AASA PHYSICIAN RECRUITING AND COMPENSATION TRENDS

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1 AASA PHYSICIAN RECRUITING AND COMPENSATION TRENDS

2 OUR AGENDA 1. The state of the physician workforce 2. Physician recruiting incentives and trends

3 OUR FRAGILE, FRAGMENTED PHYSICIAN WORKFORCE PART 1

4 HOW DID WE GO FROM THIS

5 TO THIS?

6 WELCOME TO THEIR WORKING WEEK AFTER 4 YEARS OF COLLEGE, 4 YEARS OF MEDICAL SCHOOL, 3 TO 7 YEARS OR MORE OF TRAINING Third parties control their fees Tell them how to treat patients Require hours of paperwork Sue them on a whim Require them to change their practice structure/processes Make them question their career choice

7 PHYSICIAN SUICIDE An estimated 400 physicians commit suicide each year, the equivalent of one entire medical school class. The physician suicide rate is 20% to 30% higher than the general public s. Source: Louise Andrew, M.D. ET AL. Physician Suicide, Medscape Reference, March 8, 2012

8 FROM WHAT HAS CHANGED AND WHAT HAS NOT

9 A HAMBURGER IS STILL A meat patty and lettuce on a bun cents 2010.$1

10 BUT MEDICINE IS NO LONGER A PREMIER PROFESSION Just ask Physicians The day will come when the practice of medicine will have no more appeal than digging ditches with an overseer standing next to you with a whip.

11 A SURVEY OF 14,000 PHYSICIANS REVEALS THE STATE OF THE UNION Coming September 24, 2012

12 KEY FINDING: DOCTORS ARE ON THE BRINK Physician morale and optimism are at an all time low. Physicians are disengaging from the practice of medicine, seeing fewer patients and working fewer hours Source: The Physicians Foundation/Merritt Hawkins 2012 Survey of Physicians and Health Reform

13 WILL THEY STRIKE?

14 OKAY, DOCTORS ARE UPSET. SO ARE A LOT OF PEOPLE. WHY DOES IT MATTER?

15 BECAUSE EVERYONE NEEDS A DOCTOR THE FIRST PERSON YOU SEE COMING IN THE LAST PERSON YOU SEE GOING OUT

16 BUT NOT EVERYONE IS GOING TO SEE ONE A Growing Gap: The Coming Gap Between Physician Supply & Demand (2020) Demand 1.1 Million Supply 0.9 Million Source: Council on Physician and Nurse Supply

17 PROJECTED SHORTAGE OF PHYSICIANS BY SPECIALTY BY 2025 Doctor Deficits Primary care 46,000 (37% deficit) Surgery.41,000 (33% deficit) Other patient care 29,000 (23% deficit) Medical specialties.8,000 (7% deficit) Source: Association of American Medical Colleges/Modern Healthcare/December 1, 2008

18 IN AN ERA OF PHYSICIAN SHORTAGES, HOW DOCTORS PRACTICE IS AS IMPORTANT AS HOW MANY THERE ARE AMERICA S 750,000 PATIENT CARE PHYSICIANS ARE FRAGMENTING

19 WHAT DO YOU PLAN TO DO IN THE NEXT ONE TO THREE YEARS? Continue as I am % Cut back on hours.22.0% Retire 13.4% Switch to concierge 6.8% Relocate to another practice/community 10.9% Cut back on patients seen 9.6% Seek a non-clinical job within healthcare 9.9% Work part-time 6.5% Work locum tenens.6.4% Seek a non-healthcare job/business.6.4% Close my practice to new patients.4.0% Seek employment with a hospital 5.6% Other..5.5% Source: The Physicians Foundation/Merritt Hawkins 2012 Survey of Physicians and Health Reform

20 THE COMMON DENOMINATOR? PHYSICIANS WILL PRACTICE IN A GROWING NUMBER OF WAYS.MOST OF WHICH WILL REDUCE ACCESS TO THEIR SERVICES PART-TIME CONCIERGE HOSPITAL EMPLOYED LOCUM TENENS NON-CLINICAL ROLES ELMINATE CERTAIN PAYERS (MEDICAID/MEDICARE/CHARITY) COMMUNITY HEALTH CENTERS TRADITIONAL (INDEPENDENT) Source: The Physicians Foundation/Merritt Hawkins 2012 Survey of Physicians and Health Reform

