Strategic Physician Recruiting Calls for Forecasting, Profiling

This article appears in the March 2012 issue of HealthLeaders magazine.

With a nationwide physician shortage juxtaposed against the need for organizational growth to bolster the bottom line, hospitals and health systems are constantly, and feverishly, trying to fill physician vacancies. However, the "fervor to fill" can create a reactive recruiting cycle that can cloud the strategic nature of the hiring process and ultimately result in ill-fated personnel choices. With millions to be gained or lost with each decision, creating a comprehensive recruitment strategy can help you hire and keep Dr. Right and sidestep Dr. Right Now.

Forecasting need
Six years ago, J. Gregory Stovall, MD, senior vice president of medical affairs and organization development at Trinity Mother Frances Hospitals and Clinics in Tyler, TX, brought to light an employment issue: The 400-plus-bed organization was losing far too many physicians. His organization had a physician turnover rate of 14%, more than double the industry average, according to the 6th annual Physician Retention Survey from the American Medical Group Association and Cejka Search.

The stats caused Trinity Mother Frances, which employs more than 250 of its nearly 500 physicians, to reevaluate how it approached the whole process. The organization estimated $50,000–$75,000 was spent per physician on recruitment. Then there was the additional $200,000–$300,000 spent to train, credential, market, and onboard the physician. Total cost per new recruit came to roughly $250,000–$350,000.

Stovall's initial estimate of the financial loss due to turnover was conservative. After calculating the recruiting and onboarding costs, the organization looked at benchmark data and also calculated the downstream revenue lost when a physician left the organization. The result: An estimated $1 million per physician was lost with each doctor's departure, Stovall says.

The retention numbers made it clear that the organization needed to keep the physicians it hired and to be certain it was hiring candidates that fit the organization. To do that, it needed to get ahead of recruitment and slow turnover. Stovall says to accomplish these goals the hospital created an annual $100,000 retention budget. The money was used for outings, training programs, and other events to appeal to physicians and bring them into the fold.

Additionally, Trinity took a proactive approach to the hiring process. "We directed our department chiefs to make recruiting plans that looked out three to five years. That plan translates down into our annual recruiting plan for the organization," he explains. "It goes out a couple of years because you can't wait until the fiscal year to start thinking about your recruiting."

Getting ahead of the hospital's physician demand meant the organization could search for the best fit for the position and culture. The approach has yielded results and saved millions—the organization's current turnover rate is just 5%, nine percentage points lower than when the effort started.

Getting ahead of the physician need is essential and an integral part of the plan at Morristown Medical Center in New Jersey, part of Atlantic Health. David Shulkin, MD, president at the 692-staffed-bed hospital and vice president of Atlantic Health, explains that his organization creates a medical staff strategic plan as part of the recruitment process.

The organization's department heads factor in the age of the physician, the specialty, and the demand for and potential growth of each service line, and then calculates the estimated number of medical vacancies. Those are the positions that the organization's six in-house recruiters strive to fill in advance of the need.

The data analysis is just one component of the process, Shulkin says. The organization does an annual review of its employment and compensation models to be sure these are in line with the national and regional norms. "I've run several different organizations and the one thing you learn when you move around is that each local market is different. There are some markets where the employment model is dominant and well-established, and other areas where another one is," says Shulkin.

In Morristown, he says, the independent practice prevails. "[Hospital] employment isn't dominant so we've worked hard to create a number of different alternatives to employment to help physicians feel comfortable and still be closely aligned with the system," he says. That can be through a professional service agreement, establishing an accountable care organization, helping the physicians form a single specialty group, or creating a joint venture. "Part of the skill involved in strategic recruiting is understanding the various modalities and choices available when addressing the needs of the physicians," adds Shulkin.

In some cases, however, quantifying the need for physicians may have to extend beyond the hospital's walls and into the larger community. For example, 47-bed Columbus (NE) Community Hospital is helping group practices with their own recruiting. The joint effort has resulted in success bringing candidates to the rural area over the past two years. In total, the small rural facility has recruited 27 physicians and three midlevel providers to practice at the hospital or within the community—and all for less than $5,000 per recruit (the in-house recruiter's time plus physician sign-on bonuses for in-house recruits).

The effort is part of a larger strategy at CCH. Two years ago, the organization's president and CEO, Michael Hansen, determined with the board that it was vital to place more emphasis on physician recruiting, particularly to fill gaps in specialty areas of care. Hansen hired Amy Blaser as the vice president for physician relations and business development to handle the recruitment efforts.

"The practices feed the hospital, and that's how we get patients—they're not our competitors," notes Hansen. "We want our patients to get their care as close to home as possible. So we think it's important for the physicians to be able to refer here."

The co-recruitment effort between the practices and the hospitals is working, too. "We decided if we were going to focus on the overall physician community, we didn't just need to look at which doctors we needed to hire, but the doctors that could also be added to help the group practices. So we help them with a lot of the recruitment process, but they also put money into the game with sign-on bonuses for candidates," explains Hansen.

Since Blaser joined the hospital she has been in constant communication with local practices and finding physicians for these practices when a need arises. Both Hansen and Blaser say the co-recruitment strategy is working and helping fill gaps in care within the community.

