Physician C&ompensation
Recruitment
May 2009
May 2009
Vol. 10Vol.
No.175 No. 11
INSIDE
Resident recruitment
■■ Many
organizations
are signing recruits
while they are still in
residency—and paying
them while they
complete training.
Learn about this trend
on p. 4.
Specialty compensation
■■ Learn
more about
the challenges facing
emergency medicine
physicians and
compensation and
recruitment trends
on p. 6.
Recruitment and staffing
■■ Phillip
Miller discusses
some issues raised
by offering housing
assistance to physicians
on p. 11.
Ask the experts
■■ Our
experts talk about
some of the issues
raised by healthcare
reform efforts on p. 12.
A HealthLeaders
Media publication
Fit, family, formal programs keys to retention
AMGA survey finds slight dip in turnover, but it’s probably only temporary
The recession appears to have—at least temporarily—slowed physician turnover. But the factors
that make retention such a challenge haven’t disappeared, and hospitals and practices continue to seek
ways to keep physicians they’ve recruited.
So it’s not surprising that the 2008 Physician
Retention Survey from AMGA and Cejka Search finds
that groups are renewing their focus on retention. It
identifies current trends and provides some insights
into best practices, from actively courting spouses
to implementing formal retention programs (see
“Best practices” on p. 3 for more information).
The survey includes data from 50 AMGA
respondents, whose groups collectively employ
9,985 physicians. Data were collected in the last
quarter of 2008.
Turnover down
Survey respondents reported a 6.1% turnover
rate in 2008, compared to 6.7% in the 2006
survey and 6.4% in 2005. (The 2007 retention
survey didn’t compile turnover data; it was a
supplement to the 2006 survey.) That breaks
down to 5.9% among full-time male physicians
and 6.6% among full-time female physicians in
2008. Full-time male physicians over 55 and
part-time female physicians under 39 are at the
greatest risk for leaving.
The recession is one factor putting a damper on
turnover. The economic slump has made physicians
less mobile (because of the downturn in the housing market), more risk-adverse, and more likely to
delay retirement, says David Cornett, regional vice
president at St. Louis–based Cejka Search.
But the economy hasn’t affected the larger
retention issues.
“Long-term dynamics remain unchanged and
would lead me to anticipate gradually increasing
rates of turnover,” Cornett says.
“Long-term dynamics remain
unchanged and would lead me to
anticipate gradually increasing
rates of turnover.”
—David Cornett
Moreover, Cornett thinks the turnover will
accelerate quicker outside of AMGA membership. Larger, more sophisticated practices—such
as those in the survey—are increasing their
emphasis on appropriate hiring and retention
initiatives, but that’s not necessarily the case for
all practices.
At least among those surveyed, the turnover
appears to have been neither unexpected nor unacceptable: 67% of respondents found the rate of
turnover in their practice was “close to expected,”
and 73% found their turnover rate was “acceptable,” a significant jump from the 2006 results, in
which 58% said turnover was acceptable.
Family, fit, and culture
As in the 2006 survey, fit and family were top
reasons for turnover: Fifty percent cited “poor
cultural fit with the practice” and 32% indicated
“relocation to be closer to family” as the reasons
for leaving practices voluntarily.
continued on p. 2
A HealthLeaders Media publication
AMGA survey
continued from p. 1
When all family priorities regarding separation are factored in, family-related concerns are just as important as
cultural fit (see “Why physicians leave” below).
The survey suggests that compensation is a secondary
consideration. “Seeking higher compensation” was the
third most frequently cited reason for voluntary departure.
Compensation may be a reason for a physician candidate to
rule out a practice during recruitment, but long-term retention depends more on other factors—in particular, fit and
family—at least as long as the compensation is reasonable,
Cornett says.
Accordingly, the ability to assess the cultural fit and family needs of candidates appears to be an important factor
in retention plans, the survey finds. Ideally, this begins
by including the spouse or partner early in the recruiting
process.
Most respondents (71%) indicated they began communicating with the spouse or significant other before or during
the first in-person interview. Only 2% said they waited until
after signing to reach out, whereas 10% had no interaction
with the candidate’s spouse or significant other.
Ignoring the spouse or partner is not a good plan, says
Cornett, noting that “80% of the decision to relocate is
ultimately up to the spouse. Spouse interests, concerns, questions should always be addressed up front as part of the
interviewing process. The more resources an organization
devotes to making the spouse feel comfortable and valued,
the better the results will be.”
