on-site interviews. Expect to pay their travel expenses. Decide with care Except in extenuating circumstances, extend your offer only after interviewing the candidate in person at least once. Do so after you carefully and personally check his or her references. You can extend the offer pending verification of credentials, or perform the confirmation of licensure, training and so forth, at this step. Be responsive During the recruitment process stay in touch with your candidates. They are likely evaluating other opportunities, too. At each step of the recruitment process, seek out the candidate s questions or concerns and identify the time frame within which you ll respond. Be sure to also state when you ll be making the hiring decision. You should follow up with the candidate no later than two weeks after the interview. Be positive Spending your time with the physician candidate complaining about the hospital administration, the billing office or a physician colleague is an easy way to drive away a great recruit. Present your practice honestly during interviews, but be positive. Also, share facts about your community. Ask your state and local visitor s bureaus and community development agencies for brochures to send to top candidates. Gather the facts that candidates want to know about your local schools, parks and recreation, shopping, amenities and other assets your town has to offer. Forge connections Pave the way for recruiting before you have a need. Volunteer to teach with a residency program. Allow medical students and residents to rotate in your practice and develop connections with the residency program director. Begin conversations with residents early in their training. Physicians who have already chosen to train in your geographical region are more likely to stay, and your practice may just be the right home for them. Don t wait until residents are almost finished with training to start recruiting them. Surveys indicate that 82% of final-year residents start seriously pursuing opportunities more than one year before completing their training. This compares to just 5% who did so in

4 Recruiting Physicians: How to Attract and Keep the Best Candidates 4 Establish a web presence Make sure your open position is posted on popular physician-search websites. Finalyear residents overwhelmingly cite the Internet as the number one source they turn to for job placement. 7 Use your specialty society s website, websites that specialize in healthcare placement and popular general job placement websites like Monster.com and careerbuilder.com. Medical practices are establishing a presence on social networking sites such as Facebook, Twitter, LinkedIn and other sites where they can attract the attention of physicians who are searching for new positions. Look for help In addition to posting your position on the web, consider engaging your local hospital for assistance in finding candidates. Send your practice brochure to colleagues and residency program directors and consider purchasing lists of physicians in your specialty to whom to send direct mail about your open position. Alternatively, seek the assistance of a physician recruiting firm. Create safe partnerships Hospitals can work with medical practices to provide certain reasonable incentives to help recruit physicians. A general rule of thumb is that the more the physician is needed in the community, the more types of recruiting incentives the hospital can offer. This is no place for guesswork, because Internal Revenue Service rules, federal anti-kickback laws, and the Stark law come into play. Always seek expert advice about physician recruiting plans if financial assistance is extended. Understand programs State and federal programs and incentives may help practices located in rural or urban areas with hard-to-fill physician vacancies. Talk to your state and county medical and specialty societies to see what programs are available. For example, if you are in a designated health professional shortage area, the J-1 waiver program may help your practice attract qualified foreign medical graduates who have completed residency training in the United States and wish to remain instead of returning to their home country.

