Recommended ratio

Category                                          Specialty                                                         Physician:Population

Primary Care                                  Family Practice                                                1:2,500

Internal Medicine                                           1:7,800

OBGYN                                                                 1:11,000

Pediatrics                                                             1:13,750

       Medical                                            Allergy                                                                    1:25,000

Specialties                                             Cardiology                                                             1:100,000

Dermatology                                                        1:50,000

Gastroenterology                                                1:50,000

Neurology                                                              1:75,000

Psychiatry                                                             1:10,000

Pulmonary Diseases                                           1:100,000

Hematology/Oncology                                     1:40,000

Surgical  Specialties                  General Surgery                                                    1:10,000

Neurosurgery                                                         1:100,000

Ophthalmology                                                       1:20,000

Orthopedic Surgery                                               1:30,000

Otolaryngology                                                       1:50,000

Plastic                                                                          1:50,000

Thoracic                                                                      1:100,000

Urology                                                                      1:30,000

SOURCE: Dept. of HHS; Review of Manpower Population Requirement

Standards, DHFW Publication No. 77-22

Forethought, preparation, and the ability to listen are essential to success. Regrettably, by the time most physicians realize that the terms of their Agreement are less than propitious it is usually too late. In fact, most disputes between physicians and employers resulting in termination aren’t related to medical competence. To the contrary, more common than not, physicians claim that their employers failed to inform them of, or misrepresented, working conditions, patient workload, call responsibilities, partnership potential, or the prospects for increased compensation. To avoid these unnecessary pitfalls this article will address key factors to consider when negotiating a Physician Employment Agreement.

Itemize Your Priorities

First and foremost, it is important to know the difference between a “need” and a “want.” All too often, physicians become blindsided in the negotiation process for lack of preparation and the failure to rank priorities effectively. Keep in mind that priorities change over time. What you want today may not be what you need tomorrow. For instance, early-career physicians place a great emphasis on guaranteed compensation whereas, mid-career physicians focus on productivity-based compensation. Finally, late-career physicians prioritize flexibility, limited call responsibilities and a work/life balance.

According to a survey conducted by the American Medical Group Association (AMGA) and the physician recruiting firm, Cejka Search, the top three recruitment strategies medical groups use to attract new physicians are Market-based Compensation (65%), Income Guarantee (61%), and Signing Bonuses (42%). In comparison, physician-respondents prioritize Market-based Compensation (70%), Productivity Bonuses (60%), and a Flexible Schedule (34%).[1]

Since the goal of all negotiations is to reach an Agreement that is mutually satisfactory, it is crucial to develop a strategy for getting what you “need” before addressing what you “want.” By ranking priorities in the order of importance you’ll develop a blueprint for success that will serve as a visual reminder of what’s important. Failure to prioritize not only weakens your position at the bargaining table it also delays the negotiation process, wasting valuable time and money.

Know Your Worth

Although there are many compensation models, some are more complex than others. Regardless of the model used, it is imperative to know your worth before negotiating a Physician Employment Agreement. Since regional market factors and surveys, such as Medical Group Management Association (MGMA), American Medical Group Association (AMGA), and American Medical Association (AMA), dictate physician compensation, most physicians can expect their compensation to reflect what other physicians in the region are earning with comparable skill and experience.

When evaluating an offer for employment, it is important to consider each dimension of the compensation package and its value to you. Packages that contain a bonus or incentive component should be realistic and attainable given the doctor-to-patient ratio of the practice. Most groups acknowledge that it takes time for a new physician to grow his/her share of the practice; accordingly, first and second year incentive components require only modest performance. Despite the obvious grace period, new physicians should be aware of what is expected long-term and how future earnings will be calculated. Ask the employer if future earnings will be based on productivity or group collections? If based on group collections, every effort should be made to find out what percentage of billing the group typically collects and the reimbursement rate it receives from third-party payers before committing long-term.

Look Inside the Box

Having an adequate understanding of the practice’s long-term fiscal obligations can mean the difference between financial ruin and prosperity. It is incumbent upon a new physician to take a careful look at the inner-workings of the practice prior to joining the same. Especially when dealing with smaller practices, it is important to ask whether senior members of the group plan to retire in the near future. Retirement by one or more members can potentially expose new physicians to a costly buy-out when they least expect it. Other factors to consider include the debt-to-equity ratio of the practice and whether additional capital is needed to fund overhead expenses.

