Locum Psychiatrist use in New Zealand
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1 Locum Psychiatrist use in New Zealand A Stock Take and Review of the Issues Prepared for the Mental Health Commission by: Henry Harrison Harrison Ferguson Associates
2 Table of Contents TABLE OF CONTENTS... 1 TABLE OF FIGURES... 1 BACKGROUND... 2 METHODOLOGY... 2 STOCK TAKE FINDINGS... 3 DATA SUMMARY... 3 THE LOCUM PSYCHIATRIST POPULATION... 3 RECRUITMENT... 5 COST... 8 SERVICE ISSUES... 9 MAKING IMPROVEMENTS STANDARDISING ORIENTATION AND INDUCTION MINIMISING THE MARKET EFFECTS ON LOCUM COSTS ALTERNATIVES TO THE CURRENT APPROACH CONCLUSIONS APPENDIX ONE DATA TABLES AND QUESTIONNAIRE Table of Figures FIGURE 1: AGE DISTRIBUTION... 3 FIGURE 2: GENDER MIX... 4 FIGURE 3: DISTRIBUTION OF NATIONALITIES... 4 FIGURE 4: LOCUM USE BY DHB... 5 FIGURE 5: RECRUITMENT ORIGIN... 6 FIGURE 6: COUNTRY TO WHICH LOCUM DEPARTED
3 Background Early in 2004 District Health Board Mental Health Managers and Clinical Directors raised concerns at the cost and time involved in the recruitment and use of locum psychiatrists 1 within mental health services nationally. The Mental Health Commission has undertaken this stock take of locum psychiatrist usage in order to gauge the extent and depth of the problems. Methodology The stock take has consisted of two parts, the first being a questionnaire (attached as Appendix 1) sent to all 21 District Health Boards, of which twelve were returned, a completion rate of 57%. The second part consisted of a follow up phone call where required, for clarification and amplification of the questionnaire response. The stock take specifically addressed the use of locum psychiatrists in the financial year 2002/03. It has concentrated on three primary areas of interest, being recruitment, cost of locum psychiatrists, and impact (both positive and negative) on service provision. This report covers each of those three areas in turn, and then concludes with some general observations on the issues identified in the stock take. 1 Definitions: A psychiatrist is a senior medical officer, who would, if employed in a community mental health service, be counted as an FTE or part thereof, under MHCS01B, MHCSO6B, or MHCS08B, in reporting. A locum psychiatrist is a psychiatrist who is not a permanent employee. 2
4 Stock Take Findings Data Summary 12 out of 21 questionnaires returned 85 locum psychiatrists used by those 12 DHBs Length of use ranging from a few days to in excess of 12 months The Locum Psychiatrist Population Age: The age distribution of locum psychiatrists showed that over half were 50 years of age or older, and almost a third were aged 60 or over. Age Distribution 9% 11% 2% 21% 13% Not given % 21% Figure 1: Age Distribution Over 45% of the New Zealand locums were aged 50 years or over, with 9% aged 65 or over. Seventy percent of the United States locums were aged 50 or over, but again only just over 9% were aged 65 or older 2. While retirees do not make up a large portion of the locums in use, it is clear that where overseas recruits are concerned, older locums are the rule rather than the exception. 2 All percentages consist of number of locums against the total number whose age is known, and the 9 locums where age has not been given have been excluded. 3
5 Gender: Males made up a ratio of nearly three to one versus females. Several DHBs recruited no female locum psychiatrists at all during the period. Gender 27% Male Female 73% Figure 2: Gender Mix Nationality Other South African Canadian Australia UK USA New Zealand New Zealand USA UK Australia Canadian South African Other Number Figure 3: Distribution of Nationalities Nationality: The United States made up the largest single national group of locum psychiatrists. The other grouping was next, consisting of a range of 4
6 Asian and Middle Eastern nationalities. New Zealanders followed this group. Perhaps of most interest, was the complete lack of Australians in the mix. Locum Psychiatrist Utilisation There is a wide variety in patterns of use of locums by different DHBs. Numbers of locums used by each DHB in the period range from 2 to 23, with a median of 4, lower quartile of 3.5, and upper quartile of 8. DHB Locum Use Auckland Canterbury Counties Manukau Hawkes Bay Hutt Valley Lakes Nelson/Ma rlborough Otago Pacific Tairawhiti Waikato Waitemata Whanganui Series Figure 4: Locum Use By DHB Locum psychiatrists as a cost of the total spend on Senior Medical Officers in the DHB mental health service range from a low of 1.2% to a high of 63.6%. Generally, urban DHBs have a lower percentage of total spend and provincial DHBs a higher cost of locums as a percentage of their total SMO cost. However, two of the provincial DHBs were notable by having lower than average expenditure on locums as part of their total SMO cost. Recruitment The distribution of locums at their point of recruitment, and at their point of departure, is little changed, as the following two graphs make clear. Comments on the recruitment issue identified only two locum psychiatrists shifting from locum to permanent employment in the time period. Overall, the numbers in each group remain stable, 28 New Zealand based locums commencing and remaining, and 38 USA based doing the same. Clearly, there is little evidence to support a contention that locum use is an efficient means of recruiting for long term or permanent employment. 5
