4 Ways to Meet Rising Physician Compensation Expectations

September 14, 2022

In a recent MGMA STAT poll, 90% of administrators reported their group’s costs were increasing faster than revenue–with staff and labor the most frequently cited area of rising costs. This certainly follows the basics of supply and demand. The provider shortage, coupled with recent increases in turnover and retirements, mean demand far outweighs supply. As a result, one might assume that healthcare providers are commanding bigger salaries, but is this what’s driving up staffing costs? Let’s investigate the assumption and then explore four ways organizations can meet rising physician compensation expectations.

Is Physician Compensation Rising Faster Than Projected?

Reports of record inflation combined with the aforementioned supply and demand imbalance might cause one to assume physicians are commanding much higher compensation. However, at this point, data does not confirm this assumption, and while the early 2022 report from Medscape suggests a bigger jump, it merely balances out the stagnation seen since 2020.

Regional VP of Recruiting Helen Falkner reports she has not seen significant increases in physician salaries in the Western region, where she is based, though she has noted some changes.

“While physician salaries continue to increase year over year, there has not been a significant increase in the last year,” she says. “However, we are seeing bigger recruitment bonuses in the form of loan repayments, signing bonuses, or even housing assistance.”

So, while physician salaries may not be increasing significantly, physicians may have increased expectations regarding initial bonus opportunities. This is consistent with physician compensation projections for 2022.

How to Keep Up with Rising Physician Compensation Expectations

Healthcare organizations may not have to offer higher ongoing salaries, but if they hope to differentiate their opportunities and win the battle for talent, they will have to find room in the budget for initial bonuses or other incentives. Of course, if revenue does not also increase, this can prove to be difficult. How can organizations keep up when the additional money simply isn’t there? Here are 4 things to consider as you craft an offer:

1. Find Ways to Offer Flexibility

One notable impact of COVID-19 on the physician job market was an increased number of physicians seeking jobs that could offer a healthier work-life balance. The pandemic caused professionals in every industry to reevaluate how they were spending their time, and this was especially true for healthcare providers. Whether they were fighting COVID from emergency rooms, urgent cares, or ICUs or struggling to meet productivity goals due to closures and hesitant patients, many physicians came out of that first year of the pandemic ready for a change. In many cases, the change they sought was a shorter work week, a more flexible schedule, or fewer hours on call.

In this way, an offer that gives physicians the flexibility to create their own schedules may be worth more than a competing offer with a higher salary or signing bonus. Consider a 4-day work week, a 7-on/7-off schedule, an option to practice telehealth or otherwise work from home once or twice a week. The value of this flexibility will vary depending on the candidate, but for many, flexibility is the most attractive thing an employer can offer.

2. Consider the Value of Time

The old saying, “Time is money,” rings especially true with today’s physician workforce–and not just for those in a productivity-based compensation model. The value of time away from patients has increased for physicians who prioritize work-life balance, a group that accounts for more of the physician workforce than ever.

Certainly, a flexible schedule is a critical part of giving physicians more time, but employers can also provide administrative support such as a dedicated medical scribe or cutting-edge technology that will put time back in a physician’s day. A generous PTO package and paid sabbaticals can also go a long way to win over physicians; therefore, an employer that not only offers but encourages physicians to take time off work is especially attractive.

3. Reevaluate Temporary Staffing Spend

The aforementioned MGMA STAT poll found medical groups are seeing costs increase faster than revenue, with staffing and labor costs making up the bulk of the additional spend. This is due, at least in part, to an increased usage of temporary labor, which of course, costs more than permanent staff.

Helen Falkner recently saw this situation with a client. They urgently needed a full-time GI physician, a notably difficult specialty to recruit, and yet, the administrator was reluctant to increase the recruitment incentive package.