In addition to assessing the practice’s fiscal health, a new physician would be wise to familiarize himself/herself with the policies and procedures of the group before accepting an offer. When terms in the Agreement reference documents, such as Bylaws, SOP manuals, Partnership Agreements, and Health or Retirement Plans, make certain to request dated copies of the same and review them prior to signing the Agreement. Many physicians are hesitant to request copies of pertinent documents because they fear being perceived as difficult or demanding; however, nothing could be farther from the truth. To the contrary, failure to familiarize yourself with these documents could jeopardize your long-term relationship with the practice. Always remember, that an ounce of prevention is worth a pound of cure.

Ask the Tough Questions

Health care is an ever changing and consolidating industry. Both internal and external factors influence how long a physician will stay with a practice. It is not uncommon for newly-hired physicians to stick with a job only a short time. Historically, 50 percent of physicians leave a practice within three years and 60 percent exit by Year Five.[2] To avoid becoming a statistic, make sure the practice is a good fit before signing on the dotted line. Ask the employer where they see the practice five years from now and where you’ll fit into their long-term plans. By the close of negotiations you should be completely confident that the employer’s goals are realistic, attainable, and consistent with your time frame and professional agenda.

Don’t Get Lost in the Translation

Employment Agreements are designed to memorialize the intentions of the parties and protect them when things don’t go as planned. All terms governing the employer/employee relationship should be explicit and in writing. Statements that seek to dismiss or diminish terms of the Agreement should be avoided at all cost. New physicians to a practice should be leery of any comments that are inconsistent with the Agreement. Comments, such as “Oh, our attorney always puts that in there” or “That doesn’t apply to you” should be taken with a grain of salt. Remember all language is relevant and is put there for a reason. If you do not understand one or more terms, ask! Don’t wait until it is too late. A good rule of thumb to remember is to have the Agreement reviewed by an attorney familiar with the applicable laws of the state where you intend to practice. In addition to the business of medicine, the attorney should also be familiar with employment law and contracts.

Hope for the Best, Plan for the Worst

Despite the best intentions, things don’t always go as planned. Negotiating with the worst-case scenario in mind will help you deal with the uncertainty of the future. Although there are a plethora of issues that arise after a physician leaves a practice, there are two provisions of the Agreement that cause considerable concern, insurance coverage and restrictive covenants.

Insurance Coverage: Let’s face it, as long as there’s health care there will be claims of malpractice. One of the most important provisions of the Agreement is insurance coverage. Though most employers offer coverage within statutory limits, it is prudent to confirm sufficient coverage in order to avoid being placed in a financially precarious position in the future.

Depending on the employer, coverage is offered on an “occurrence” or “claims-made” basis. Occurrence coverage is usually preferred by physicians because the purchase of extended reporting endorsement (“tail”) is not required at the end of the policy. Occurrence coverage applies to alleged acts of negligence that occur during the policy year. Even if you no longer possess the policy, you are still covered if the incident occurred while the policy was in effect.

In contrast, claims-made coverage is the most common type of coverage. It provides protection for claims that occur on or after the policy retroactive date and are reported to the carrier, in writing, during the policy year. Tail coverage is required for claims that occurred during the active period of the policy, but were reported after the policy terminated.

Keep in mind that tail coverage is very costly. Tail coverage typically costs between 150 to 200 percent of the price of a mature claims-made policy. Given the expense, it is prudent to negotiate full payment by the practice. Since many employers are hesitant to flip the bill, strategize by negotiating one or more of the following: (i) tail is to be paid, in full, by the party who terminates the employment relationship; (ii) tail is to be paid by the practice, in full, if termination is without cause (professional misconduct, loss of licensure, uninsurable for professional liability, or acts involving moral turpitude); (iii) tail is to be paid by the practice, in full, after three years of service; or (iv) the cost of tail is to be divided evenly between the parties. If all else fails, cover your tail! Start saving now or look into the purchase of prior-acts coverage, also known as “nose” coverage, once you leave the practice.

Restrictive Covenants: Non-competition and non-solicitation provisions of the Agreement place time and geographic restrictions on where a physician can practice and who he/she can solicit as patients upon separation from the practice. Restrictive covenants are premised on the fact that since the employer invested tremendous resources in recruitment and helped the physician build his/her practice, the employer should be protected from future competitive activity.

