In Physician Recruiting, Local Needs Trump National Trends

Two national reports on physician recruiting and compensation confirm some of what we've suspected, but also show how complex and variable the process has become depending upon location and specialty. As in politics, it seems all healthcare is local.

Ken Hertz, a principal with the Medical Group Management Association's Healthcare Consulting Group, tells HealthLeaders Media it's hard to pinpoint many trends because healthcare is in a state of flux.

"There is a lot of change going on, but we are in a period where we are in the middle and it will probably be a year or so before the dust settles and [we see] what it all means," Hertz said. "You have the movement towards hospital and system employment. You have some aggregation of practices going on, but not as much as one would think. You've got private practices trying to get competitive with hospitals. You've got shifts in population, shifts in the age of physicians, general population-to-physician ratios, and then all of the healthcare reforms and accountable care organizations, and people are concerned that the sky is falling."

Merritt Hawkins' 2011 Review of Physician Recruiting Incentives, for example, confirms that the demand for primary care physicians continues to be strong, and that more physicians are becoming employees. The Irving, TX-based physician recruiter tracked more than 2,660 physician recruiting assignments nationwide from April 1, 2010 to March 31, 2011. In that time, 56% of the physician search assignments featured jobs with hospitals, up from 23% five years ago. Only 2% of Merritt Hawkins' search assignments featured openings for independent, solo practitioners, down from 17% five years ago.

"The era of the independent physician who owns and runs his or her practice is fading," Travis Singleton, senior vice president of Merritt Hawkins, said in the report. "Doctors today are more likely to be employees working for increasingly large health systems or medical groups."

Beyond that, local variables kick in. A report from MGMA -- Physician Compensation and Production Survey: 2011 Report Based on 2010 Data -- finds that compensation growth for primary care and specialty care physicians was all over the board in 2010, and appeared to be determined as much by location as by area of medical expertise.

For example, median compensation for both primary care physicians and specialists was highest in southern states, with primary care physicians earning a median of $216,170, and specialists earning a median $404,000. By comparison, primary care physicians in eastern states earned a median $194,409, and specialists earned a median $305,575.

Hertz says that factors beyond cost of living and demand may explain regional compensation variations. "The Northeast is heavy into … I would hesitate to call it managed care, but certainly more structured PPO/negotiated plans. California has the foundation models, the huge groups, again the heavy negotiations. The South has an aging population, a lot of specialists, and gerontologists," Hertz explained.

Both Merritt Hawkins and MGMA found that some physicians can't necessarily bank on an increase in compensation every year. Five of the Top 20 recruited specialties in the Merritt Hawkins survey saw their average base salary decline between 2009/10 and 2010/11. Family practice base salary fell from $200,000 to $197,000. Neurology fell from a base of $281,000 to $256,000. Hematology/Oncology fell from $385,000 to $369,000. Radiology fell from $417,000 to $402,000, and endocrinology fell from $219,000 to $218,000, the survey showed.

MGMA found that orthopedic surgeons reported median compensation of $514,659 -- the highest median of and specialty in the survey -- up 3.7% from 2009, and 15.2% from 2006. However, urologists reported median compensation of $372,455, a drop of 4.66% from 2009, and up 4.15% from 2006, while radiology/diagnostic reported median compensation of $471,253, a drop of 1.6% compared to 2009, and up 5.5% from 2006.

"The cuts in imaging continue to impact cardiology, radiology, and urology, but the big trend toward hospital employment for cardiology probably kept them from seeing any big losses," Hertz says.

While it might be difficult to spot firm and fast trends in physician recruiting, Hertz says, healthcare organizations that are successful at physician recruiting do share some common characteristics.

"All too often the healthcare organization, to be an effective recruiter, thinks it's all tied up with money. For the new docs money is important. But work/life balance, quality of life, integrity, transparency, those are all important issues," Hertz pointed out. "The successful groups from a recruiting standpoint are those that embrace the latest social networking and embrace some of the Internet technology to surface candidates."