“I pointed out how much more they were spending on locums each month compared to what they would pay a permanent hire,” Helen explains. She knew an attractive signing bonus would likely shorten the length of the vacancy, thereby reducing the length of time they needed a locum. “I knew the bonus would pay for itself by eliminating the need to keep paying locums.”

Helen’s theory was right. Shortly after advertising the signing bonus, they had several candidates to choose from.

4. Individualize the Offer

Perhaps the most important consideration is to remember that each physician will prioritize different things, so make an offer that meets their specific needs. Once you have identified the best candidate, make sure you have listened carefully to his or her needs so that you can personalize the offer based on what is most important to him or her. For example, if the candidate is especially concerned about finding a house in the tight real estate market, designate funds for housing assistance. If he or she has emphasized the importance of family time, make sure the offer stipulates flexible scheduling and ample time off. If the candidate has heavy student loan debt, incorporate a loan repayment bonus into the offer. If you have listened to your candidate and have a market-savvy physician recruiter on your side, you will be able to extend a competitive offer that will win over your preferred candidate.

If you are trying to fill a physician job opening, it’s imperative that you understand the changing expectations surrounding physician compensation and have a plan to meet them. The Jackson Physician Search Recruitment Consultants are well-versed in compensation trends and can help you market your job effectively and extend a competitive offer when the time is right. Contact us today.

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Physician Compensation 101: What Residency Didn’t Teach You

April 4, 2022

By Jackson Physician Search

Show me the money. While most physicians don’t go into medicine solely for the high compensation, the six-figure income doesn’t exactly hurt. That said, physician compensation can range significantly depending on a number of factors. A physician’s specialty obviously impacts income, as does geographical location, but what many residents don’t know is how the different types of physician compensation models can also influence income.

Residents spend years learning their profession, but when it comes to getting paid, many have no idea what to expect. Sure, they may have seen average salaries referenced online or heard their attendings talk about what they earn, but as for what part of the compensation is guaranteed versus what is based on production or a percentage of profits–these details aren’t typically shared.

The complexities of physician compensation models could be covered by a semester-long class in medical school. Instead, it is often left to physician recruiters to explain the various nuances of how a physician gets paid–perhaps while presenting a resident with their first offer of employment!

So, in an effort to introduce the concepts earlier in the physician job search process, we present to you this primer on the two primary physician compensation models.

Hospital Employed Physician Compensation Model

According to a 2021 report from consulting firm Avalere Health, 69% of working physicians are employed by hospitals or other corporate entities, a figure accelerating significantly as a result of the COVID-19 pandemic. These physicians, when first hired by a large healthcare organization or hospital group, typically receive a guaranteed base salary for a set time period (one or two years) and then, presumably after the physician has established enough patients to be productive, compensation shifts to a productivity-based model.

Productivity is measured using wRVUs (work Relative Value Units) which are accrued for every exam or procedure a physician performs. The Centers for Medicare and Medicaid Services assign an RVU for each Current Procedural Terminology (CPT) code. The more complex the procedure, the greater the corresponding wRVU.

Accrued wRVUs are multiplied by an established dollar amount to calculate how much a physician earns. Some compensation plans offer a sliding scale to incent physicians to accrue more RVUs, that is, to be more productive. For example, the first 4,000 wRVUs are paid at a conversion factor of $40 per RVU, and then, the next 4,001-8,000 wRVUs are paid at $42 per wRVU. The amount employers will pay per wRVU varies, however, Medicare sets the amount they will reimburse per total RVU (total RVU takes into consideration an organization’s expenses and insurance), which is typically lower than what is billed to private insurance. For 2022, the Medicare rate per total RVU is $33.59.

Are you starting to see why a course in med school might be necessary to fully understand physician compensation models? In lieu of that, you can find further details in this Definitive Guide to Physician RVU Compensation from the advisory group Physicians Thrive.

As most physicians are employed by large health systems or hospital groups, it is worth digging into the nuances of wRVU compensation models, but at a high level, here is what you need to know.