Although the intricacies of such covenants exceed the scope of this article, it is important to keep in mind that restrictive covenants are governed by the laws of the jurisdiction in which the practice is located. Historically, jurisdictions which recognize such covenants have held that the covenant be “reasonable” to protect the legitimate interests of the employer, impose no undue hardship on the employee, and do not harm public interests. As with all other provisions of the Agreement it is wise to have the covenants reviewed by counsel before consenting to the same.

Know When to Walk Away

Reluctance to negotiate terms of an Employment Agreement may be an early indication of a strenuous working relationship or an inability to embrace conflicting ideas, or encourage professional development in the workplace. Accordingly, a physician should never hesitate to question the terms of an Agreement or tenaciously negotiate terms that are integral to professional growth and personal satisfaction. If negotiations are not going well, or seem particularly adversarial, it may be a good time to reevaluate your options and pursue another path.

Check and Double Check

Once negotiations are complete and an Employment Agreement has been presented for consideration the final step is to go through the Agreement with a fine tooth comb. At a minimum, make certain that the following provisions are expressly stated in the Agreement and meet with the approval of counsel:
■Conditions of Employment (State Licensure, DEA, Credentialing and Hospital Privileges);
■Term (Length of Contract), Renewal or Future Negotiations;
■Termination (At Will v. For Cause, Notice Period, Payment and Post-Termination Obligations);
■Compensation Package (Base Salary, Percent of Collections, Bonuses, etc.);
■Business Expenses (CMEs, Professional Dues, Staff Fees, Journals, Stipends, etc.);
■Fringe Benefits (Health / Life Insurance, Retirement Plans, etc.);
■Malpractice Insurance (Occurrence or Claims Made and Tail Coverage);
■Paid Time Off (Vacation, Sick Leave, Maternity, Disability, etc.);
■Restrictive Covenants (Non-Competition, Non-Solicitation); and
■Co-Ownership (Partnership, Buy-Ins, Pay- Outs).

In closing, the strategy you implement to negotiate your Employment Agreement should reinforce your personal goals and professional agenda. As you go through the negotiation process stay focused on the fact that you’ve invested a great deal of time and money to get where you are today; so don’t drop the ball now. Remember, if you don’t look out for yourself, no one else will!

###

Lucia Francesca Bruno, JD, LLM, MBA, is Principal Shareholder of Physicians’ Legal Group, LLC (www.physicianslegalgroup.com). She can be reached at (215) 688-3909.

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[1] Tom Flatt, The Recession and the Three R’s of Healthcare: Reform, Recruitment, and Retention Medical Groups Are Adjusting to Meet Economic Challenges Reports Cejka Search and AMGA Survey (March 2010)

[2] Gail Garfinkel Weiss, Group Practice: How to keep the new guy. Modern Medicine (June 2010)

By Lucia Francesca Bruno, JD, LLM, MBA

http://www.physiciansnews.com/2011/11/07/the-art-of-negotiating-physician-employment-agreements/

By Kevin O’Mahony, Esq. of Allen, McCain & O’Mahony, P.C.*

Introduction

Licensing board complaints may be filed by patients, their family members, other healthcare providers, employees, or anyone who interacts with a physician. Increasing awareness of this fact, aided by consumer groups and state laws which require posting patient bills of rights in waiting rooms, has led to more medical board complaints being filed and sanctions imposed. Disciplinary action can include: a reprimand, restrictions on a physician’s practice, continuing medical education or monitoring requirements, probation, license suspension or revocation. Moreover, the adverse consequences of a board complaint do not necessarily end there.

Doctors generally are required by contract to report disciplinary actions to their professional liability carriers, managed care plans and patients’ health insurance plans. Federal law also requires that discipline be reported to the National Practitioner Data Bank, which hospitals must check before granting or renewing medical staff privileges. Thus, a cascade of negative effects may flow from a single board complaint. Depending on the alleged offense and the board’s conclusion, a physician’s reputation and livelihood may be destroyed. So the importance of properly responding to a licensing board complaint cannot be overstated. Nonetheless, many physicians make crucial mistakes after a board complaint has been filed, which needlessly expose them to additional professional risk.