21 RESULT: A SILENT DEFECTION Physicians are seeing 16.5% fewer patients per day than in 2008 They are working 6% fewer hours They spend 22% of their time on non-clinical paperwork Source: A Survey of America s Physicians: Practice Patterns and Perspectives, The Physicians Foundation/Merritt Hawkins, 2012

22 A SILENT DEFECTION A 6% reduction in work hours = a loss of 44,250 FTEs 16.6% fewer patients seen per = over 100 million fewer patient encounters 22% of time spent on paperwork = a loss of over 165,000 FTE s

23 WHAT DOES THE FUTURE HOLD? Variations by respondent type: Employed physicians see 17.35% fewer patients per day than owners Female physicians see 13.7% fewer patients per day than males Physicians less than 40 see 4.04% fewer patients per day than those over 40 Source: The Physicians Foundation/Merritt Hawkins 2012 Survey of Physicians and Health Reform

24 THE MOVE TO EMPLOYMENT INDEPENDENT PHYSICIANS: % % % % Source: Accenture Analysis. MGMA American Medical Association

25 THERE WILL BE TWO TYPES OF PHYSICIANS: THOSE WHO NEVER VISIT THE HOSPITAL AND THOSE WHO NEVER LEAVE IT 77% of doctors to be employed by 2013, up from 43% in 2000 Source: Accenture

26 MEDICAL PRACTICE IS EXPERIENCING A PROFOUND TRANSFORMATION FROM AN ART TO A TRADE Responsibility for the task, not the patient

27 TENS OF THOUSANDS OF FTES WILL BE LOST, JUST IN TIME FOR..HEALTH REFORM Source: Joint Economic Committee

28 HEALTH REFORM: UP TO 32 MILLION UNINSURED COVERED PREVENTIVE SERVICES PROVIDED NO DEDUCTIBLES AND NO CO-PAYS Source: PPACA

29 HOW MANY MORE PCs? 32 million newly insured patients X 2 additional patients visits per year = 64 million patient visits divided by 4,000 = 16,000 additional primary care doctors Source: The Lewin Group

30 HOW MANY MORE SURGEONS? Our 20 specialty societies already have issued reports projecting shortages. Source: American Association of Medical Colleges

31 WHO WILL SEE PATIENTS? Medicare reimbursement may fall below Medicaid levels by Medicare/Medicaid now covers 110 million people. Source: The Health Care Maze, Richard Reece, M.D.

32 REFORM: CONSPICUOUS FOR WHAT IT DID NOT DO Does not remove the cap on GME funding Just 889 new residency slots through redistribution Source: PPACA

33 WHAT S EMERGING? A NEW WORKFORCE PARADIGM THE CONE OF COMPLEXITY Medical specialists Primary care physicians Pharmacists (Pharm D) Advanced practice Nurses/PAs Nurse specialists Therapists LPNs Nurses aides

34 STAFFING PLANS MUST INCORPORATE ALL TYPES OF PHYSICIANS Employed.(over 50% of all doctors) Independent Full-time Part-time Concierge On-site Remote (telemedicine) Locum tenens Male Female International

35 A NEW MARKET Physician recruitment strategies and incentives driven by a buyer s market.

36 PART 2: RECRUITING INCENTIVES WHAT IS YOUR BAIT?

37 CONTRACTS WHAT ARE THEY FOR? For Physicians, Fear of Loss Outweighs Potential For Gain THE INCOME OFFER IS ALL ABOUT CREDIBILITY

38 CONTRACTS WHAT ARE THEY FOR? Don t Go Into the Market if You Don t Have a Contract

39 CONTRACTS WHAT DO THEY COVER? STANDARD RECRUITING CONTRACTS TODAY TYPICALLY WILL COVER Work status Independent? Employee? Shareholder? Partner? Salary and production bonus the 50% model Income guarantee forgiveness clause? Educational loan forgiveness Non competes prohibited by Stark? Hours/duties/call coverage/vacation Path to partner Benefits Termination Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

