Transcript The long and winding road - HFMA Central Ohio Chapter

From Defining Physician Need to
Employment Contracts that Work
Physician Recruitment
is Changing…
DAVID ANDRICK
DIRECTOR OF PHYSICIAN
RECRUITMENT
A Real Issue - Shortage
Association of American
Medical Colleges news
release Oct 2009
First-year enrollment in the
nation's medical schools
rose this year by 2 percent
over 2008 to nearly 18,400
students.
Even with increasing enrollments we may fall short of the need
• Retirements
• Other career choices
• Population changes
The Traditional Approach
Medical Staff Planning typically includes a market
based Supply and Demand analysis:
 Physician locations
 Service line needs
 Physician group dynamics
 Market changes, migration and
(Accessibility)
 Activity levels by FTE
Physician
 Hospital coverage needs
infiltration
 Qualitative data from interviews
 Comparison to nationally
accepted ratios
 Community demographics
 Physician demographics
Community Need
 Changes to IRS 990 requiring greater reporting of
community benefit
 The Reform Bill calls for Hospitals to evaluate
Community Need for services
• Need to make sure they tie together-consistent message
 Leads to a more sophisticated process – including:
 Community age / sex
 Epidemiology – major indices
demographics – implications  Impacts of innovative delivery
 Poverty levels
 Insurance coverage
 Available FQHC services
models (Accountable Care/PCMH)
 Service lines and locally available
care
Upgraded Need Analysis
 How many IP/OP admits (on avg. and detail) are
required by specialty service area to break even?
 How many referring physicians are required to
generate these referrals from the primary service area?
 Unnecessary out-migration of cases
• Changes to medical practice?
 What types of physician can influence referrals to
specific specialties?
 Who has the data:
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Service line directors/CFO
Hospital DRG/APC data
Patient migration by source with DRG/APC
MGMA physician production data
Changes to Medical Practice
 Practice models
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Employed/Independent
Multi/Single-specialty
Gatekeeper-Medical Home
Telemedicine
Use of NP/PA’s
 Changes to treatment/care modalities
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Use of hospitalists
Use of extenders
Technology/drug developments
Specialist services trends
 Federal/State Regulations
Reform In the Works
• Greater emphasis on Primary Care and Prevention
• Patient Centered Medical Home demonstration
projects (PCMH)
• Improved Medicaid reimbursement for Primary Care
Physicians
• More people with access to coverage, will they use
it?
• Accountable Care Organizations to be tested
• Payment bundling may affect physician contracts
• Malpractice will affect recruitment (TBA?)
Changes to Treatment Modalities
 Continuing shift to outpatient procedures
 Greater use of minimally invasive surgery:
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Gastro - endoscopic procedures
Gen Surg. - use of endoscopy
Cardiac - use of coronary angioplasty
Orthopedics - arthroscopy and minimally invasive hip
replacement
 Primary care use of Hospitalists for IP care
 Oncology increasing use of Linear Accelerator and DNA
personalized treatment
 Robotic surgery
 Trends in birthing
 Chronic disease management
Provide Supportable Calculations
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Ensure consistency with Community Needs
Assessments:
Keep using the traditional market driven, supply/demand
data:
Understood by the government agencies
Use a weighted impact on standard ratios resulting from
changes to practice modalities
Recognize community need (HRSA and/or Coverage,
Service expansion)
Must represent the primary service area (75% of IP)
Identify Provider shortages at least over 3 year period
Trended epidemiology (Regional Govt. Health Orgs)
Service line need to meet future standards for care
Use for Budget projections on cost
Greater Access May Be Problematic
Getting the Right Fit
Physician Recruitment is a long term
investment, consider:
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How competitive is the specialty
Medical staff mix and characteristics
Population to be served
Community and recruit expectations
Support structures available
Hospital facilities and technology
Hospital financial status
Recruitment package
Matching Cultures
Managing expectations is made easier after
reality check:
• Have you identified the recruits motivators?