Mistake #1 – Taking the Complaint Lightly or Going Into Denial-Mode
Upon receiving a licensing board complaint, physicians often dismiss the allegations (regardless of merit) as frivolous, groundless, or the fabrications of a delusional patient. Or, they go into “denial-mode,” pretending nothing has happened. A doctor may be outraged at being wrongly accused of unprofessional conduct. He may assume that once he explains what happened, the medical board will see the complaint as not worth the paper it’s written on. But even in situations where this is true, physicians are well-advised to take the complaint seriously.

Action Step – Treat any formal complaint as a serious matter, warranting immediate and thoughtful action. Immediately plan a thorough and respectful response.

Mistake #2 – Ignoring or Missing the Response Deadline
When a complaint is filed with a licensing board, the board generally sends a notice of the complaint to the physician. In that notice, there almost always is a deadline for the doctor to file a written, narrative response to the allegations, and a deadline to produce all of the patient’s records. Physicians are busy people. And gathering the relevant information, obtaining the necessary advice, and preparing an appropriate response are time-consuming tasks, most of which cannot be delegated. It is also human nature to put off dealing with unpleasant tasks. Consequently, the deadline for producing records and filing a response often creeps up on the physician, before she has done what is necessary to prepare a proper defense. However, failure to timely respond can at best harm the physician’s credibility, and at worst result in sanctions being imposed when they otherwise wouldn’t be.

Action Step – Diary the due date for your response immediately. Determine as soon as possible whether an extension of time to respond will be needed. If so, request an extension well before the deadline arrives. Promptly gather and obtain certified copies of all the patient’s records. See that they are furnished to the medical board on time, consistent with HIPAA’s privacy regulations and state privacy laws.

Mistake #3 – Failing to Promptly Consult With Counsel & Fully Disclosing All Important Facts It is important to find an attorney licensed to practice in your state, who is familiar with your state’s licensing board procedures. Because of pride, cost concerns, professional rivalry, or a belief they can handle the matter themselves, physicians frequently do not consult legal counsel. Or, they wait until significant damage has been done to their professional reputations before doing so. Seldom are the adages “penny-wise and pound-foolish,” and doing “too little, too late,” more apt. Knowing how to practice medicine, and even being a superior doctor, does not mean a physician is equipped to defend himself in a licensing board proceeding, where legal rules of procedure and evidence apply. Even attorneys abide by the maxim that “a lawyer who represents himself in a case has a fool for a client.” This is because even the best advocate can wear only so many hats or fill so many roles, without losing effectiveness. In all but the simplest of cases, it is far better to have someone else defend the physician and (if necessary) criticize the complainant, than have the doctor — who himself is the target of the complaint — be his only advocate. The damage that can be done to a physician’s reputation and livelihood by a professional complaint far outweighs any legitimate concerns he may have about retaining the services of an attorney experienced in this area of the law.

Action Step Pick up the phone. If you know an attorney in your community who has handled these types of cases successfully, call him or her immediately. If you do not know one, contact colleagues and physician organizations for referrals. Then promptly provide your counsel with all pertinent information and documents, and any known grounds for defending the allegations. Do not omit any important or potentially damaging information, because you hope it will not come out. Include the good, the bad, and any “ugly” facts which may be relevant, so your attorney is fully informed and not unpleasantly surprised by damaging facts when it is too late to minimize their impact. Consider asking your attorney to retain a consulting expert, so you can get an objective opinion after a full discussion of the matter protected by the attorney-client privilege or work product doctrine.

Mistake #4 – Failing to Notify Your Malpractice Insurer or Risk Manager
When a complaint is filed, most physicians are not anxious to broadcast that fact. Especially if the charges include serious or embarrassing allegations, a doctor may avoid notifying even those who may help him. This can be a big mistake for several reasons. First, under most malpractice insurance policies, physicians have a duty to notify the carrier of any claim or potential claim which might require coverage as soon as practicable. Second, unless the physician is a sole practitioner, she often is required by contract, bylaws or organization policy to notify a risk manager or someone within the organization of the claim, no matter how embarrassing or meritless the charge. Failure to provide timely notice of formal complaints to such parties can jeopardize insurance coverage, a physician’s employment or ownership interest in an organization, or career. Moreover, the malpractice carrier or entity with which the physician is affiliated may provide or pay for assistance, including experienced counsel to represent the physician before the board. Therefore, keeping a board complaint secret from these parties is not in the physician’s best interest, professionally or economically.