Pros

The salary guarantee offers stability for new physicians and alleviates the pressure to ramp up in an unreasonable amount of time.
Productivity-based compensation gives physicians a sense of control over their income. The harder they work, the more income they will receive.
RVU compensation is typically not impacted by how much or how little the organization is able to collect from patients or their insurance companies. The payer mix also does not impact the physician’s income.

Cons

wRVUs do not account for time spent on administrative work, meetings, mentoring other physicians, and other tasks without a CPT code.
RVU-based compensation can create a culture of competition that prevents physicians from collaborating and supporting each other.
Productivity-based physician compensation puts a physician’s focus on the quantity of procedures rather than the quality of care. Some reports suggest this type of compensation is at odds with the movement toward Value Based Care.

Questions to Ask

Is the salary guarantee a minimum base or is it also a cap? That is to say, if a physician exceeds wRVU expectations during the guarantee period, can they receive more than the base salary?

How many wRVUs do most physicians in this practice produce? How does the productivity of physicians here compare to national norms?

Is there a cap on RVU bonuses?

Private Practice Physician Compensation Model

“While the percentage of physicians in private practice is waning, it is still an attractive option for many residents, especially those with an interest in business or those who simply want more autonomy in their work,” says Director of Recruiting Katie Moeller. Like hospital-employed physicians, physicians hired by a private practice may also receive a salary guarantee, but the expectation is that the physician will eventually become a partner whose income will be largely tied to the performance of the overall practice. For this reason, physicians want to be sure they are joining a practice that is financially viable.

Private practices, like any business, calculate profitability by deducting expenses from revenue. Profits are then distributed among the partners, perhaps with some percentage paid as bonuses to non-partner physicians.

When interviewing for private practice physician jobs, physicians should look beyond the initial salary offered and focus on the specifics of the track to partnership and the details of how the practice is run, including its expenses. The efficiency of the practice has a direct impact on how much the partners earn, so it is important to ask questions.

Pros

Physicians in private practice have a clear view of the factors contributing to their income, that is, the revenue and expenses of the practice. Once a partner, the physician will have some role in influencing those factors in order to increase income.
Unlimited income potential. Employed physicians are limited to the hospital’s bonus structure, but as a practice owner, you have the ability to grow your business to the level you need to achieve the income you want.

Cons

Research shows that Medicare reimburses physician services billed by hospitals at a higher rate than those billed by independent practices. This is one of many reasons hospitals can afford to pay higher starting salaries.
Because Medicare reimburses at a lower rate than private insurers, the practice’s patient mix will impact its profits, and thus, partner income.
Practicing medicine is already a stressful job. Physician partners in private practice have the added stress of running a business.

Questions to Ask

As noted, physician compensation will be tied to how well the practice performs, so ask enough questions to gain a full understanding.

How busy is the practice? What is the patient mix?

How effective is the billing department in collecting payment?

What are the overhead costs? How are staff levels determined? What salaries are given to administrators?

What can I expect to earn as a partner? Are there any opportunities for ancillary income, such as investing in an outpatient surgery center, real estate, or imaging? Is there a “buy-in” cost associated with becoming a partner?

Do all physician owners hold equal shares in the business?

Is there an accelerated track to partnership?

Are the partners currently considering selling to a hospital or corporate entity?

Why You Should Do Further Research on Physician Compensation Models

As residents and fellows enter the physician job search, it is important to have an understanding of physician compensation models. You have invested considerably in training to become a physician, and now that your training is complete, you are more than ready to reap the rewards. However, it can be difficult to weigh employment offers if you don’t have a clear understanding of how physicians are compensated beyond those first years when a minimum is likely guaranteed.

A good physician recruiter has invaluable insight to share with you regarding physician compensation. Physician recruitment firms often have access to proprietary data about physician compensation, bonuses, production, benefits, and time off. They can help you interpret this data to better understand what you can expect depending on your specialty, location, and other circumstances. Physician recruiters can also share what trends they are seeing in the market that may not yet appear in the data.

