Six physicians from a Pittsburgh obstetrical and gynecological group will transfer their medical practice from UPMC Mercy to West Penn Hospital. The news of the physicians' move comes less than three weeks after UPMC took control of Mercy. In a statement, UPMC said Mercy remains committed to providing women with high quality, advanced ob-gyn services at the hospital as well as at various UPMC Mercy ob-gyn physician offices.
The model of a stand-alone department lacks efficiency and limits opportunity. Plus, news on Cleveland Clinic, nurse recruitment, and more. [Powered by Trinity Healthforce Learning.]
The Forbes Regional Campus of West Penn Allegheny Health System has provided rapid intervention cardiac care monitors to its servicing ambulance companies in Allegheny and Westmoreland counties of Pennsylvania. The monitors can transmit electrocardiogram data over wireless Internet service before a patient leaves home. By the time an ambulance delivers a patient to the hospital, a physician will have been able to review the EKG results and activate a catheterization lab team if indicated.
Gordon Docking has resigned as chief executive officer of St. Joseph Medical Center in south Kansas City in order to pursue different career opportunities. Docking's resignation will take effect Feb. 22, and at that point, his duties will be assumed temporarily by Fleury Yelvington, Carondelet Health president and CEO.
A commission appointed by New Jersey Gov. Jon S. Corzine has recommended that the state establish guidelines for identifying hospitals in financial distress that are worth helping, and those are that are not. Hospitals deemed essential would then be propped by state grants and loans, with what the state health commissioner described as an early-warning system. The report did not spell out which hospitals should be shuttered, but said that a good number of New Jersey's 78 hospitals were poorly managed and inefficient, and that a "large number of hospitals appear headed toward distress in the next few years."
The emphasis on physician retention has never been greater. A number of sources have told me that they expect the emerging generation of physicians to be much more inclined to jump from job to job than ever before. In fact, it is said that younger physicians expect to switch jobs at least five times over their careers. As administrators gear up for the much cited physician shortage, perhaps the most cost effective measures are those that keep doctors in place.
Lately Kevin Donovan, vice president of physician and ambulatory services for Elliot Health System, in Manchester, NH, is focusing more of his attention on coming up with ways to keep his physicians satisfied personally and financially with their jobs. Here are a few highlights from a conversation Donovan and I had recently about physician retention strategies.
Rick Johnson: What are the most common reasons physicians give for leaving?
Kevin Donovan: My experience is that physicians seldom leave for the tangible things that are relatively easy to address, such as pay, benefits, or call frequency. When physicians leave a practice these days it is more often than not due to issues of lifestyle--community fit, getting along with colleagues, or organizational philosophy. They tend to consider things like pay and benefits up front when taking a position, and they know these things can be negotiated as time goes on. But lifestyle issues--such as how supportive your colleagues are--are not as easily addressed.
RJ: What steps have you taken to retain physicians?
KD: We have taken all the steps that most organizations have as it relates to providing competitive pay and benefits within local and national markets. In addition, we have looked at ways to reward and recognize physicians for longevity coupled with successful achievement of goals. For example, recent retention initiatives will compensate physicians upon reaching certain years of service providing that they meet productivity expectations in a majority of those years. Organizations can also offer "passive income opportunities" to physicians as long as they are well within the scope of Stark and anti-kickback regulations. Examples of this include fair market value lease transactions, participating bond transactions, and other vehicles. We also offer mentorship programs, orientation efforts, community selection assistance, part-time work opportunities, and other assistance.
RJ: What have you found to be the most effective retention strategy?
KD: Turnover in the physicians' ranks often relates to "lifestyle" issues. The most effective retention strategies are those things that make a physician and his or her family feel part of the community and get them invested in their employer. You can pay a physician as much money as you want, provide them investment vehicles, and increase CME allowances, but if they are not happy in their day-to-day work and their family is not happy in their day-to-day interactions, no retention perk will keep them in that community. That is why our organization is focusing our future retention efforts on these softer components of physician retention.
RJ: How much money does it takes, on average, to retain a physician compared to the costs associated with losing a physician?
KD: The true cost of retaining a physician cannot be quantified as it takes more than just financial incentives and other perks to retain someone. The costs that are not quantified are time spent mentoring and other soft costs. Just considering our financial programs to retain a physician (including defined contribution plans, retention bonuses, CME allowances, etc.), the annual cost of retaining a physician is at least $10,000. This does not include earned time or vacation time provided to a physician. The cost of replacing a physician is approximately $50,000 and this doesn't fully take into account lost revenue opportunities and other negative aspects of turnover.
RJ: Why is your organization putting so much emphasis on physician retention?
