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Help (Still) Wanted

Philip Betbeze, for HealthLeaders Magazine, June 11, 2009
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The bad economy has not halted hospitals' physician hiring trend.

Hospitals may be laying off a lot of people in this recession, but many of them are still hiring physicians. If you didn't know better, you'd think such hospitals are strategically no better than losers at the horse track, sauntering up to the betting window yet again and aching to lose money. Why? Because employed physicians generally are bottom-line negative in the first few years of their employment. But job offers haven't tapered off much under the weight of perhaps the worst economic crisis we've seen in this country in at least two decades.

In addition to nonclinician layoffs, capital projects are being slashed or delayed across the country, even at the largest, most financially healthy hospitals and health systems. The list of health systems that have put off multimillion-dollar projects includes the most recognizable names in the industry, from Emory Healthcare in the south to Sutter Health in the west. Googling "hospital construction delay" offers up pages of relevant results.

But physician employment continues, although it has slowed to some degree, because it's a key strategic issue for many senior leaders working to align incentives, not to mention the fact that many younger physicians prefer the structure and regular hours that hospital employment can provide.

"The poor economy has slowed things down in employment but hasn't changed the basic idea that hospitals are looking to add physicians and physicians are looking to join large groups or hospitals," says John "Hank" Duffy, president of JHD Group, an Addison, TX-based physician group consulting firm.

He says the larger, more well-known hospitals and health systems have been hurt disproportionately by the poor economy as their investment portfolios have fallen in value dramatically.

"They're being very cautious on what they spend money on going forward, so there's no question the trend is slowing down," he says. "If they were planning on building six physician organizations over next three years, they're now building three. So the core strategy is not changing, the speed is."

Some not slowing
Michael Schwartz might dispute that opinion, at least as far as it concerns Prince William Health System in Manassas, VA, where he is the chief executive officer. Schwartz and his board recently finalized a deal to be acquired by North Carolina nonprofit giant Novant Health, which is seeking to broaden its geographical footprint.

Prince William announced the deal with Novant just a year after a planned merger with neighboring Inova Health System fell through because of Federal Trade Commission concerns that the deal would be anti-competitive. Prince William County is one of the fastest-growing counties in the United States and is underserviced in healthcare, Schwartz says.

"Standalone hospitals are a diminishing breed in the United States," he says. "We needed a merger partner to do all the things we want to do."

Among the things Prince William wants to do is advance several strategic initiatives by adding to its capabilities in four core services: oncology, cardiology, general surgery, and orthopedics.

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