A physician recruiter can provide a wealth of information to better set your expectations in the beginning and more effectively negotiate your physician contract as your search comes to a close. The more information you have, the more confident you will feel when ultimately making your decision.

If you are embarking on a physician job search, the team at Jackson Physician Search is eager to share our insight with you and ensure you are set up for success. Search physician jobs now or contact us today.

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Physician Compensation and Hiring Trends: What to Expect in 2022

January 12, 2022

By Jackson Physician Search

What a year…again. As healthcare professionals gear up to begin year three of a global pandemic, what can administrators expect in terms of demand for physician services and compensation for their unending efforts?

While no one can say exactly what 2022 will bring in terms of the pandemic, without a doubt, the need for healthcare providers will persist. Long before COVID, a looming physician shortage threatened access to care, and the pandemic only worsened the problem, increasing physician burnout and sending many marching toward early physician retirement. As a result, organizations around the country are ramping up physician recruitment efforts.

The basics of supply and demand suggest the members of a shrinking workforce can name their price. While there is some truth in this assumption, healthcare organizations simply can’t pay physicians more than they take in. Still, most employers are doing whatever possible to offer attractive compensation packages that will win the talent they so desperately need.

It doesn’t take a crystal ball to predict that healthcare hiring and compensation will continue to trend upward, but what else can administrators and physicians expect in the months ahead? We asked two Vice Presidents of Recruiting for Jackson Physician Search to tell us a little about what they are seeing and hearing from clients and candidates with respect to physician job openings and compensation. If you are actively recruiting physicians, you’ll want to take note of these physician hiring and compensation trends in 2022.

Increased Retirements and Turnover Causing Healthcare Organizations to Open More Searches

“We are seeing a record number of new organizations retaining us for recruitment support,” says Tara Osseck, Regional VP of Recruiting for Jackson Physician Search’s Midwest Division. “We also have longstanding clients opening up a higher volume of searches than in years past. Some are hiring with the expectation of growth, but also, of course, in response to provider attrition. We see a little bit of everything driving recruitment, so we are busier than ever.”

Osseck’s observation of increased business at Jackson Physician Search reflects the fact that healthcare organizations are hiring in record numbers. Back in March of 2021, an MGMA STAT poll reported 72% of medical practices were hiring physicians. Since then, an October of 2021 STAT poll found one in three medical practices saw a physician leave or retire early in 2021 due to burnout. These physicians must be replaced, and of course, any growth the organization expects must also be accounted for with additional hiring. Medical staff planning has never been more important – or more difficult. Organizations know they need to hire physicians, but the when and who can be overwhelming.

In a Tighter Market, Healthcare Organizations are Extending More Competitive Offers

The volume of physician job openings is increasing, and yet, the number of residents coming out of training remains similar to previous years. In order to win talent from this limited pool, organizations will be forced to make more competitive offers, especially as they increasingly feel the impact of the physician shortage.

“While compensation is dependent on specialty and location, we’re seeing some offers starting to outpace the industry benchmarks,” Osseck explains. ”It’s not always enough to be in line with the MGMA or Sullivan & Cotter data. Organizations often need to go beyond those figures in order to set their offers apart.”

Another MGMA STAT poll supports Osseck’s observation. In June of 2021, one in three practices reported adding or expanding bonuses as a means of attracting and retaining physicians. Inflation is also driving increases. In December of 2021, 50% of practices said they are budgeting more than usual for cost-of-living adjustments in 2022.

Regional challenges with the housing market are also impacting physician compensation. Helen Falkner, VP of Recruiting for the Western Division explains:

“As housing costs rise around the country – and housing availability becomes a challenge – some organizations are including a temporary housing stipend in the initial offer to ease the burden of relocation for new physicians. This is likely to become the standard – especially in areas with extreme housing challenges – until the housing market begins to reverse or at least stabilize.”