It’s a practice that isn’t limited to large groups, and it can
pay dividends in the ensuing years. Maintaining a friendly
relationship with physicians and their spouses provides
leverage when it’s time to renegotiate contracts, notes John
Collmer, placement director at The Carlisle Group, Inc., in
Irving, TX.
The rate for those groups was 44%, compared to 50% for
those without a defined program.
Forty-eight percent of respondents reported having a
defined retention program; that’s up from 40% last year. Of
those with such a program, 61% have formalized the program
with identified goals and strategies; that’s up dramatically from
20% in the 2006 survey. The number of practices that have
defined retention programs has been rising each year; still,
fewer than half of those surveyed have such a program.
That’s not surprising, since until a few years ago, retention
wasn’t as big of a concern. “The prior generations of physicians would select a practice after completing training and
would expect to stay at that practice for their whole career,”
says Cornett. “That is not the case with today’s generation
of young physicians.”
As more data come in that suggest a link between retention programs and lower turnover—and as the surveys raise
awareness of the importance of such programs—the focus
on developing retention plans has increased, he says.
Even without a formalized program, most are doing something. Two-thirds of respondents conduct regular physician
job satisfaction surveys. Even more (69%) conduct exit
Why physicians leave
Among voluntary resignations, the following reasons were
most frequently mentioned by the departing physician:
»» Poor cultural fit with the practice: 50%
»» Relocated to be closer to own or spouse’s family: 32%
»» Seeking higher compensation: 26%
»» Other: 26%
»» Relocated to find a better community fit: 22%
»» Spouse’s job required relocation: 18%
»» Incompatible work schedule: 8%
»» Excessive call requirements: 6%
(Respondents could choose more than one answer.)
Formalized retention programs
One clear best practice that emerges from the survey is
the use of formalized retention programs.
Respondents with a defined retention program appear to
reduce the percentage of physicians leaving during their first
three years.
Source: 2008 Physician Retention Survey from AMGA and
Cejka Search (www.physicianretentionsurvey.com).
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2
Physician Compensation & Recruitment May 2009
© 2009 HCPro, Inc.
A HealthLeaders Media publication
interviews and use the data to monitor trend information
(67%), create action plans (58%), and provide feedback for
departmental use (52%).
It cites educational loan forgiveness, which tends to be
structured over three to 10 years, as an example.
Planning ahead
Three years—and beyond?
Of those physicians leaving a practice, 46% separate
within the first three years. Certain incentives can cut
that rate.
“Using the 46% of physicians who leave in their first
three years as a base for comparison, the following incentives
appear to contribute toward a lower percentage of physicians
separating in the first three years: income guarantees (45%),
defined retention programs (44%), educational loan forgiveness (33%), and retention bonuses (29%),” the authors
write in the report.
Since the greatest vulnerability for turnover is in those first
three years, it makes sense to structure incentives accordingly. However, there may be some benefit to extending
incentives even further.
Anecdotal data suggest that incentive programs, when
structured to pay out beyond that period, seem to have
a positive effect on recruitment and retention, the survey
report noted.
The recession may have rendered some retention issues
less dire than in years past, but when the recession ends,
those challenges will reemerge.
The economy may be slow, but the other trends remain
in place, says Cornett. The physician work force continues
to experience the challenges of an increasing shortage and a
gender and generational shift.
Successful groups will have systems in place to meet these
challenges. “Groups that succeed will be those who continue
to pay attention to offering flexible schedules, cater to work/
life balance and family issues, develop proactive retention
plans, and learn to recruit more effectively in the first place,“
Cornett says. H
PCR sources
John Collmer, placement director, The Carlisle Group, Inc., 545 East John
Carpenter Freeway, Suite 620, Irving, TX 75062, 866/722-8957; www.tcgrec.
com.
David Cornett, regional vice president, Cejka Search, 4 CityPlace Drive, Suite 300,
St. Louis, MO 63141, 800/678-7858; www.cejkasearch.com.
Best practices
»» Listen and respond to issues, including EMR upgrades and
Respondents to the 2008 Physician Retention Survey from
AMGA and Cejka Search identified some of their most successful retention tactics and strategies, including:
»» During the interview process, make sure the candidate is a
»» Launch pilots to try new ideas and resolve areas of
dissatisfaction
match for the long term
»» Implement strict hiring standards to ensure a good fit
»» Conduct orientations and provide regular follow-up meetings
in the first two years
»» Involve new recruits in the partnership as much and as early
as possible
mentor programs
»» Involve physicians in leadership and policy decisions; provide
»» Provide flexible FTE status (e.g., part-time positions or jobshare opportunities)
»» Combine clinical practice with research opportunities
»» Provide incentive compensation
»» Have COO and CFO monthly interaction with each office
»» Have physician leadership communicate with individual shareholders in addition to the quarterly meetings
them with a sense of ownership, autonomy, and control
»» Ensure that medical directors are engaged with departments
work flow and relationships
Source: 2008 Physician Retention Survey from AMGA and Cejka
»» Listen to, and when possible address early, concerns about
»» Develop a work/life balance program
Search (www.physicianretentionsurvey.com).