40 MERRITT HAWKINS 2012 REVIEW OF PHYSICIAN RECRUITING INCENTIVES Top Ten Physician Assignments: 1. Family practice 2. Internal medicine 3. Psychiatry 4. Hospitalist 5. General surgery 6. Emergency medicine 7. Orthopedic surgery 8. OB/GYN 9. Pediatrics 10.Pulmonology

41 MOST IN-DEMAND AS A PERCENT OF ALL PHYSICIANS PER SPECIALTY Pulmonology Hem/Onc Family medicine Endocrinology Urology General Surgery Orthopedic surgery Dermatology Psychiatry Otolaryngology Internal medicine Pediatrics Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

42 SETTINGS OF SEARCH ASSIGNMENTS Hospital employed % 11% Group practice 16% 42% Partnership 8% 22% Community health center 6% N/A Solo 1% 20% Association 1% 3% Other 5% 2% Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

43 IF PARTNERSHIP, TIME TO PARTNERSHIP IMMEDIATE 2% ONE YEAR 32% TWO YEARS 53% THREE YEARS 12% FOUR YEARS 1%

44 AVERAGE INCOME General Surgery GENERAL SURGERY Compensation ranges from $313,665 to $387,692 AMGA $387, % MGMA $352, % Merritt $343, % Hay $321, % HHCS $313, % MGMA Academics S365,310 N/A % change Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives data

45 AVERAGE INCOME Cardiology (invasive) CARDIOLOGY (invasive) Compensation ranges from $377,153 to $519,512 AMGA $519, % Merritt $512, % MGMA $500, % Hay $451, % HHCS $377, % MGMA Academics $374,335 N/A % change Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives data

46 AVERAGE INCOME Gastroenterology GASTROENTEROLOGY Compensation ranges from $299,432 to $481,347 MGMA $481, % AMGA $480, % Merritt $433, % Hay $372, % HHCS $299, % MGMA Academics $319,578 N/A % change data Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

47 AVERAGE INCOME Orthopedic Surgery ORTHOPEDIC SURGERY Compensation ranges from $423,600 to $545,628 AMGA $545, % MGMA $520, % Merritt $519, % HHCS $453, % Hay $423, % MGMA Academics $549,627 N/A Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives % change data

48 AVERAGE INCOME Plastic Surgery PLASTIC SURGERY Compensation ranges from $303,000 to $444,312 AMGA $444, % MGMA $420, % HHCS $349, % Hay $332, % Merritt $303, % MGMA Academics $529,378 N/A % change data Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

49 AVERAGE INCOME Urology UROLOGY Compensation ranges from $302,191 to $461,000 Merritt $461, % AMGA $444, % MGMA $417, % Hay $344, % HHCS $302, % MGMA Academics $424,567 N/A % change Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives data

50 TYPE OF INCENTIVE OFFERED Salary 18% Salary with production bonus Income guarantee 73% 7% (down from 41% in 2004) Other 2% Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

51 IF SALARY, PLUS PRODUCTION, WHAT TYPE OF PRODUCTION BONUS? RVU BASED 54% QUALITY BASED 35% (Up from 7% last year) NET COLLECTIONS 33% GROSS BILLINGS 5% PATIENT ENCOUNTERS 5% OTHER 3% Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

52 PHYSICIAN PRODUCTIVITY FROM VOLUME TO VALUE 2011 MGMA SURVEY.62% of physicians had incentivebased compensation tied to quality metrics, compared to only 21% in Only between one and ten percent of physician compensation can be achieved through reaching quality goals.

53 SUBJECTIVE METRICS BEING ADDED TO THE MIX Metric Patient satisfaction 20% 61% Peer review 6% 18% Administrative/ governance 15% 39% Community outreach 2% 9%

54 THREE COMP MODELS USED BY EARLY ADOPTERS Example A Physician can earn up to 5% of his or her base as additional bonus income by: Achieving minimum average level of patients per day Exceeding practice average for patient satisfaction scores Correctly documenting in charts Appropriately coding and billing Good citizenship (peer review, community relations, etc.)