Intentional candidate profiling

Once a hospital has established the need for a physician, the next step is not advertising the job, but rather creating a profile of the type of doctor to fill the opening, explains Roger McMahon, director of physician employment services at Mercy Medical Center in Des Moines, IA, and T. Clifford Deveny, MD, senior vice president of practice management of the Catholic Health Initiatives system of Englewood, CO. Mercy Medical, part of CHI, employs 330 physicians and McMahon says annually the facility has 20–22 physician opportunities. 

"You want to know the individual is going to have the right qualifications but that the personalities will also fit," says McMahon

Shulkin agrees. "Depending upon the level of the position, we may approach [the creation of this profile] a little differently, but you want input. If we are doing a [department] chair search, for instance, we'd pull together a search committee and solicit formal input from members of the specialty as well as the broader medical community to get clinical and administrative characteristics of who should be in the position. For someone below that level, we might reach out to other physicians in the department and the nursing staff for that information."

The candidate profile should include the clinical qualifications, but also personality attributes that might make this candidate mesh within the department and hospital culture. These profiles can be used during telephone screening interviews and can prevent the wrong candidate from being flown in for an interview or, worse, selected for a position.

Work the in-house network
The strategic recruitment of physicians goes beyond placing an ad or using an external recruiting agency. It is a targeted search to fill the vacancy, and the sources for this story agree that having an in-house recruiter is a key to finding the best candidate—though they may use an external agency occasionally.

Twelve years ago, Centra Health, a three-hospital, $700 million system in Lynchburg, VA, eliminated its in-house recruiting team due to budget reasons, but two years ago that changed, explains Chalmers Nunn, MD, senior vice president and chief medical officer at Centra Health and president of Centra Medical Group.

"If you look at the market and try to find a physician now, with the shortage, it's very difficult," he says. That is why the organization now uses three in-house recruiters to help locate doctors. "The other thing that has changed is hospitals are employing physicians more frequently. Now 50% of doctors are employed, and it's going up quickly—we're now in the physician business as much as we're in the hospital business."

Nunn says another reason the organization added an in-house team and stopped using agencies was the process. "It felt more like they were just résumé mills and the candidates being presented weren't vetted for how well they might fit the actual opening or hospital culture, plus the agencies were costly," he says.  In 2009 the in-house team brought in 60 candidates and filled 22 slots. This past year the team addressed 33 requests, hosted 51 candidate site visits, and oversaw 22 placements. The  total cost per candidate averaged $12,500 versus the agency cost of $25,000–$30,000 per candidate, plus another $12,000 for the marketing and any additional travel expenses for the candidates.

"We do it cheaper and better. We follow up with the candidates quickly, and if we want a candidate we get a contract to them within a couple of weeks. The only weakness with in-house recruiting is we can't cast a wide net like some of the big agencies," he says.

The ability to do a nationwide search, however, is not necessarily a weakness when it comes to locating the best candidate. Shulkin, Blaser, and McMahon say reaching out to internal staff is often a better approach to the process.

"We always start locally, and we always start with our own internal family of physicians and staff," says Shulkin. "We often find the best fit comes from the people who already know us. If we need a radiologist, we'll ask a mammographer or a breast surgeon or oncologist if they know of someone in the area or someone who might move to the area."

Larger systems have a network of physicians to draw upon—something Mercy Medical Center is able to capitalize on through the CHI network.

"Our size is an advantage that we can leverage to keep our recruiting search costs down. There's a national database for all our recruiters to use," says Deveny. "And when we do have to use an external agency, we've put together a set of standards for our vendor contracts so we can't get taken advantage of on the pricing of the services—plus CHI has agreements with nine national recruiting companies."

The organization is also developing a profile with the qualities a CHI physician should possess, as well as a set of standard benefits and cultural norms that can be expected at all hospitals within the network. With 76 hospitals and other healthcare facilities in 19 states, the organization anticipates that by adding these attributes into the network it can retain more physicians within its family of hospitals. "If a physician is ready to leave, then they can choose another of our hospitals and know there will be certain standards they can rely on," says McMahon.

Candidate searches can also be done over time by working with university medical students and residents. "If you have a local medical school or residency program, building relationships with those residents early on pays dividends," says Stovall. "We give free classes about practice management and offer training and leadership classes to those residents to create a welcoming environment early on in their residency so they'll consider staying in the area."

These targeted approaches to recruiting candidates for current and future vacancies do take more time; however, more traditional blanket searches done by agencies or through national job board postings can be more expensive. Ultimately, the difference between recruiting and strategic recruiting is time, money, and fit. Recruiting is the search for any candidate to fill a position—it can produce candidates quickly, and it can be expensive. In contrast, strategic recruiting is a laser-focused hunt for the best physician to fill an opening. It can take more time to find the best candidate, but the benefit is in the doctor's employment longevity with the hospital.

"It's hard to put the price on finding the right physician for a job. We know when we pick a person that's not the right fit it's very expensive to the organization," says Shulkin. "We're getting smarter about recruiting … we're looking for longer-term relationships with physicians."

Reprint HLR0312-7

This article appears in the March 2012 issue of HealthLeaders magazine.