Action Step – Review your malpractice insurance policy. Determine whether you have a duty to notify the carrier, and whether there is coverage for board complaints. If so, notify your carrier of the complaint as soon as possible. Also notify appropriate risk management personnel in the facility where you practice, and provide pertinent documents. Request any legal and other assistance which may be available under the policy, contract or organization bylaws.

Mistake #5 – Contacting the Complaining Party & Trying to “Talk Them Out of It”
This almost never works. Worse, it can lead to damaging evidence being admitted against you. And it may be portrayed as your having tried to intimidate the complaining party. So don’t do it. You also should not assume upon receiving a letter announcing the initiation of an investigation, followed by a phone call from a seemingly friendly investigator, that you can simply explain the complaint away. Although some complaints can be resolved quickly without adverse action, you shouldn’t be lulled into a false sense of security by what may initially be a friendly or supportive approach by a board investigator. Often, the investigator’s attitude will change. And statements you make at the outset, without adequate reflection, can come back to haunt you. Also avoid having conversations with third parties, including potential witnesses, which may damage your defense, and which are not protected from disclosure by the attorney-client privilege or some other legally recognized privilege. In short, saying the wrong thing or something in the wrong way to anyone (except your attorney) can significantly inhibit your defense and lead to unfavorable consequences.

Action Step – Involve legal counsel in all substantive discussions about the case. If asked, politely decline discussing the matter with anyone without your attorney present. This will help ensure that your counsel is fully informed, and that your conversations are protected under the attorney-client privilege or work product doctrine.

Mistake #6 – Responding Angrily or Emotionally
Either because of righteous indignation or fear about the effects a complaint may have on his practice, a physician’s first reaction may be to respond angrily or emotionally. Physicians also may be inclined to blame or point fingers at other healthcare providers for less than optimal outcomes, or for getting them into “this mess” with the board.

Action Step – Before writing or speaking to the medical board, think, take several deep breaths, and think again. Bear in mind that board members are, like you, medical professionals. They know that many complaints are brought without merit, and that physicians can be falsely accused, no matter how competent or ethical they are. On the other hand, licensing boards are under increased scrutiny by the press and consumer groups, with boards often graded on the percentage of doctors they discipline. Their job is to police the medical profession and protect the public. Thus, while they should not be predisposed to find against you, board members are unlikely to be impressed by shrill or emotional protestations of persecution, or a physician who blames the patient or other providers for every problem. So resist any temptation in that direction. Omit extraneous information and personal attacks which are irrelevant to the stated charges. Take the high road, no matter how infuriating the allegations. If appropriate, indicate how the patient or complaining party might be mistaken (rather than mean-spirited or deranged), and demonstrate sympathy or understanding for how such a mistaken impression might be formed. Be factual, responsive and persuasive. Address the board’s concerns, express your willingness to cooperate, and reaffirm your intention to comply fully with all applicable laws and ethical rules. In short, show complete respect for the board and the important job it does.

Mistake #7 – Needlessly Admitting Fault
In medicine, as in everything else, things do not always go as they should. In some cases, a frank acknowledgment that a mistake was made, an apology or expression of remorse, and a promise to do better next time is the best response one can provide. In most cases, however, the issue of fault is not clear-cut. Rare is the case where a physician’s conduct cannot be explained, or at least cast in a better light than is done in a complaint or investigator’s report. Therefore, except in irrefutable cases, it is a mistake for a physician to simply admit fault, and hope the board will reward the doctor’s candor with a slap on the wrist or minor sanction. In general, unqualified admissions are likely to lead to more severe sanctions being imposed, greater exposure to malpractice liability, and fewer career options.

Action Step – Be candid and forthright with the board. Express concern for the patient’s problem, if appropriate. But do not needlessly fall on your sword or accept blame when your conduct is defensible, can be explained, or can be characterized in a less blameworthy fashion. Consistent with the truth, a physician and his counsel should carefully analyze all possible ways of defending or explaining the doctor’s conduct, before simply admitting fault. Even if an admission is the only credible option, the best possible terms should be sought before conceding.