7 Recruitment Origin India Not given South Africa Canada Australia UK USA New Zealand New Zealand USA UK Australia Canada South Africa Not given India Number Figure 5: Recruitment Origin Departed To India Not given/known South Africa Canada Australia UK USA New Zealand New Zealand USA UK Australia Canada South Africa Not given/known Number India Figure 6: Country to which locum departed District Health Boards have used a range of strategies to recruit locum psychiatrists. The two most popular have been the use of direct approaches via word of mouth, and the use of recruitment agencies. Responses stressed the importance of providing a wide range of information sources for overseas doctors, including website and written material. Targeting of senior trainees to 6
8 retain as permanent or temporary staff was also mentioned as an effective strategy. The two principal impediments to recruitment that were identified were the level of remuneration available in other countries, and the location of the recruiting DHB (if rural or provincial based). Other impediments noted included: Level of funding for Senior Medical Officer positions Competitive bargaining by recruitment agencies Limited availability of local applicants Length of time to complete Medical Council processes In general, psychiatrist recruitment was not part of a combined senior medical recruitment strategy on the part of the DHB, but managed through the mental health services. Where known, the use of locum psychiatrists was generally higher than that of other senior medical specialists within the same DHB. Respondents were asked to comment on the perceived difficulty of recruiting psychiatrists, and how that was changing over time. A marked difference was evident between provincial and urban DHBs, with the former viewing recruitment as increasing in difficulty, and the latter citing some local improvement, possibly linked to improved numbers of local graduates of psychiatry training. Difficulty in recruiting sub-specialities such as Child Psychiatry was noted as being greater. Recruitment for senior roles such as Clinical Director or Director Area Mental Health Service (DAMHS) is also noted as more difficult than general psychiatrist recruitment. 7
9 Cost The quality of cost information available in a short stock take of this nature is of necessity limited. For example, the total cost of psychiatrists in the 2002/03-year was not readily available in all DHBs. Some DHBs use payroll for permanent staff, and pay contract staff such as locums through different account systems, with the consequence that different administrative sections are responsible for each. Accordingly, the following cost information should be treated as indicative, rather than conclusive. As noted earlier, DHBs use individual locums for employment periods ranging from a few days to in excess of 12 months. Locums are employed in both full time and part time roles, with some respondents noting a preference of locums to undertake on call duties rather than a full time role. Average direct expenditure by DHBs on locums ranged from $30,000 to $120,000, with minimums for individual locum below $10,000 and maximums exceeding $280,000 (though for periods exceeding the 2002/03 financial year). DHBs direct expenditure on locum psychiatrists as a percentage of direct expenditure on total psychiatrists ranged from a low of 1.2% to a high of 63.6% (n=10). Half of those DHBs had figures of less than 7% locum costs. Two DHBs spent over half of their total psychiatrist spend on locums. DHBs provided an estimate of the indirect costs of using locum psychiatrists. Accounting handling of such factors as leave and Continuing Medical Education time may account for some of the variations in these estimates. Estimates ranged from 4-50%, with 7 of the 12 DHBs reporting a figure in the range of 15-27%. DHBs who commented were evenly divided on the comparative costs of psychiatry locums with other senior medical specialties, but half were unable or unwilling to comment. DHBs who had raised the issue with the Commission initially were concerned about the cost in staff time of recruitment of psychiatrist generally. DHBs reported their estimates of staff time spent on recruitment of psychiatrists. In three DHBs, a specific recruitment coordination role existed, who spent anything from 25-55% of their time on psychiatrist recruitment. In the other DHBs who replied, clinical and management staff were involved in recruitment activities, with support from clerical and human resource functions. Senior staff (both management and clinical) were estimated to spend between 5 and 10% of their time on SMO recruitment, with other managers around 10%, and support staff around 5%. While these figures are not insignificant, one gains a sense from responses that when a service is short of a psychiatrist or two, the effort and time expenditure (and concern) increases sharply, and that the average does not reflect the concern felt at times of greatest pressure. 8
10 Service Issues The principal issue of concern regarding the use of locum psychiatrists, which was raised by each DHB, was the impact of a continuing change of doctors on the continuity of service to service users. Concern was also expressed at the consequent changes in treatment preference, style, or mode, bought about by the change in specialist psychiatrist. Cultural and language difficulties were also cited as having negative impacts on service users. Locums were principally used to address specific gaps, with occasional use to fill general gaps. Negative impacts of locum use (which were offset by the greater negative impact of having no psychiatrist in post at all) included: Impact on existing teams, workload, and adaptation Orientation and training investment High management supervision time and requirements Destabilising effect on permanent workforce through comparison of pay and other benefits Increase in non-medical leadership of teams Positive impacts of locum use on services included: The introduction of new ideas and fresh approaches Strong contribution to service overall Provided opportunity to change service delivery, through relieving permanent staff to allow service re-engineering Good quality people Short term support to relieve gaps/vacancies/pressure Services used a range of strategies to minimise the potential negative effects. These included a strong emphasis on monitoring, supervision and peer review by other Senior Medical colleagues, a large investment in orientation, careful screening, appointment, placement, and where possible, reusing the same locums again. 9