Increased Value of Work-life Balance

Increased salaries, bonuses, and cost-of-living adjustments are appreciated, but money isn’t the only thing physicians want. Following the 2020 spring shutdown, recruiters saw an increase in physicians prioritizing work-life balance and autonomy. In a JPS whitepaper covering the impact of COVID-19 on physician jobs, several VPs of Recruiting reported seeing physicians prioritizing quality of life, proximity to family, and better work-life balance. While money will always matter, this shift in priorities seems to be more than a passing trend.

Some organizations will be surprised to learn that the most competitive offer isn’t always the one with the biggest number. Benefits such as four-day workweeks, minimal or no call, or the ability to practice via telehealth are increasingly the deciding factors for physicians weighing offers. Organizations are getting creative with additional paid time off – offering scheduled sabbaticals or dedicated time for physicians to participate in medical missions, either local or abroad.

“In our efforts to find physicians, we have to constantly ask ourselves, ‘What is going to make a physician apply to this job over some other job? Why should they consider this location when they were dead set on something else?’” says Falkner. “Historically, the answer to that question is some sort of eye-catching compensation. So, we highlight the signing bonus or loan repayment in the job ad, but more and more, it’s also a shorter workweek or the opportunity to practice via telehealth that can make the difference.”

The job ad must catch attention, but when it comes time to craft an offer, both Falkner and Osseck discussed the importance of customizing it to meet the specific needs of the candidate. The physician interview process gives candidates the chance to be clear about their priorities. If an organization is listening, they will know what to offer to win the physician’s acceptance.

Rebalancing the Ratio of Compensation to Productivity and Its Importance

While trends from the previous year often inform compensation plans for the future, the circumstances of 2020 were cause for exception. For example, the MGMA data shows physician compensation was relatively flat in 2020, but the dip in productivity – forced by the lockdown and patient hesitancy to seek treatment – caused the ratio of compensation to wRVUs to appear much higher than years passed. Thus, organizations won’t likely use the 2020 ratios as a benchmark for future expectations.

That said, the circumstances of 2020 caused providers once happy to accept a productivity-based compensation model to rethink the security of those plans. The pandemic put physicians in a situation where they had very little control over their own productivity, causing many to feel productivity and wRVUs should carry less weight in the compensation plan. As physicians have increasing power in the job market, we may see less emphasis on wRVUs in physician compensation models.

“Most compensation plans specify a minimum salary regardless of productivity,” Falkner explains. “But of course, the expectation to see a certain number of patients is still there. Then, of course, there are bonus opportunities beyond that. Productivity bonuses are still common, but we are increasingly seeing bonuses for quality, retention, or even access to care.”

Begin to See the Impact of the Shift to Value-based Care

Also contributing to the declining importance of wRVUs is the increased attention on value-based care. Studies show this model benefits the provider, the patient, and the health of the overall population, and yet, moving from fee-for-service reimbursement to value-based care has proven to be complicated.

While both Helen and Tara said they are seeing more clients incorporating a quality component to compensation packages, productivity continues to be the most significant factor, in part because it is easiest to measure, but also because it continues to be the basis of how organizations are reimbursed.

The unique circumstances of the moment may provide some momentum for value-based care, however. An article from consulting firm Deloitte explores how fee-for-service reimbursement and productivity-based compensation are intertwined. The author proposes that shifting the focus to quality of care rather than quantity could not only improve patient outcomes but also bring more meaning to physicians’ work and help reduce burnout.

Better Times Ahead?

The pandemic has pushed physicians to their limits, and an increased number of them are seeking to improve their circumstances with new employers. Healthcare organizations are working with physician recruitment firms to attract these candidates with the promise of better employment opportunities. Of course, what constitutes “better” is relative. Organizations must customize offers to win talent, and more importantly, they must deliver on promises made if they hope to retain their physicians.

