Tony Stajduhar, President of Jackson Physician Search, joined Craig Hunter, Senior VP at Coker Group last week to lead an MGMA webinar titled, “Interpreting Compensation Data for Physician Recruitment Success.” The main objective was to help healthcare administrators understand and utilize the various compensation data sources available to build a competitive offer that would improve physician recruitment success.
Compensation Data Sources
Physician compensation data can be derived from a variety of sources, with some being more accurate and reliable than others. Overwhelmingly, compensation data found through MGMA is considered the “gold standard” as a data source. Over 80% of participants responded to the webinar poll question that MGMA was being used as a benchmark for compensation data. Several also responded that they utilize a blend of compensation data gathered through MGMA, AMGA, and other data sources to arrive at competitive offers.
“There is a wide variance in reported compensation levels for physicians by specialty,” Stajduhar warned. “It is critical that healthcare administrators utilize the most accurate compensation, like the MGMA data, to create their fair market offers.”
Hunter expounded upon that point by talking about how important it is to understand Total Cash Compensation or TCC. When developing a compensation plan, all aspects of compensation must be taken into account and are already included in MGMA’s TCC benchmark data. The organization must also realize that there will most likely need to be a FMV (fair market value) opinion completed on the physician’s compensation to make sure it is within regulatory guidelines.
Considering the Market
Clearly, location can play a role in how interested physicians might be to relocate to a particular area. Cost-of-living, crime rates, schools, and education systems all contribute to the desirability of a region. When putting together a compensation package, a location’s cost-of-living has to be a consideration. For example, In San Diego, California, the cost-of-living is 40% less expensive than San Francisco. In dollars, a physician in San Diego earning $179,000 annually needs to make $250,000 to support that same lifestyle in San Francisco. As with the compensation data sources, there are tools available for administrators to utilize to ensure that they are considering cost-of-living when developing their compensation plans. NerdWallet.com provides a simple user interface to compare cost-of-living between two cities. Other sites, like Realtor.com, provide more detailed breakdowns of how much it costs to live, buy groceries, utilities, and more between two different cities.
Stajduhar advises that if an administrator is looking at compensation for a specific metro area or location, it is wise to cross-reference salary data found at Doximity.com. He cautioned that the data found at Doximity is self-reported and may or may not include benefits, but it can be useful in supporting an offer in specific localities.
“When creating compensation plans, utilizing as much relevant, detailed information as is available, will typically help you be within Fair Market Value guidelines for that physician.”
~Craig Hunter, Senior VP Coker Group
Total Compensation Packages
In considering the components of a total compensation package, utilizing the concept of Fair Market Value (FMV) should not be overlooked. Whether a healthcare organization has the resources to evaluate the plan for each physician specialty it employs, or it utilizes the support of industry experts, understanding the elements that comprise an attractive compensation package is vital to successful recruitment.
Additionally, as competition for physician services continues to increase and turnover results in lost revenue, crafting the salary portion of the offer is only the first part of the equation. The total compensation being offered should support both the recruitment and long-term retention of the physician. Healthcare administrators must learn what motivates their candidates. These benefits may include:
- Student loan forgiveness
- Optimal work/life balance
- Housing allowance based on the location
- Sign-on bonus
- Time for sabbaticals or research opportunities
Other types of exclusive perks that can help attract candidates and lead your retention efforts are:
- Personal financial advisors
- Low-interest loans
- Deferred compensation
- Family tuition or family education grants
By knowing what is most important to your ideal candidates, you put yourself in the best position to build an attractive offer.
Physicians on the Move
Even with the pandemic, physicians are seeking new opportunities and preparing to make a move. This is especially true during the summer months, and this year may even be busier than in the past because of the travel restrictions of late winter/early spring. From a numbers perspective, more than 50,000 physicians will accept new positions in 2020. Factoring in recruitment costs and the loss of revenue incurred with each physician vacancy means it is critical to ensure your recruitment and retention efforts are functioning at a high-level. Healthcare organizations are faced with six to nine-month time frames to recruit and hire most specialties. In addition to the +/- $250k sign-on bonus, relocation costs, and other expenditures.
“Each year, between 6- and 7% of all physicians move across the country.”
~Tony Stajduhar, President Jackson Physician Search
Recruitment Takeaways, Post Pandemic
As the nation continues to battle the COVID-19 pandemic, both Stajduhar and Hunter caution healthcare administrators to keep focused on candidate acquisition and adjusting their recruitment efforts to the current landscape. For example, one thing the pandemic brought to the forefront was how video conferencing could successfully be used to screen and interview candidates.
Not that technology will permanently replace in-person interviews and site visits, but these tools can be used to reduce costs and should be developed and used now. In fact, some organizations are using virtual interviews so effectively that candidates are accepting offers based on these interactions alone. Here’s how this Alabama facility recruited an ENT.
Stajduhar also advises healthcare executives to continue evolving and improving your internal processes to ensure that candidates are seeing and experiencing your organization in the best light. Workplace culture and fit continue to play an essential role in attracting the best physician candidates, and administrators need to ensure that organizational culture and values are front and center throughout the recruitment process.
If you need help with recruiting physicians, don’t hesitate to connect with one of our search consultants. They’ll be happy to answer any questions you might have about physician compensation packages, recruitment best practices, and retention tips.