11 Making Improvements Given the rate of training of new psychiatrists, the global and local demand for psychiatrists, and the gap yet to be filled in order to meet Blueprint targets, it is clear that locum psychiatrists will remain an important feature of New Zealand s mental health system in years to come. What steps can be taken to improve the use of locum psychiatrists, and get better value for service users, for the locums themselves, and for District Health Boards? Standardising Orientation and Induction Every DHB responding to the survey reported a strong concentration on orientation as a key factor to getting the best value from locum psychiatrists. While there is no doubt a range of individual differences between DHBs, there is a set of common elements that could well make up a standardised orientation to practising locum psychiatry in New Zealand. These might well include: New Zealand, the place, the culture, The New Zealand Health system, the role and place of the medical practitioner in New Zealand society New Zealand s mental health system, its laws, common medications, medico-legal roles and responsibilities, the College of Psychiatrists etc. A standardised orientation and induction process could also be used to inform service users and other mental health staff of the knowledge base which locum psychiatrist have upon entering employment within a particular DHB. Minimising the Market Effects on Locum Costs New Zealand competes with a number of other Western economies for skilled labour, and the field of psychiatry is no exception. New Zealand has difficulty matching remuneration offered in countries such as Australia, Canada, Britain, and the United States, and therefore relies in part on lifestyle factors such as tourism to offset the drop in direct pay experienced by locums working here. However, the global market is only one of the forces that drive up the cost of locums. Local inefficiencies such as duplicated recruitment and orientation costs may also be having a negative effect. DHBs also report a local market in operation, whereby competition between DHBs for a particular locum may be used by a recruiting agency to drive up price. The greater number of trainees coming through the registrar training program is reported as having a positive effect in the urban centres. This is partially offset by the anecdotal evidence of the impact of student loan repayment on young professionals entering their careers. 10
12 Indirect costs of locum use amount to a significant part of the total cost of locums. Reducing these costs through a more standardised set of terms and conditions would enable a higher level of remuneration to be offered, thus potentially widening the available range (and quality) of locums on offer. Alternatives to the current approach New Zealand has a comparatively small population. At times, trading local control for national efficiencies of scale has much to commend it. A national approach to the recruitment of locum psychiatrists is one that is worth serious consideration. Such an approach need not reduce completion, but can certainly reduce the indirect costs associated with the current recruitment of locum psychiatrists. A national approach could take a number of different forms. A nationally coordinated or driven process could for example use a tendering approach, where different recruitment agencies bid to provide a certain volume of locum hours. Alternately, it might be the operation of a national clearinghouse, matching DHB vacancies with locum psychiatrists. Using a tendering model as an example of how a national approach might operate, we can see a range of detailed possibilities that may apply equally well to other approaches. 1. Predict demand Develop a national demand profile for locum psychiatrists, identifying seasonal and other variations Ultimately this sort of approach should be able to use the Mental Health Workforce Information System (MHWIS) Current issues regarding the use of MHWIS include: o The speed of the implementation schedule o Whether DHBs are paying locums through payroll (data prospectively available through MHWIS) or as a contract expense against their general ledger In any event, MHWIS should be able to provide psychiatry vacancy information, if not locum utilisation, on a national basis. Such information will eventually be adequate for predicting national locum demand 2. Prepare an annual/three yearly tender Demand projection, to establish a tendering scope (90% of demand, 100%?) Management of initial recruitment, either directly or as part of the tender requirements The tender could include 11