KD: While physician retention has always been important to hospitals, the changing dynamics of the physician marketplace make it a higher priority today. As physicians exit training in this new market, many of them are looking for employment situations as opposed to starting their own practice, or even joining a few colleagues in private practice. In the past, physicians would start their own practice, develop a patient base or referring physician base, and the opportunity cost of leaving that situation was too great. Today, physicians often take their first position post-residency or fellowship with the thought process that they can leave in a few years if they don't like it. With the less risky proposition of being employed as opposed to owning a small business, the thought of leaving a community or employer is that much easier for a physician today.
Donovan will detail the physician-retention strategies he has put in place at Elliot Health System in a February 12 HealthLeaders Media audioconference. With the day-to-day oversight of the system's network of 115 physicians--including about 65 primary care and 50 specialty physicians--he works with physicians of all sorts. That's increasingly important given the recent shifts in physician demographics. I've gotten a lot of feedback about generational differences between physicians, and if you factor in the influx of female physicians and international medical graduates, as well as changes in employment preferences, today's physician workforce looks very different than it did just a few years ago.
Addressing "lifestyle" issues may seem daunting when it seems that no two physicians are alike. But as Donovan has discovered, keeping physicians happy isn't impossible. You just can't expect a one-size-fits-all solution.
Financial relationships between hospitals and physicians have come under scrutiny recently--due to a rise in whistleblowers reporting violations in hospitals and stricter enforcement of Stark Law, the anti-kickback statute, and the False Claims Act (FCA). This makes it more important than ever to conduct formal evaluations of "commercial reasonableness" and fair market value (FMV), which should be one of the first steps to demonstrating that agreements with and payments to physicians aren't going to lead to legal troubles.
Risk areas for hospitals abound--medical director and professional services/on-call agreements, space and equipment leases, employment agreements, management agreements, physician practice acquisitions, and other arrangements that may incur scrutiny of whether Medicare and Medicaid patients are referred in exchange for a fee.
Federal regulatory agencies and prosecutors are committed to protecting the integrity of the federal health programs and aim to prevent and punish improper financial relationships between hospitals and physicians that induce overutilization, adversely impact physicians' judgment, and/or result in funds being spent for unnecessary and expensive hospital services.
Begin with commercial reasonableness When judging commercial reasonableness, agencies look to see that the arrangement is a sensible, prudent transaction or business situation that serves legitimate, reasonable, and necessary purposes. If your financial arrangement doesn't meet this basic test, there's no need to determine fair market value or take further steps to set up the arrangement.
To ensure your arrangements are ready, start by asking a few basic questions:
What is the specific purpose of the arrangement? Why is the item or service necessary from this physician? How do the items or services relate to business or clinical plans or strategies? Is the arrangement essential to the functioning of the hospital?
Is there a formal written contract or agreement addressing the terms of the arrangement?
Is the arrangement duplicative of other arrangements or requirements?
Is there a potential for fraud, waste, or abuse? What features, controls and/or safeguards exist to eliminate or reduce such risks?
Is there a formal process for executive management and legal counsel to review and approve the arrangement?
Is there monitoring and auditing to determine the item or service was actually provided or performed, the total amount spent for the items or service, and a demonstrable outcome resulting from the arrangement?
Is there a regular assessment or evaluation of the arrangement clearly showing the arrangement is effective and there is a bona fide need for continuing/renewing the arrangement?
For example, consider medical director agreements and how the government's expert in a recent case evaluated the hospital's justification of the arrangements. The expert used some of the following questions and answers to make a determination:
Do the size of the hospital, number of patients, patient acuity levels and patient needs support sound business reasons for the arrangement? A small facility (fewer than 35 beds) with a relatively low patient census should need only one medical director to cover medical direction, meet licensure requirements, physician staff needs and patient care requirements.
Are the medical staff officers and committees active and involved in the direction of the hospital, or are medical directors needed to supplement the medical staff's work? Duties and responsibilities of medical directors should not be the same or similar to active staff members' requirements under the medical staff bylaws. Medical directors should not be paid for meeting attendance or work that is commonly performed by active staff members.
How many hospital committees and meetings require physician attendance? Other than meetings of the entire medical staff, the medical staff/hospital committee meetings and other meetings should require only one medical director to attend. It is questionable why a hospital needs multiple medical directors to attend committee meetings when one medical director will suffice.
Is the need for medical directors warranted if the hospital is part of a hospital chain or system that has developed patient care protocols and mechanisms to coordinate disciplines at its other hospitals? The need for numerous medical directors is not warranted in hospitals that are part of a hospital chain or system that has effective patient care management and interdisciplinary coordination mechanisms.