Mistake #8 – Responding as if Speaking to Physicians Fully-Versed in Your Specialty
Although medical board members are usually physicians or healthcare professionals, they are not trained in every medical specialty. Therefore, an individual member or panel may know little about the particular medical specialty in which the physician who is the subject of the complaint practices. Consequently, the physician responding to a board complaint should not respond in so technical a manner, or with such specialized jargon, that only an expert in her particular field would understand the response. Conversely, the physician should not respond as if educating people with no medical training or background whatsoever, or in a condescending manner that insults the board.

Action Step – Strive to achieve a middle ground between these two extremes. Respectfully inform or educate board members about unique or peculiar aspects which may be involved in your particular practice or specialty, or the procedure at issue. This should be done without talking down to anyone. Especially in cases where medical records are voluminous, it also is a good idea to cite key portions of the records which support your defense, rather than expect the board to wade through the records and find what’s important. If the medical records don’t clearly and obviously support your position, consider retaining an expert witness to render an opinion. Also cite medical treatises, other treating or consulting physicians, and experts whose findings or opinions support the diagnosis, care or treatment at issue, to demonstrate that your position is supported by other authorities.

Mistake #9 – Failing to Respond to Every Charge in the Complaint
Often, a physician’s written response will address some, but not all, of the charges made in a patient’s complaint. While the response should be no longer than necessary, it is a mistake to ignore an allegation or assume the board will, on its own, deem a charge so lacking in merit that it does not warrant even a denial by the responding physician.

Action Step – A physician’s narrative response should address each and every allegation or charge made in the complaint. Otherwise, an inference that the allegation or charge is true may be drawn. On the other hand, a physician’s narrative response should say no more than is necessary to address each allegation and the board’s stated concerns.

Mistake #10 – Hiding, Altering or Destroying Records
This is perhaps the easiest way for a physician to lose his license. Under no circumstances should a healthcare provider ever hide, alter or destroy a medical record — even if he or she believes such an alteration will make the record more accurate.

Action Step – Don’t ever do it! Instead, promptly gather or obtain certified copies of all the requested records, and see that they are furnished to the medical board, consistent with HIPAA’s federal privacy rules and state privacy laws. To the extent there may be material errors or omissions in an original record, the record should be supplemented — but only in accordance with previously established record-keeping policies. The date and reason for any supplementation, amendment or addendum should be clearly noted, and the original record in its unamended form should also be produced. The physician and her counsel must be prepared to explain the reasons for any omission or error in a record, and any amendment, supplementation or addendum which might be added.

Conclusion

Physicians who avoid the mistakes above, and take the steps suggested, will be best able to ward off disciplinary action and other adverse consequences which may result from a licensing board complaint.

Additional Resources
■Defending Doctors in Disciplinary Proceedings, F. Zeder, Arizona Attorney, January 2004
■What to Do if You Receive a Licensing Board Complaint, J. Perrin, Ph.D., The North Carolina Psychologist, January/February 2003
■Defending a Licensing Board Complaint: Financial Devastation?, B. Welch, Ph. D., J.D., Insight, Edition I, 2002
■Licensure Discipline, S. Lindgard, J.D., Jacksonville Medicine, April 1997

* A slightly revised version of this article was published in the book, The Biggest Legal Mistakes Physicians Make – And How to Avoid Them, Edited by Steven Babitsky, Esq. and James J. Mangraviti, Jr., Esq., Copyright © 2005 by Seak, Inc. All rights reserved. Neither that book nor this article is intended to constitute legal advice or create any attorney-client relationship. This article provides general information only. An attorney or other appropriate source should be consulted regarding specific factual scenarios.

See More articles: http://www.amolawfirm.com/Georgia-biggest-mistakes/

IRVING, TX –
The recruitment demand for specialists such as radiologists and cardiologists has waned in favor of primary care physicians,  reports a physician recruitment review by national healthcare search and consulting firm, Merritt Hawkins, an AMN Healthcare company.

In 2010-2011, family practice and general internal medicine physicians were the two top most requested physician search assignments for the sixth year in a row, Merritt Hawkins reported.

Merritt Hawkins’ report is based on 2,667 permanent physician and advanced allied professional search assignments that it and AMN’s physician staffing companies conducted from April 2010 to March 2011.

Radiologists, cardiologists and anesthesiologists – formerly the top requested search assignments – have dropped to 17th, 18th and 19th place, respectively. Part of the decline for these specialists is attributed to reimbursement cuts and a reduction in elective procedures, the report noted.