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© 2009 HCPro, Inc.
May 2009 Physician Compensation & Recruitment
3
A HealthLeaders Media publication
Trend: Supplement stipends to win early commitment
Residency stipends are growing, albeit slowly, according
to the American Association of Medical Colleges’ (AAMC)
annual survey. But for a growing number of residents, those
stipends are only the starting point.
Increasingly, organizations are signing recruits while
they are still in residency—and paying them while they
complete training. In fact, 19% of the respondents to
the AMGA and Cejka Search 2008 Physician Retention
Survey (released in March) indicated they offered such a
supplement, and the number may be increasing. (For more
from this survey, see “Fit, family, formal programs keys to
retention” on p. 1.)
The use of such bonuses began to increase around spring
2006, says Bobbie Aday, senior partner at The Carlisle
Group, Inc., in Irving, TX. The trend among residents seeking
stipends has been steadily rising since then, Aday says.
Jim Stone, cofounder of Dallas-based Medicus Partners,
Inc., points out that most residents are not offered these
stipend supplements. But for those few who receive it, the
money can make a substantial difference. “We typically see
stipends at $12,000–$18,000 per year, or $1,000–$1,500
a month. That makes a big difference to a physician earning
$45,000–$50,000 per year in training,” says Stone. (For
AAMC’s current resident stipends, see the chart on p. 5).
On average, St. Louis–based Cejka Search has seen stipends in the $1,200–$1,500 per month range, says Kathy
Murray, senior director of key accounts in Cejka’s physician search division. This sort of incentive can be attractive
to residents facing tremendous debt. The 2008 AAMC
Graduate Questionnaire found that, for the fifth year in a
row, medical school graduates report higher education debt
than the prior year’s graduates. Of the 13,400 respondents,
17.7% have loans totaling $200,000 or more. The average
debt for medical graduates is $141,751, $10,000 more than
in 2007, according to the survey (for details, see www.aamc.
org/newsroom/reporter/dec08/graduates.htm).
Varies by need
For the most part, these stipend supplements are offered on a
case-by-case basis and reserved for the hard-to-recruit specialties,
according to the AMGA/Cejka survey. Generally, the resident
requests the money, which can be structured as part of a signing
bonus or as an advance on salary, Murray says. The parties sign
a promissory note, requiring the candidate to repay the money if
he or she reneges.
The use—and amount—of the stipend varies by how
acute the need is at the recruiting organization. Aday has
seen stipends as high as $24,000 to help lure future specialists to rural areas. She reports that 87% of the firm’s rural
clients are willing to offer stipends to attract specialties,
compared to 11% of those in metropolitan areas. Stipends
are most common in internal medicine, orthopedic surgery,
neurosurgery, urology, and family medicine, says Aday.
Locking in recruits early? Perhaps…
The stipends are offered in the final year of residency, says
Murray, but that, too, may be changing. Stone reports that
several clients are willing to sign a physician 18–24 months
before he or she completes training. Aday has seen hospitals
offer stipends to specialists as far as three years out, depending on community need.
Such an approach provides commitment and bonds the
candidate to the organization. “We know that candidates
will be heavily recruited during that final year of training,
and if they have signed a contract and are receiving a stipend, they are less likely to consider other opportunities,”
explains Murray, adding that because a salary stipend is a
less-frequently used incentive, it could provide a competitive
recruiting advantage to organizations that offer it.
But, warns Stone, in the recruitment business nothing is ever
certain. Paying the resident is no guarantee he or she will join a
particular practice or work for a particular health system.
Stone has seen a second organization come in, make a better
offer, and—as part of that offer—repay the first bonus. “It
can be very cutthroat in this competitive market,” he says. H
PCR sources
Bobbie Aday, senior partner, The Carlisle Group, Inc., 545 East John Carpenter
Freeway, Suite 620, Irving, TX 75062, 866/722-8957; www.tcgrec.com.