55 THREE COMP MODELS USED BY EARLY ADOPTERS Example B Physician can earn a fixed $20,000 bonus annually if thresholds met for: * sufficient patient satisfaction scores * accuracy of charting/emr data input * participation in quality improvement projects No fluctuation based on specialty or base salary

56 THREE COMP MODELS USED BY EARLY ADOPTERS Example C Physician can earn up to 10% of base as a quality bonus if thresholds met or exceeded for key quality indicators that vary by specialty and an additional 5% for a citizenship component (peer review, governance committees, etc.) ALL EXAMPLES MOVE THE NEEDLE TOWARD VALUE, BUT

57 VOLUME IS STILL KEY GROWING USE OF RVU S MGMA PHYSICIAN COMPENSATION AND PRODUCTION FORMULA % of physicians have compensation tied to RVUs % of physicians have compensation tied to RVUs

58 INCOME GUARANTEES A LIVING DINOSAUR Net collections 76% Gross collections 24% Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

59 TERM OF INCOME GUARANTEE 1 year 45% 2 years 44% 3 years 11% Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

60 RELOCATION HOSPITALS/GROUPS OFFERING RELOCATION.95% AVERAGE RELOCATION ALLOWANCE $10,035 Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

61 SIGNING BONUS SEARCHES OFFERING A SIGNING BONUS.80% AVERAGE BONUS.$23,388 Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

62 CONTINUING MEDICAL EDUCATION SEARCHES OFFERING CME.98% AVERAGE CME AMOUNT..$3,391 Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

63 ADDITIONAL BENEFITS Health Insurance.97% Malpractice.99% Retirement..82% Disability..75% Education forgiveness..26% Housing allowance 5% Other.1% Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

64 TERM OF EDUCATION FORGIVENESS 1 year 6% 2 years 27% 3 years 67% Source: Merritt Hawkins 2012 Review of Physician Recruiting Incentives

65 TRENDS IN ACADEMIC PHYSICIAN RECRUITING A more challenging environment 77% of academic centers rate physician recruiting a top priority followed by funding (76%) and diversity (69%)

66 TODAY S RECRUITMENT CHALLENGES External Challenges Other Universities and teaching facilities 137 Medical schools and teaching hospitals Financial disparity between the community market and academic market Perception Regional Bias *AMA statistics based on 2011 trainees

67 TODAY S RECRUITMENT CHALLENGES Internal Challenges Practice Structure Candidate Qualifications Financial Package Allocation of internal resources Academic bureaucracy Recruiting Process Sense of Urgency

68 TRENDS IN ACADEMIC RECRUITING The Talent Drain 47% of final year residents received over 100 or more job solicitations

69 COMPARING THE ACADEMIC CANDIDATE TO THE COMMUNITY CANDIDATE Motivation for seeking a change Experience CV's Trailing spouse syndrome Non-academic geographically and financially motivated to make a change fresh out of training is usually acceptable short and concise - educational and work history focused spouse will be looking for employment in various fields Academic motivated by research and collaboration opportunities previous fellowship training plus 3-5 years of teaching experience long - includes publications, presentations, lectures, and research interests more often, spouses are also academic physicians Priorities in a practice quality of life: schedule, block time for research, departmental support from university, number of faculty, environment call, volume, size of town reputation of the program and leadership based on history of contributions interview availability week's notice 1 month advanced notice

70 TYPICAL COMMUNITY AND ACADEMIC SEARCH TIMELINE time to evaluate a cv / decide to interview time from invitation to interview 3 days 2 weeks 2 weeks 5 weeks time from interview to offer 4 weeks 3 days

71 TYPICAL COMMUNITY AND ACADEMIC SEARCH TIMELINE time from offer to final acceptance time from acceptance to start 4 weeks 1 week 14 weeks 24 weeks

72 TYPICAL COMMUNITY AND ACADEMIC SEARCH TIMELINE Start of search to start of employment 4.5 months 9.5 months

73 A CHANGING LANDSCAPE Medicare cuts Community benefit reporting Value based purchasing Loss or reduction of DSH payments

74 If you have any questions, please contact Kurt Mosley at: Follow Us:

75 FOR FURTHER INFORMATION AND DISCUSSION A Raised Hand Blog by Kurt Mosley ask-experts-blog.aspx Follow on

76 AASA PHYSICIAN RECRUITING AND COMPENSATION TRENDS

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