• What are the potential de-motivators?
• What is important to the family?
• What do your current medical staff say about the hospital
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and administration?
Is medical staff leadership supportive?
Is there a clinical quality expectation gap?
Age and style of practice of peers and sub-specialists?
Is it a participatory environment or top down?
Letter of Intent - “KISS”
Key discussion points:
Relocation
Recruitment
Policies
The
Opportunity
The
Employment
Contract
Employment Contract
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Term
Call coverage
Indigent and charity care
Outside activities
Professional liability tail coverage
Termination provisions
Restrictive covenant
Compensation
Specify duties resulting in incremental compensation
From the Trenches!
What’s Hot and What’s Not!
• Non-competes
• Call coverage and payment for coverage
• E.D. Coverage and payment
• CME’s
• MSO services for the practice
• Clinical service line directorships
• Employment “v” spin off to private practice
• Productivity planning
• Opportunities for research
From the Trenches
Be careful to avoid having an environment in
which the physician spends too much time
worrying about the contract terms and is not
focused on patients!
Warning signs:
 Is my check ready?
 Does that include my bonus?
 Limited office hours
Employed Physicians
There is no magic bullet with employment
contracts:
 Employed physicians are high level employees.
 As such they will thrive with good leadership
and in a good working environment where their
participation is valued.
Income/Productivity Packages
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Straight salary
Salary + Incentive
RVU’s
Net practice income
Leasing services
Paying for coverage
Medical Directorships
National Averages
Compensation Methods
Performance Adjusted Salary
43.8%
Fixed Salary
24.7%
Shift-Hourly-Other Time Based
Payment
6.2%
Share of Practice Revenues
19.5%
Other Compensation
5.8%
Bonus Available
Yes
45.3%
No
54.7%
Sources of Practice Revenue
Avg. % of Rev from Medicare
31.4%
Avg. % of Rev from Medicaid
16.8%
Source: HSC 2008 Health Tracking Physician Survey
Reasonable Compensation
It is all relative?
 A full-time Neurosurgeon generates an average of more than
$2.8 million a year on behalf of the affiliated hospital.
 Invasive cardiologists ($2.2 million)
 Orthopedic surgeons ($2.1 million)
 General surgeons ($2.1 million), and
 Hematologists/oncologists ($1.5 million)
 A General Internist brings in nearly $1.7 million a year on
avg.
 A Family physician more than $1.6 million
 Pediatrician more than $856,000.
*Merritt Hawkins Survey 2010
Reasonable Compensation?
Guidelines and sourcing information:
• MGMA statistics for employed physicians
• Level of previous experience
• Evidence of previous productivity
• References
• ROI of service line
• Need to maintain hospital viability
Physician Contracts
There are always 3 contracts per physician
This
Years
Last
Years
Next
Years
Explaining Your Productivity
Package
Before presenting a proposal, explain to the
recruit:
 What productivity packages your hospital uses
 Why and how they work
 How others have performed using them
 Show an example of how it could work for the
recruit
 What is expected to happen over the first year
 How will changes to contract be managed in the
future
Employment Model
Create a strong and sustainable business
model:
• Practice management expertise and leadership
• Clarity of vision
• Governance processes and physician
responsibilities
• Physician engagement in initiatives
• Hospital strategies
After the Start
The recruitment process is never really
finished:
 Tell them what they will get
 Mentor program
 Confirm that is happening
 Ensure access to administration is fluid
 Use liaison type services
 Year end meetings to confirm expectations are being
met
 Lay out expectations for new year
 Repeat…………………
Summary
 Recruitment is a Strategic Imperative
• Cost to recruit vs Cost of not recruiting
• Recruitment is a revenue building strategy
 Hospital strategies and community need
 No easing up over the next 15 years
• Look to the Community to help recruit
 Changes to how healthcare is and will be delivered
requires greater need analysis
 Managing expectations and getting the right fit
 Be upfront with what you have to offer
 The recruitment process is never over
 Retention, Retention, Retention