Kathy Murray, senior director of key accounts (physician search division), Cejka
Search, 4 CityPlace Drive, Suite 300, St. Louis, MO 63141, 800/678-7858; www.
cejkasearch.com.
Jim Stone, managing partner/cofounder, Medicus Partners, Inc., 14114 Dallas Parkway, Suite 600, Dallas, TX 75254, 972/759-0331, Ext. 225; www.
medicuspartners.com.
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4
Physician Compensation & Recruitment May 2009
© 2009 HCPro, Inc.
A HealthLeaders Media publication
AAMC survey of resident/fellow stipends and benefits
Resident/fellow stipends nationwide
Dollar and percent changes from prior year
Academic year 2008–2009
Percentiles
Year of training
N
Mean
25th
50th
75th
1st post-MD year
210
$46,245
$44,055
$45,659
$47,760
2nd post-MD year
213
48,092
45,720
47,257
48,764
3rd post-MD year
213
50,128
47,290
49,095
51,857
4th post-MD year
212
52,154
48,911
50,987
54,468
Current year stipends
5th post-MD year
199
54,164
50,606
52,956
56,451
6th post-MD year
182
56,463
52,746
55,265
59,282
7th post-MD year
152
58,520
54,147
57,027
62,520
8th post-MD year
85
60,278
55,266
59,108
63,825
Percent change from prior year1
1st post-MD year
171
3.5%
2.8%
3%
4%
2nd post-MD year
173
3.4
2.8
3
4
3rd post-MD year
173
3.4
2.6
3
4
4th post-MD year
172
3.5
2.5
3
4
5th post-MD year
160
3.2
2.5
3
4
6th post-MD year
143
3.3
2.5
3
4
7th post-MD year
119
3.5
2.5
3
4
8th post-MD year
63
3.3
2
3
4
Calculated for respondents reporting in both years.
Source: © 2008 Association of American Medical Colleges. All rights reserved. Reproduced with permission.
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May 2009 Physician Compensation & Recruitment
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A HealthLeaders Media publication
Demand, reform, productivity pay: ED docs poised for change
Emergency physicians, or emergency medicine physicians
(EMP), are in high demand—a demand that may grow
stronger as more Americans lose their jobs and healthcare
coverage.
Compensation is growing (although not dramatically), but
challenges abound, including inadequate reimbursements and
obstacles in equitably incorporating productivity standards.
In the current economy, even the traditionally peripatetic
emergency physicians are reluctant to leave their current
positions, thereby enhancing retention, but also impairing
recruitment.
Meanwhile, the strain on EDs grows.
Putting it in context
According to Centers for Disease Control (CDC) data
released in August 2008 (National Hospital Ambulatory Medical Care
Survey: 2006 Emergency Department Summary), 11% of ambulatory
medical care visits in the United States occur in the ED, but
emergency physicians represent only 3.3% of active physicians.
ED visits hit a record high of 119.2 million in 2006, up
from 115 million in 2005. From 1996 to 2006, the number
of emergency patient visits rose 32%. During that decade,
the overall ED use rate increased by 18.4%—from 34.2 to
40.5 visits per 100 people. Meanwhile, the number of hospital EDs decreased 6.7%, from 4,109 to 3,833.
Reimbursement challenges
Unlike many other specialties, the number of patients
treated doesn’t necessarily translate into profit in
emergency medicine. In fact, the reverse is often true:
Overcrowding can impair productivity, especially when
much of the crowd consists of Medicaid or uninsured
patients who cannot afford to pay.
Additionally, EDs have a federal mandate—the
Emergency Medical Treatment and Active Labor Act of
1986—to medically screen and stabilize all patients,
regardless of their ability to pay. Accordingly, emergency
physicians typically provide more uncompensated services
Emergency physician median compensation trends
Compensation survey
AMGA Medical Group Compensation
2008 report
2007 report
2006 report
2005 report
% change
% change
median
median
median
median
2007–08
2005–08
$256,879
$255,530
$248,721
$230,930
0.53%
11.24%
$256,800
$250,030
$243,449
$221,679
2.71%
15.84%
$203,500
$197,600
$190,544
$177,678
2.99%
14.53%
$230,000
$225,269
$216,674
$213,586
2.10%
7.68%
and Financial Survey
MGMA Physician Compensation and
Production Survey
HCS Physician Salary Survey Report
(salary only)
Sullivan, Cotter and Associates
Physician Compensation and
Productivity Survey
Survey results are based on the previous year’s data.