“There’s a sense among some of the physicians I speak to that they are just another cog in the wheel and their entire worth is based on how many patients they can see in a day,” explains Osseck. “Organizations are experimenting with compensation models to counter this mentality. Ultimately, though, physician job satisfaction comes down to more than the compensation package. It will require a well thought out physician retention program – something most organizations are still lacking.”

While no one can say for sure what lies ahead in terms of physician hiring and compensation, it’s safe to say that physicians have the upper hand in job negotiations.

If you are actively recruiting and finding candidate acquisition more challenging than in the past, reach out to Jackson Physician Search today.

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Interpreting Compensation Data Sources for Physician Recruitment Success

July 8, 2020

By Jackson Physician Search

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.

You can reach Tony via email at tstajduhar@jacksonphysiciansearch.com and on LinkedIn here. You can reach Craig via email at chunter@cokergroup.com and on LinkedIn here.

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Going Beyond Compensation: 3 Tips to Win Top Physician Candidates

May 13, 2020

By Jackson Physician Search

The volume of physicians who are looking for their next opportunity is surging right now. And with many states moving well into the re-opening phase, these physicians are accepting new roles. To win them over, it’s important to offer a competitive and well-rounded compensation and benefits package. But money alone isn’t likely to provide you with a steady stream of high-quality candidates who fit the culture and will succeed in the role.

To recruit and retain your ideal candidates in today’s crowded recruitment environment, it’s time to get creative. Here are three tips for success.

Know your ideal candidate’s needs and tailor the compensation/benefits package to that physician.

If you’re looking at early careerists, offer a student loan repayment or signing bonus. If you’re looking for a mid- or late-stage careerist, offer a retention bonus as a reward for staying put over a certain period of service, or a broader insurance package that might include long-term care insurance.

Offer a flexible work schedule, especially if you know the candidate has child rearing or parental responsibilities. Knowing your candidate also means knowing if he or she has reservations about the business obligations of working in a practice versus a hospital.

Be prepared to proudly show your investment in software and support staff to ease the burden of practice management. Consider the benefits of recruiting a “clinical scribe” from within the local community to enter EMR data, giving physicians more time to focus on their patients. Show your dedication to the value-based practice model and your commitment to preventing burnout on staff.

You might also impress candidates by being on the cutting-edge of the revival of the physicians’ lounge as a place for doctors to come together, gain a respite from the action of work and share ideas. Out of fashion for a time, the physicians’ lounge is making a comeback as a powerful deterrent against burnout, as described in a 2019 Canadian Medical Association Journal (CMAJ) article.

Solidify your recruitment process and marketing plan to attract your ideal candidate.

The new generation of physicians are savvy – and that goes beyond their preference for communicating via text, email, and social media. Many of them tell us that most mass-produced marketing materials go in the trash without a second look.

They know a canned sales pitch when they see or hear one, and they resent the intrusion on their personal and professional lives. What they appreciate most is personalized communication tailored specifically to them—illustrating an intricate understanding of their skills and background.

That doesn’t mean you should throw out social media and other digital forms of recruitment. Quite the opposite, in fact – physicians prefer to receive job opportunities via email. Also, check out a candidate’s Facebook and LinkedIn pages to get to know him or her early in the recruiting process. Some recruits even have their own blogs that provide keen insight into their interests, work ethic, and career goals. If you’ve developed a successful candidate persona—and you should have one—it’s a good way to see which candidates will be the best fit.

In addition, your recruiting firm can help you narrow your choices to those candidates who are native to your state, who grew up or went to school there, so you can emphasize that connection when you communicate with them.

As an executive partner with the Medical Group Management Association (MGMA), we share best practices with the organization on the unique challenges of recruiting specifically to medical practices. Writes David N. Gans of MGMA’s industry affairs team, ideal candidates might be fully capable of starting their own private practice. Why would they want to sign up with an existing one? One reason is the ability to see nearly a full patient load from the start without taking the time to build their own patient panel. “That is a boon that sometimes you may not think about,” Gans says.