Are ongoing assessments of medical directors' performance conducted, and are the assessments used to evaluate whether medical director agreements should be renewed or hours reduced? Approval of monthly time sheets is insufficient as an ongoing assessment of a medical director's performance. Oversight and evaluation are ineffective if the hospital does not react to a medical director's lack of compliance or absence of need for continuing his services.
Assess fair market value If the arrangement is deemed commercially reasonable, it must also meet FMV requirements, which can be complicated due to the affiliation of the parties through referral relationships and their economic interests.
Stark directs hospitals and physicians to determine price or compensation as if bona fide negotiations were occurring by well-informed parties "who are not otherwise in a position to generate business for the other party." Hospitals and physicians are to consider contemporaneous comparable arrangements occurring in the market "where the price or compensation has not been determined in any manner that takes into account the volume or value of anticipated or actual referrals."
Now that CMS has repealed the hourly rate determinations that were deemed FMV, you can use any evidence that demonstrates comparability to other arms-length transactions in the market. Using external salary surveys of physician specialties remains a CMS-recommended method of FMV determination, as do independent valuations/appraisals. However, any comparables that involve physicians in a position to refer and/or take into account the value or volume of referrals will not serve as a valid comparable.
The OIG is prohibited from addressing whether a particular arrangement occurred at FMV, so it has dealt broadly with FMV issues. Suspect and disfavored compensation methods include:
Discounts below fully-loaded costs and discounts compared to prices given to others for similar items/services but where there was no potential for referrals.
Per patient, per order, "per click" and percentage-based compensation.
Availability of items/services from a non-referral source at a cheaper rate or under more favorable terms.
Direct or indirect ties between compensation and the amount of federal healthcare program reimbursement received.
Unreasonable, nonuniform or undocumented calculations.
Comparables based on distorted market rates; e.g., if all providers of the purchased item/services in the market are physicians.
Compensation not commensurate with physician's skill level and experience.
Hospitals may need to review their compliance documentation, controls and audits to verify they have complied with the FMV and commercial reasonableness tests of the Stark and anti-kickback laws. With new reporting responsibilities arising, hospitals should have the information on physician arrangements compiled to reduce the response burden.
Lew Lefko is a Dallas-based health law attorney for Haynes and Boone, LLP with more than 30 years of experience in health law and health planning. He may be reached at lew.lefko@haynesboone.com.
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As a general rule, an in-house physician recruiter becomes cheaper as he or she recruits more physicians per year. If your facility consistently recruits multiple physicians per year, it's probably time to consider hiring someone to oversee those responsibilities. But how many physicians must a recruiter bring in annually to make the in-house option more cost-effective than using a search firm?
The magic number is roughly seven, though it may vary from practice to practice, according to Chris Kashnig, manager of physician recruitment with Christie Clinic in Champaign, IL. The key is to look for the break-even point at which the amount of the recruiter's salary dedicated to each search is roughly equal to the average search firm charge.
When a facility recruits seven physicians annually, the average cost per physician between the two options evens out, says Kashnig, who calculated the threshold based on average recruiter salaries and search-firm costs. Recruit more than that, and recruitment costs are generally lower when handled in-house, particularly when recruiting within a single specialty.
"If you're looking for a number of physicians in a given specialty, there are some economies of scale on the sourcing," Kashnig says. For example, if a facility needs to hire a dozen primary care physicians, one ad may net 10 responses from potential candidates, of which two or three may eventually join the practice.
Because an in-house recruiter's salary is fixed, the costs are diffused as he or she successfully recruits more searches. For example, if the average recruiter makes a $60,000 annual salary with $12,000 in fringe benefits, a facility is effectively allocating $14,400 in recruiter salary per physician if only five physicians are recruited per year.
Most other recruitment expenses don't have similar economies of scale (interview costs, for example, will be the same per physician regardless of the number being recruited), so the recruiter's salary has a significant effect on overall costs. Increase the number of recruits to 10 physicians per year using the same example, and $7,200 of the recruiter's salary goes to each physician.
Although his calculations can provide a useful benchmark, they may not apply equally to all situations, Kashnig says. Recruiting a physician can be much more difficult and costly in certain specialties or regions of the country.
In this opinion piece published in the Rochester Democrat & Chronicle, the contributors tout a new effort in Rochester, NY, that will continue to review physician reimbursement rates against the national average for the next two years to remain competitive.
Researchers at Temple University have found that providing physicians with simple, relatively inexpensive Internet-based tools leads to more front-line reporting of infectious diseases, food-borne illnesses and other public health concerns. The tools include e-mail reminders, an informational Web site and programs for hand-held devices.