Source: Data excerpted from American Medical Group Association, Hospital & Healthcare Compensation Service, Medical Group
Management Association, and Sullivan, Cotter and Associates compensation surveys. Reprinted with permission.
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Physician Compensation & Recruitment May 2009
© 2009 HCPro, Inc.
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than other physician specialties. A 2000 AMA survey estimates that to be, on average, $138,000 per year, explains
David McKenzie, CAE, director of reimbursement at the
American College of Emergency Physicians (ACEP).
The CDC report found that private insurance covered
39.7% of all ED visits. Medicaid or the State Children’s
Health Insurance Program (S-CHIP) accounted for 25.5%
and Medicare for 17.3%. The uninsured (which includes
self-pay) represented 17.4% of visits.
The recession has exacerbated a dire situation. “More and
more of the patients coming to the ED are often without
health insurance, and hospitals absorb a great deal of that
cost,” says Daniel Stern, president of Pittsburgh-based
Daniel Stern and Associates (DS&A).
McKenzie agrees, adding that not only do many state
Medicaid plans pay far less than the cost of providing treatment, but sometimes they have stopped paying completely
due to budget constraints.
Strong demand
The demand for emergency physicians is growing.
According to DS&A’s 2008 Emergency Physician Salary & Benefit
Survey, 72% of survey respondents (hospitals and EMP
groups) reported that their hospital’s ED had added physicians in the past year (this compares to 70% in the 2007
survey); 66% (versus 61.5% in the previous survey) had
plans to add EMPs in the following year. DS&A, a search
and recruitment firm for emergency medicine, has produced
a compensation and benefits survey for 22 years.
efforts can also provide a small increase in Medicare payments.
The fact that EDs must be staffed continuously can also
affect compensation if a physician is left working undesirable
shifts, McKenzie explains.
Compensation trends
Compared with other specialists, the pay for emergency
physicians is low. According to the MGMA 2008 Physician
Compensation and Production Survey, the overall median compensation for EMPs is $256,800.
That represents a 2.71% increase over the prior year; primary care saw a 6.3% jump, whereas specialists overall saw a
3.61% hike.
Compared to primary care physicians, emergency physicians
are doing well. Median compensation for all primary care physicians was $183,322, according to MGMA (see “Emergency
physician median compensation trends” on p. 6 and “Total
compensation” on p. 10 for more on compensation trends).
“EM physicians are still compensated much better than
primary care physicians, who also put in very long hours—
and have a ton of paperwork to do,” says Catherine Stearns,
vice president at DS&A.
Compensation structure
Compensation drivers
The major compensation drivers are training, tenure,
geographic location, and practice model, McKenzie says.
Moreover, there are frequently structural differences between
fee-for-service groups, hospital-employed groups, and
employees of contract management firms.
But compensation for EMPs isn’t really comparable to
other specialties. Although reimbursement always plays some
role in compensation, it’s a particularly important one in emergency medicine—especially in terms of uncompensated care.
Recent increases in RVUs assigned to emergency medicine
have helped boost EMP compensation somewhat, McKenzie
says. Meeting Physician Quality Reporting Initiative (PQRI)
Hourly rate arrangements are more common in emergency
medicine than in other specialties.
Nevertheless, during the past few years, there has been an
emerging trend toward productivity-based models. Many
more groups tie at least part of compensation to productivity—usually based on RVU generation, says McKenzie.
Some ED groups pay strictly on RVUs generated, but it is
unusual to have no adjustments for night shifts or pediatric
areas where the potential RVUs per hour generated are typically less, says McKenzie.
Many more groups base at least part of the physician’s
compensation on productivity. It can range from 10%–
100%, with the productivity bonus paid monthly or quarterly. Rewards based on meeting Medicare PQRI criteria are
also being introduced, McKenzie says.
It is important to tie quality to increased productivity for
continued group success, acknowledges McKenzie, but he
and Stern warn that productivity-based compensation must
continued on p. 8
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A HealthLeaders Media publication
ED docs
continued from p. 7
be handled carefully, given the unique nature of ED work.
For instance, EMPs who work nights with less volume may
be penalized under an RVU system.
What’s emerging is a complex combination of factors,
says Stearns. She’s seeing “a steady increase in the number of
[emergency] physicians with compensation based on various
bonus modalities—RVUs, patient satisfaction, etc.” (See
“ED staff compensation methods” below.)
In recruiting, location still dominates
Emergency physicians are being heavily recruited.