5 Recruiting Physicians: How to Attract and Keep the Best Candidates 5 Compensate at market rates Although work/life balance is important to today s physicians, the importance of the financial package cannot be overstated. Even several years into practice, physicians are still paying off their medical school debt, which averaged $143,870 for those graduating in That figure doesn t include debt which may have accumulated during residency training when many physicians take on a host of additional expenses, such as starting a new family. Research current market rates for physician compensation through salary surveys, including those available from the Medical Group Management Association and Medical Economics. Note that these surveys are typically published at least a year after the data is current, meaning you might have to offer even more for a popular specialty than the numbers indicate. Present a clear offer The vague deals ( we ll treat you right ) of the past are no longer acceptable offers. When you re ready to extend an offer, be comprehensive and straightforward. Address all aspects of compensation. Where applicable, list a dollar figure to the item on the worksheet. Even if your salary offer may be lower, for example, displaying the actual value of your generous retirement package may get a nod from a recruit who is weighing multiple offers. You may also want to present an overview of your staffing plan every physician gets a dedicated medical assistant and shares a registered nurse, for example. Be concise Put the information about your offer on one or two pages. You ll send the message that there aren t under-the-table deals being made. More than one relationship has crashed when a newly hired physician finds out that another recent recruit got a big signing bonus that he or she wasn t offered. Furthermore, presenting the offer in a clear, concise package helps set realistic expectations for the recruit. If he needs eight weeks of vacation but you only offer three, or if she wants a one-in-seven call rotation but you can only offer a one-in-three rotation, you ll both see how far apart you are and avoid an unnecessary and unsuccessful recruiting process. The Package Salary y Benefits y (health, life, dental and disability insurance) yretirement Equipment y (phone, laptop, etc.) Incentives y or bonus programs ymoving expenses ylocation(s) of practice Work y hours Duration y and terms of weekend and evening call Malpractice y insurance and tail coverage ycontinuing education Vacation, y sick and family medical leave yrestrictive covenants Buy-in y ypartnership track Engage the family Courting the candidate s family is a critical part of the process. Invite the spouse to a dinner with the candidate during the on-site interview. Consider asking a real estate agent to escort the spouse to neighborhoods, parks and schools in the community while interviews take place. Find out the spouse s profession so you can highlight local career opportunities. Some practices assign a mentor to the spouse to help answer questions that may come up later. Once the physician is hired, arrange for a spouse orientation meeting where he or she can meet the practice staff and learn more about the practice and the community. Savvy practices know that you are recruiting and retaining the spouse as much as you are the physician.

6 Recruiting Physicians: How to Attract and Keep the Best Candidates 6 Let your personality shine through Every practice has its own personality, whether it is physicians and staff working as a team or multiple independent physicians working under the same roof. Allowing the personality of your practice to come through is important to ensuring the best match. Commence the credentialing process right away The process of credentialing and enrolling a provider can take up to six months for insurance payers, so timeliness is important. You ll need to get the credentialing and provider enrollment process started as soon as the new physician commits. Start retaining from day one Despite your efforts to create a solid marriage, many physicians leave practices each year. This turnover is costly for your practice and disruptive to patient care. Research indicates that of the 6.1% of physicians who left medical practices in 2008, fully half did so because the practice was a poor cultural fit for them. 9 This percentage is significantly higher than those who said they left for higher compensation (26%) or excessive call (6%). 10 Physician retention is another reason to create and sustain a great culture. Most physicians seek an environment that emphasizes patient care and also is collegial. They want to work where all physicians take personal responsibility for solving problems, are willing to work hard for their patients and can contribute to the success of the entire group. Strategies to recruit physicians have changed dramatically in the past 10 years. The best strategy is to hire the right physician in the first place. If you haven t been in the physician recruiting market lately, consider these tips as places to start so you can compete for the best physician who is the ideal match for your practice and its patients. For more information about Bank of America Merrill Lynch Healthcare Financial Solutions, go to bankofamerica.com/healthcare. 1 Health Resources and Services Administration, Physician Supply and Demand: Projections to 2020 (October 2006) 2 Council on Graduate Medical Education, Physician Workforce Policy Guidelines for the U.S. for (Rockville, MD: U.S. Department of Health and Human Services, 2005) 3 Merritt, J., J. Hawkins, et al, Will the Last Physician In America Please Turn Off The Lights? A Look at America s Looming Doctor Shortage (Irving, TX: Merritt Hawkins & Associates, 2004) 4 Practice Support Resources, Inc.; Association of American Medical Colleges, The Complexities of Physician Supply and Demand: Projections through 2025, (October 2008) 5 Association of Academic Health Centers, Out of Order, Out of Time (2008). 6 Merritt Hawkins & Associates, 2008 Survey of Final-Year Medical Residents. Accessed August 30, 2010 at pdf/2008-mha-survey-medical-residents.pdf. 7 Ibid. 8 Association of American Medical Colleges Medical School Graduation Questionnaire (October 26, 2009). Accessed August 30, 2010 at Physician Retention Survey, AMGA and Cejka Search as reported in Poor economy makes physicians less inclined to leave a practice but work-life balance remains a big issue. Accessed August 30, 2010 at 10 Merritt Hawkins & Associates, 2008 Survey of Final-Year Medical Residents. Accessed August 30, 2010 at pdf/2008-mha-survey-medical-residents.pdf. Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation ( Investment Banking Affiliates ), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., all of which are registered broker dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured May Lose Value Are Not Bank Guaranteed Bank of America Corporation F

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