Need is driving the demand for primary care physicians, said Travis Singleton, senior vice president of Merritt Hawkins. “In the drive to ‘have a seat at the table’ in tomorrow’s healthcare delivery system,” he said, “many groups have rushed to form patient-centered medical homes, ACOs, employment models, etcetera. This has bolstered the attention to primary care because primary care serves as the foundation for these emerging delivery systems.”

Demand is also strong because of the shortage of primary care physicians in the face of a potential addition of 32 million uninsured becoming insured under healthcare reform.

[See also: Physicianturnover rate on the rise.]

To entice physicians of all stripes, healthcare organizations continue to offer signing bonuses and relocation and continuing medical education allowances in recruitment packages. New to the recruitment offerings is a housing allowance.

Offering housing allowances is just one of the ways healthcare organizations have had to get creative to attract physicians, said Singleton. “Whether it is signing bonuses, housing bonuses, on-call pay, stipends, etcetera … groups will do what they have to in order to attract physicians,” he said.

Housing allowances are on offer (sic) because in this rough economy doctors are having trouble selling their homes. The housing allowance offer may be a temporary trend, said Singleton, that could go away if or when the housing market rebounds.

Merritt Hawkins’ review found that 74 percent of search assignments offered potential recruits a salary with production bonus. More than half of the production bonuses are based on volume.

While incentives are still volume-based, Singleton said he anticipates more production bonuses will move toward the quality metrics encouraged by healthcare reform, however, he is not sure if value-based compensation will become the national standard.

“Quality is hard to measure, and when it comes time to benefit from shared savings, it is hard to calibrate how to reward the family physicians versus the cardiologist versus the anesthesiologist, etcetera. So the jury is still out,” he said. “Quality may be the payment system of tomorrow, but it is not the system of today.”

Follow HFN associate editor Stephanie Bouchard on Twitter @SBouchardHFN.

Healthcare Finance News

Still, healthcare continues to be the countercyclical career success story of the great recession. From the start of the downturn in December 2007 until September 2010, the healthcare sector grew by 720,000 jobs, while all other industries lost nearly 8.5 million jobs, according to an analysis of Bureau of Labor Statistics data by the Altarum Institute’s Center for Studying Health Spending, a research and consulting organization.

And in the long term, healthcare is still expected to be a driver of broad economic expansion as well as a source for job growth. From 2008 to 2018, healthcare and social-assistance employment will expand by nearly 4 million jobs, to 19.8 million, according BLS projections.

The Economy Is Still a Drag on Healthcare Job Growth
Joblessness –– especially long-term unemployment –– is near its recent high, so consumers’ lack of insurance and general belt-tightening are holding down healthcare utilization.

“The economy is reducing the demand for nursing jobs,” says Brenda Morris, RN, senior director of baccalaureate programs at Arizona State University’s College of Nursing & Health Innovation. “Patients are delaying elective procedures, and nurses are postponing retirement.”

In a fiscal environment where many providers –– especially hospitals –– are in precarious condition, slack demand quickly trickles down to healthcare employment. As the Altarum report notes, “the rate of growth in healthcare employment fell considerably during the most recent recession, though it remained comfortably positive.”

Hiring Picks Up – Slightly
But there are signs that healthcare hiring trends will improve in 2011 –– at least a bit. “We’re seeing a very, very slight increase in openings in nursing and allied health,” says Dennis Yee, a recruitment consultant at Children’s Hospital Central California in Madera, California, and president of the National Association for Health Care Recruitment.

Entrants to healthcare fields, even those that have suffered serious labor shortages for years, will likely continue to find their options limited. “It’s taking our graduates longer to find a job,” Morris says. “They’re often not able to get their first or second choices, and it’s very difficult to get a first job in specialties like pediatrics, perinatal or ICU.” Many nursing graduates take a med/surg starter job by default, she says.

Still, 65 percent of new BSN grads had a job offer upon graduation in 2010; four to six months later, a total of 89 percent had secured offers, according to a survey by the American Association of Colleges of Nursing.

“The educational requirements for some jobs have been raised,” Yee says, with some physical therapy and rehabilitation jobs, for example, now requiring a doctorate. In nursing, “the advantage of a baccalaureate over an associate’s degree in nursing has gotten greater,” Morris says.