It’s a message well worth remembering in your communications with the candidates you want.

Ensure your interview process and candidate site visit is candidate- and family-focused.

Include key stakeholders, a tour of the community when travel is more practical again and be prepared to offer a sample contract if the candidate is your ideal fit. Remember that physicians and advanced practice providers are people, not numbers. They have families, friends, hobbies and interests that are important to them. Their individual needs, motivations, values and work styles significantly influence how and where they will choose to practice medicine. The more you can learn and adapt to these factors, the greater the opportunity to hire physicians who will fit, succeed and stay.

Invite key stakeholders to coffee or dinner to share their perspective on living and working in your area—what the schools are like, what elder care options are available if the candidate has aging parents, favorite recreational, social and cultural activities. Especially if your practice is in a rural community, it’s much easier for a candidate to imagine a transition to country life if he or she hears firsthand the stories of those who have already made it.

Contact us if you’d like additional insight into your own recruitment strategy as well as recommendations on ways to meet demand and attract the right physicians to your healthcare organization.

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RVUs and the Future of Physician Compensation Models

June 7, 2018

By Jackson Physician Search

Recent surveys are showing a growing shift toward value-based incentives as a component of discretionary compensation, but production in the form of work RVUs are still the most prevalent salary factor. To review, Relative Value Units (RVUs) are based on a scale originally designed to determine reimbursements from Medicare and/or Medicaid. RVUs represent a calculation of the effort expended by a physician when treating patients as a reflection of the time, skill, training required, and intensity of the service being performed. Using RVUs as a measure of productivity has been widely accepted because the scale reflects the reality that patient interactions are not equal. For example, a physician treating complex or high acuity patients will earn more RVUs than one who treats ten low acuity patients in a day. For up to date RVU values, you can download the 2018 Physician Fee Schedule from the Centers for Medicare and Medicaid Services.

Primary Care Physicians are in demand throughout most of the United States, even though the recent Medical Group Management Association (MGMA) Physician Compensation Report results are not reflective of a high-demand market. The MGMA report along with the American Medical Group Association (AMGA) Compensation Survey show that physicians are receiving annual increases in the range of 1% to 4% depending on the specialty. These modest increases are expected to continue in spite of the projected physician shortfall of between 42,600 and 121,300, as reported by the Association of American Medical Colleges.

According to the MGMA survey, the annual median reported RVUs was 4,928 in family medicine, 4,698 in internal medicine, and 4,902 in pediatrics. Both the MGMA compensation survey and AMGA survey reported flat productivity in family and internal medicine, although pediatric RVU reports differed. The AMGA survey results show a decline in median pediatric RVUs while the MGMA survey indicated a measurable increase in pediatric productivity.

The latest challenge for healthcare industry administrators has been adjusting physician compensation to model the shift toward value-based measurements. In 2009, approximately 41% of medical groups related that at least some of their physician compensation had a value-based component as opposed to 60% in 2016. Overall, value-based pay accounted for less than 7% of a physician’s total compensation.

As is often the case, Medicare/Medicaid reimbursements are driving much of the healthcare industry changes. For example, look no further than the 2016 passage of the Medicare Access and CHIP Reauthorization Act (MACRA) which builds upon many of the payment and delivery reforms that originated with the passage of the Affordable Care Act. One of the stated goals of MACRA legislation is that 85% of all Medicare FFS payments will be tied to quality by the end of this year.

It may not be too radical to envision future physician compensation models that do not contain an RVU/production component. More likely, as health care reform measures continue to push greater access, drive value over volume, and control reimbursement levels, RVUs may become largely irrelevant.

Are you having difficulty with physician compensation? Our team at Jackson Physician Search can help. Contact us today to learn more about our team of industry experts and what we can do for you.

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