Emergency medicine was the ninth most requested specialty nationally, according to the 2007 Review of Physician
and CRNA Recruiting Incentives from Merritt Hawkins and
Associates. It was also the ninth most requested specialty in
the fourth quarter of 2008, according to Delta Physician
Placement’s Physician Recruiting Standard Q4 2008.
For all the differences between emergency physicians and
other physicians, some recruitment issues are quite similar.
Physicians, regardless of specialty, generally like urban areas
ED staff compensation methods
Hourly rate
74%
Annual salary
21%
Bonus plan (any type)
38%
RVUs generated
23%
Patients seen
10%
Fee-for-service
8%
Collections received
7%
Productivity
23%
Patient satisfaction
17%
Net profits
12%
Profit sharing plan
20%
Stipends
14%
Source: Daniel Stern and Associates’ 2008 Emergency
Physician Salary & Benefit Survey; used with permission.
and sunshine, says Stern. It is more difficult to recruit physicians to rural areas.
Overall, the DS&A survey found that California (which has
been at the top of the list for five consecutive years) and Florida
are the most attractive states. Colorado came in third, followed
by Texas, North Carolina, Arizona, and Hawaii.
The least popular are the “rust belt” states, especially
Michigan and Indiana, plus parts of Pennsylvania and Ohio,
says Stearns.
As the economy changes, Stern anticipates the next survey
will find that once highly popular places may be less so. But not
everything will change. “You can’t replace sunshine,” he says.
Other key factors in recruiting include competitive compensation packages, incentive programs, and—perhaps more
so than in other specialties—a flexible practice structure.
EMPs are driven by the excitement of the job. “They have
surgical personalities and want to see a problem, fix it, and
move on to the next problem,” says Stern. They also like
knowing their schedule and having plenty of time off—with
no call, he adds.
There’s a higher turnover rate in emergency medicine than
in other specialties, Stern says. Many EMPs are employed,
without any investment into the group other than providing
their time and labor, so they are free to move on when their
contracts expire. (Emergency physicians are also subject to
burnout; see “Morale remains an issue” on p. 9.)
With the current economic crisis, emergency physicians,
like other doctors, are reluctant to leave their current situations, Stern and Stearns say. It’s become easier for hospitals
to retain physicians than it used to be.
More locums
McKenzie also reports an increase in the use of locum tenens in the ED (for more on locums, see the February PCR).
Military service is one reason for the growth. “The nature of
their practice makes EMPs a good fit for treating casualties of
war, and many are in the National Guard,” McKenzie says.
Stern, too, is seeing an increase. One factor may be the traditionally high turnover. If emergency physicians give short
notice, often the only way to replace them is with a locums
physician. “Recruiting a replacement can take months, sometimes as long as one year,” he adds.
Stern also points to another factor: the shortage of physicians
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Physician Compensation & Recruitment May 2009
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trained in emergency medicine. This could alter just who is
working in the ED, he says.
Internists as EMPs?
With the crushing demand on EDs, there’s some talk of
letting family practice and internal medicine physicians work
in them, says Stern. But even the principals at DS&A disagree on this.
Stern sees a trend of greater flexibility in the ED—a flexibility that will allow family practitioners and internists to
work there at lower compensation. The problem is that there
simply aren’t enough board-certified EMPs to go around, he
says. It could lead to a two-tier compensation system.
Stearns doesn’t think it will come to that. In the past,
it may have been different, but today, everyone expects an
emergency physician to have an emergency medicine residency, she says.
Looking ahead: Reform
Healthcare reform is another issue looming for emergency
physicians. ACEP is monitoring two proposals. One is a
Medicare demonstration project that bundles all services
(professional and facility) into one payment made to the
hospital. “Such a plan aimed at cost savings will almost
certainly reduce physician compensation and could make it
more difficult to attract physicians of all specialties to practice in the hospital setting,” says McKenzie. The other is the
expansion of healthcare coverage in a way that approximates
universal coverage. “Although full 100% coverage in the
U.S. may be difficult, to the extent that currently uninsured
patients eventually have some form of insurance, the general collections should be higher. The typical ED physician
receives payment for about 9% of the services provided to
patients lacking insurance,” says McKenzie.
With universal coverage, the number of visits to the ED
will significantly decline, says Stern. “The patients that are
left over will all be paying patients, so the impact on income
may be neutral.” If anything, compensation could rise due to
enhanced efficiency. But much depends on the details of the
plan—and how those details are executed. Still, he warns,
moving nonemergency cases out of the ED may lead to another
problem: “A severe shortage of primary care physicians to handle the patient load, once all people have access to that kind of
care, will be a problem for many years.” H
PCR sources
David McKenzie, director of reimbursement, American College of Emergency
Physicians, P.O. Box 619911, Dallas, TX 75261-9911, 800/798-1822.
