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Recruiting from the Inside

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In-house recruiting can save money and may ensure a better fit.

When is it time to in-source your physician recruiting? As CFOs continue looking for ways to trim costs, the thought of adding staff may be far from top of mind. Yet outsourcing physician recruitment can be a costly line item, especially for facilities that are heavily recruiting physician and executive positions. Adding a full-time employee to manage the process in-house carries a potential savings of anywhere from hundreds of thousands to even millions of dollars annually.

Recruiting to fit your strategy
With each flip of the calendar, a very scary and real physician shortage is developing. The American Medical Association says there are more than 900,000 practicing physicians; however, nearly 36% are 55 years old or older. Retirement looms large for this group of 170,000 physicians, and it should weigh heavily on the mind of any CFO looking to grow in the next 10 years. It seems that many financial leaders are attempting to do just that, with internal resources, as evidenced by the growth at the Association of Staff Physician Recruiters, a professional organization for in-house physician recruiters, which saw its numbers go from 400 to 1,200 in just five years.

"Urban and rural hospitals, medical schools, and clinics are recognizing that if they don't hire someone whose everyday job is recruiting and retaining physicians, they are probably going to lose good physicians to the competition," explains Brett Walker, ASPR president and director of physician recruitment for Clarian Health and Indiana Clinic. Clarian Health is a private, nonprofit organization, which owns or is affiliated with more than 20 hospitals and health centers throughout Indiana and close ties to the Indiana University School of Medicine.

Walker was hired at Clarian Health in 2001 to create and develop its in-house physician recruitment program, which in nine years has grown from one FTE to seven. Clarian, which has a total staff of 10,613, including 1,505 physicians, owns or is affiliated with more than 20 hospitals and health centers throughout Indiana and is closely tied to the Indiana University School of Medicine. Walker and his department help recruit for many of the affiliates.

"It started with recruiting for positions outside of Indianapolis or occasionally recruiting faculty to the school of medicine. Then it snowballed. In 2009 we recruited over 100 doctors and of those 95% have been recruited through our in-house resources or methods," he notes.

But when is it the right time to grow in-house recruiting at a facility? Much of that decision depends on the hospital's overall strategy and long-term outlook for physician hiring, says Joe Felkner, CFO and senior vice president at Lehigh Valley Health Network in Allentown, PA. Felkner joined LVHN in August 2009, after spending 10 years as CFO and later strategy officer for the community-owned, nonprofit Baptist Healthcare in Pensacola, FL.

At Baptist, Felkner says, two in-house recruiters concentrated solely on physician recruitment. Juxtapose that to his arrival at LVHN, where Tammy D. Jamison, director of physician and executive recruiting, heads a team of seven FTEs striving to keep their 1,100-physician team fully staffed, along with handling executive search responsibilities. It's a program that has grown considerably in the 20 years since Jamison joined the hospital, when it was just a three-person in-house recruiting team.

"We started this department knowing we would be a growing system, and we saw well in advance that there would be increasing interest in employed physicians," explains Jamison, who helps retain the 400-plus employed physicians LVH has on staff.

Moving in-house
Though strategy drives key objectives for the hospital, it is the financials that determine viability—and taking the majority of physician and executive recruiting efforts in-house can offer a potentially large return on investment.

"Doctors are the revenue producers. Without the doctors, it doesn't matter how nice our facility is or what awards you've won. If you don't have doctors, you have nothing. So I don't think you can put a price tag on trying to recruit the best talent for the facility," says Walker.

Strategically, that may be true, but there is indeed a price tag for finding physicians, and it's a steep one for hospitals that regularly use external recruiting firms. Consider that the average external recruiting firm charges $18,000 to $35,000 per physician search (depending on the specialty). Compare that to the average $60,000 to $70,000 salary plus benefits of one in-house recruiter, according to ASPR and MGMA.

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