13 o The number of locum hours required (respondents could offer to supply all or part) o Availability performance criteria o An approved induction programme to New Zealand and the practise of psychiatry in the New Zealand Mental Health system o Cost prediction and control The tender would need to identify payment mechanisms for the both the provision of locum availability, and the locums themselves. The tender design should include incentives that favour o Locums who are already familiar with the NZ system and vice versa o Locums who are ready to practise o Strong relationships - recruitment agency/dhb services o Longer term stays The aim would be to produce a predictable supply of ready to practise locums on demand, at best cost within the international market, minimising internal (national) market costs, as well as indirect costs 3. Govern and manage process DHBNZ or a joint panel of interested DHB representatives (clinical and service users) could function as the governance body The governance body could employ tendering staff, or alternately could contract out the whole function to specialist HR agency with DHB panel oversight 4. Ensure performance Performance indicators for the process as a whole could include: o Availability of locums as required to a tolerance of one week/98% o Total indirect cost of this part of the recruitment process should be set at a % of total tender value Naturally, to implement an approach like this, the governing body would need to consult recruitment agencies that would be affected by the change. Several of the components of a tendering approach, for example a national induction process, could be applied in slightly different form in a national clearinghouse or other national approach. 12
14 Conclusions Locum psychiatrists are widely used throughout the New Zealand mental health sector, and fulfil a valued role. DHBs are concerned at the level of their use, and the impact such use has on the quality and particularly continuity of service for service users. The use of relationships through existing staff or recruitment agencies is seen as key by DHBs to their effective recruitment of locums and other psychiatrists. Indirect costs of using locum psychiatrists are quite high. Given that, it is interesting that no Australian psychiatrists were used by the DHBs responding to the stock take, in that the presumed indirect cost of Australians would be less, due to common College membership. Few locum psychiatrists desire permanent appointments, and few take them up. The general sense obtained from the stock take is that locums are valued for the support and experience that they bring, but that DHBs would much prefer to make permanent appointments. In one respondent s view, locum psychiatrists are expensive, potentially disruptive (positively and negatively), and unfortunately necessary. If we accept that necessity, then there are many ways of making improvements. DHBs have more in common regarding their requirements than they have differences. Standardised recruitment and induction and reducing the costs of the internal market both have merit. A coordinated national approach to these issues, as set out above is one option that is definitely worth considering. 13
15 Appendix One Mental Health Commission Locum Psychiatrist Stock Take Project Data Tables and Questionnaire Definitions: A Psychiatrist is a senior medical officer, who would, if employed in a Community Mental Health service, be counted as an FTE or part thereof, under MHCS01B, MHCSO6B, or MHCS08B, in reporting. A Locum Psychiatrist is a Psychiatrist who is not a permanent employee. All questions and data in this table relate to the 2002/03 Financial Year This questionnaire is divided into three sections, being recruitment, cost, and service issues. We suggest that the sections are detached and forwarded to the appropriate part of your DHB for completion. Please return completed questionnaires to: District Health Board: General Manager: 14
16 Mental Health Commission Locum Psychiatrist Stock Take Project Section 1: Recruitment 1. How many permanent FTE psychiatrists do you employ if fully staffed? 2. Who (role/title) is responsible for the recruitment of psychiatrists within your DHB? 3. What percentage of their time (estimated) is spent on psychiatrist recruitment? 4. What is the time (estimated) spent by other personnel on psychiatrist recruitment per annum? 5. Is psychiatrist recruitment part of a combined senior medical recruitment strategy? 6. What recruitment strategies have been most helpful to your service? 7. What are the impediments to recruitment? Please complete the following table for each locum psychiatrist you employed in the 2002/03 financial year. Please do not provide identifying information # Age M/F Nationality Country of recruitment 1 Where did they depart to?
17 Mental Health Commission Locum Psychiatrist Stock Take Project Section 2: Cost Comparison 1. What was the total direct expenditure by your DHB on psychiatrists in 2002/03 3? Please complete the following table for each locum psychiatrist you employed in the 2002/03 financial year. Please do not provide identifying information # Start Date 1 End Date Direct Cost (total period) Indirect Cost (total period) Is the percentage cost that Locum Psychiatrists make up of your total Psychiatrist cost comparable to that of locum costs within other senior medical specialties within your DHB? Please provide examples if available: 3 Salaries and related costs for all psychiatrists, both employees and locum psychiatrists, but not including indirect costs, such as advertising, agency fees, travel and location costs, and similar. 16
18 Mental Health Commission Locum Psychiatrist Stock Take Project Section 3: Service Issues 1. What issues do the use of locums raise for your service? 2. What are the advantages of employing locums? 3. Are the issues and problems of recruiting psychiatrists changing? If so, in what way? 4. What do you see as the impacts for service users of employing locum psychiatrists? 5. What do you see as the impacts for other staff of employing locum psychiatrists? 6. What strategies do you use to minimise the potential negative impacts of locum psychiatrists (if any)? 7. Do you use locums to replace specific staff, for specific clinical areas, or to fill gaps generally? 8. Is there anything else you would like to tell us concerning locum psychiatrists? 17
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