Catherine Stearns, vice president, Daniel Stern and Associates, Duff Office Center, 10
Duff Road, Suite 215, Pittsburgh, PA 15235, 800/438-2476; stearnsc@danielstern.
com.
Daniel Stern, president, Daniel Stern and Associates, Duff Office Center, 10 Duff
Road, Suite 215, Pittsburgh, PA 15235, 800/438-2476; [email protected].
Morale remains an issue
Emergency medicine physicians (EMP) are frustrated and
Further compounding their frustration is the sense that they
demoralized. Roughly one-third (32.1%) of those surveyed
are not getting any support, adds Catherine Stearns, vice presi-
had at least one component of burnout, according to a study
dent at DS&A.
released February in Annals of Emergency Medicine.
EMPs don’t feel they are getting support from special-
1
That study dovetails with some of the findings from Daniel
ists and, meanwhile, primary care physicians are telling their
Stern and Associates (DS&A) 2008 Trends, Predictions and
patients to go to the ED. Moreover, the survey found 46% of
Perceptions of Emergency Medicine Physicians which shows
EMPs do not feel the hospital administration or board of direc-
that EMPs are frustrated, demoralized, and pessimistic.
tors provides support.
DS&A president Daniel Stern notes that the results are not out
of line with other physician surveys. However, Stern says EMPs
“They feel like they are holding up the ceiling while everything is falling around them,” Stearns says.
face additional pressures, including overcrowded EDs, inadequate
hospital beds, and angry patients who have waited hours for ser-
1
“Tolerance for Uncertainty, Burnout and Satisfaction With
vice. And they don’t expect the situation to get better—99% indi-
the Career of Emergency Medicine,” Annals of Emergency
cated they felt things would get worse in the next five years.
Medicine, February 5, 2009.
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May 2009 Physician Compensation & Recruitment
9
A HealthLeaders Media publication
Total compensation (50th percentile) emergency physicians
Total
comp.
50th
percentile
National
Northeast
Southeast
N. Central
S. Central
West
2004
2005
219,015
220,980
200,736
209,027
222,018
228,548
230,270
234,675
241,844
221,170
Staff employee
224,116
217,052
2006
2007
2008
235,151
240,000
250,000 I
216,271
220,000
242,000 I
254,686
250,000
250,000 S
252,054
240,000
255,000 I
209,898
259,350
264,467 I
234,366
254,500
268,000 I
2004
250,808
233,091
260,143
240,109
257,164
Staff partner
257,802
2005
261,572
250,263
246,617
264,535
255,992
276,158
2006
2007
2008
274,444
288,500
302,000 I
261,401
285,000
254,114 D
274,805
310,000
312,500 I
257,900
305,000
320,000 I
267,908
249,500
298,000 I
286,819
257,678
302,000 I
Staff independent contractor
2004
2005
237,810
246,291
213,927
244,767
251,270
235,948
245,774
286,991
271,136
257,901
206,160
236,152
2006
2007
2008
249,905
260,000
255,500 D
241,813
191,000
n/a
249,310
275,000
n/a
231,036
257,400
222,570 D
264,033
256,000
267,500 I
254,309
257,678
271,000 I
2004
2005
2006
2007
2008
262,252
269,713
269,793
270,000
275,850 I
257,865
263,679
272,691
269,000
279,000 I
266,563
268,956
286,259
300,000
295,923 D
273,872
287,598
271,019
285,000
300,180 I
284,142
284,147
262,815
265,000
252,000 D
2004
2005
283,425
277,885
264,635
265,554
287,083
283,177
258,252
294,440
n/a
244,375
305,173
285,865
2006
2007
2008
306,528
300,000
315,000 I
246,778
276,500
294,000 I
360,533
325,000
350,000 I
305,508
321,741
300,000 D
n/a
280,000
315,000 I
302,855
400,000
288,492 D
2004
2005
272,818
295,755
n/a
297,800
255,008
303,462
230,037
286,237
290,071
265,622
312,571
323,971
2006
2007
2008
312,835
260,000
300,000 I
353,571
308,000
n/a
322,765
296,000
300,000 I
n/a
273,000
n/a
269,177
n/a
n/a
320,000
n/a
228,944 I
ED director employee
222,728
240,231
240,111
255,460
230,000 D
ED director partner
ED director independent contractor
I = increase from last year. D = decrease from last year. S = stayed the same as last year.