Despite Politics and Court Battles, Reform Likely Will Create Jobs
The 30 million Americans who are scheduled to gain insurance coverage under healthcare reform will double their use of healthcare, which should drive hiring, says Charles Roehrig, director of the Altarum center.

But clouds of doubt continue to swirl around the Patient Protection and Affordable Care Act. “Hospitals don’t know what’s going to happen with healthcare reform –– what will stick, what Congress will do,” says Peter Ferguson, senior vice president of health and life sciences at Yoh, a Philadelphia-based recruitment and staffing firm. Ongoing legal challenges to healthcare reform virtually guarantee the uncertainty will continue for years.

Yet “healthcare executives are behaving as if they expect reform to happen,” Roehrig says. Hospitals, for example, are beginning to buy up primary-care groups.

“Under healthcare reform there will be more opportunities for professionals who supply more physician services without increasing the number of physicians –– nurse practitioners, physician assistants and medical assistants,” Roehrig says. However, state and federal budget deficits will constrain hiring somewhat for the foreseeable future largely due to cuts in Medicare and Medicaid funding. “And with incentives to keep hospital costs down, the rate of growth in hospital employment is likely to stay low,” he adds.

For his part, Yee says he’s taking a more short-term view. “We’re more focused on our immediate needs that we can [grasp], versus healthcare reform over the next few years,” he says.

Still, many healthcare occupations are projected to expand mightily over the coming decade. Among the 30 jobs projected to grow the fastest from 2008 to 2018, seven are in healthcare: RNs (582,000 more jobs); home-health aides (461,000); personal and home-care aides (376,000); nursing aides, orderlies and attendants (276,000); medical assistants (164,000); licensed practical nurses/licensed vocational nurses (156,000); and physicians and surgeons (144,000).

By John Rossheim, Monster.com, July 2011

The troublesome U.S. economy has left few industries untouched by
hardship—especially healthcare. A growing number of physicians, who once favored
private and small practices, have now elected to join stable health systems
rather than carry the weight of running their own businesses.

The two excerpts below cite several studies that examine this trend and
forecast its progression throughout 2013, posing a transformation of the entire
landscape of the medical market as well as the role of physicians.

Excerpt from “Small Practices: Adapting to Survive”

According to data released June 3, 2010, by the Medical Group Management
Assn., 65% of established physicians hired, and 49% of those finishing
residencies, landed positions in hospital-based practices in 2009. The most
recent American Medical Association figures show that 25% of physicians were in
solo practice from 2007-08. An additional 21.4% were in groups of two to four.
Previous AMA data are not directly comparable, because different survey methods
were used. But they do indicate that the number of physicians in small practices
is declining. Slightly more than 37% of self-employed physicians were in solo
practice in 2001, and nearly 26% worked in groups of two to four.

Industry analysts agree that solo and small practices are becoming less
common, and more physicians are becoming employed by hospitals and large groups.
This is an AMA analysis of physician working environments by type of practice in
2007-08.

Source: “The Practice Arrangements of Patient Care Physicians 2007-2008: An
Analysis by Age Cohort and Gender,” American Medical Association, 2009

By Victoria Stagg Elliott, from amednew.com, June 27, 2011

Excerpt from “Physicians Leaving Practices for Health System Employment”

By 2013, less than a third of physicians will be in private practice,
electing instead for employment with larger health systems, according to a new
report released June 13 by management consulting company Accenture Health. The
rate of independent physicians employed by health systems will grow by an annual
rate of 5 percent over three years, according to the report.

Burdened by administrative responsibilities of their private practices,
physicians are increasingly attracted to the resources that health systems
offer, as well as manageable work weeks and job stability, notes the report.

The employment trend is spreading nationwide. For example, Texas last month
lifted a statewide ban that now permits rural hospitals to employ physicians.
For supporters of the legislation, SB 894 will attract physicians to underserved
communities.

“We see an increasing number of physicians leaving private practice to join
hospital systems, which will force all stakeholders to revise and refine their
business models, product offerings and service strategies,” said Accenture
Health Senior Executive Kristin Ficery.

The trend of physician employment will require that hospitals adjust their
recruitment and retention methods, especially in growing service lines, such as
cardiovascular care, orthopedics, cancer care, and radiology, according to the
consulting firm. In addition, Accenture anticipates that patients will
increasingly shift their care from private practices to large health system
settings.

By Karen M. Cheung, FierceHealthcare, June 13, 2011