Source: Daniel Stern and Associates’ 2008 Emergency Physician Salary & Benefit Survey.
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Physician Compensation & Recruitment May 2009
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Assisting physician candidates with housing: What to consider
by Phillip Miller
Throughout the latter part of 2008, Merritt Hawkins &
Associates began receiving questions from clients regarding a
hospital’s ability to offer physician candidates housing assistance, often in the form of providing a housing allowance at
the new location or paying off the mortgage on the physician’s existing home.
Merritt Hawkins & Associates is a physician recruiting
firm and does not offer legal advice. However, we have for
many years followed matters relating to federal physician
recruiting laws and regulations under the physician selfreferral (Stark Law), anti-kickback (HHS), and inurement
(IRS) statutes. We frequently consult with attorneys on
these matters and, when appropriate, relay the opinions of
attorneys to clients or others requesting information. In
reviewing housing assistance questions with an attorney,
several points come to light.
The first is that neither the physician-recruitment exception under the Stark Law nor the safe harbor under the
anti-kickback law expressly states that the offer of housing
assistance is either permissible or prohibited. With some
exceptions, the referral laws do not discuss specific incentives. Instead, the Stark Law mandates that the incentives
offered to a physician be the minimum necessary to induce
the physician to relocate to a hospital’s service area. With
respect to the anti-kickback law, the OIG has written that
recruiting incentives should be narrowly tailored so that
they do not exceed what is reasonably necessary.
Given these requirements, a hospital would have to demonstrate that the offer of housing assistance, in conjunction
with all other incentives offered to the physician, was reasonably necessary to induce the physician to relocate to the
hospital’s service area. For example, if a hospital is located
in an area that has had difficulty recruiting physicians with
traditional incentives (such as income guarantees), the OIG
might conclude that the offer of housing assistance is reasonably necessary.
The physician recruit’s specific situation should also be
considered. For example, it may be advisable for a hospital to offer housing assistance only to physicians who can
demonstrate specific difficulty with respect to their current
housing situation. Finally, the assistance itself must be reasonable. If a housing allowance is offered, the duration and
amount must be reasonable. If the mortgage is paid off, the
hospital should take an ownership interest in the home.
Based on this analysis, the following are some general rules:
»» Under certain circumstances, a hospital may assist a physician recruit with housing by providing a housing allowance or by paying off the mortgage on the physician’s
existing home.
»» The level of assistance may vary depending on how challenging it is to recruit to the hospital’s service area. The
more historically challenging it is to recruit to the hospital’s service area, the greater latitude the hospital will have
in providing physician recruits with housing assistance.
»» The assistance must be reasonable. Although “reasonable”
is not defined, common sense rules apply. For example, if
there is a gap between what the physician owes on a home
and what he or she can sell it for, the hospital may pay
this gap if it is reasonable. Several hundred thousand dollars is unlikely to be deemed reasonable by the OIG, but a
lesser sum may be. If the hospital pays off the physician’s
home, it then owns the home, which could raise logistical
difficulties for the hospital. It may be more practical to
pay the physician a housing allowance in the new location.
The allowance should be based on the type of housing the
physician might be able to afford within the community.
»» Whether housing assistance may be offered depends upon
the housing market in the community from which the
physician is relocating.
»» The overall incentive package should be structured so that
salaries and income guarantees, along with other incentives, are not above and beyond what physicians in the
specialty being recruited typically earn.
Each recruiting situation is different, and hospitals are
advised to have their physician recruiting contracts reviewed
by attorneys competent in this area of the law. H
Editor’s note: Miller is vice president of communications at Merritt
Hawkins & Associates, a national physician search and consulting firm
and an AMN Healthcare company. He can be reached at pmiller@
mhagroup.com.
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© 2009 HCPro, Inc.
May 2009 Physician Compensation & Recruitment
11
A HealthLeaders Media publication
Ask the experts
Experts offer insights, predictions on reform
Editor’s note: PCR asked our experts, “As the administration takes
up healthcare reform, which compensation-related issues should readers be
monitoring?” Some responses are below; others will run in June. Send your
questions to [email protected].
Fredrick T. Horton, president and CEO, Horton, Smith
& Associates
»» Effect of legislation related to physician ownership. This
will include the regulations and prohibitions of physician
ownership as well as changes in payment policy for services provided in and by physician-owned ancillary services.
I would include the full gamut of services, from in-office
labs all the way to physician-owned hospitals.
»» Funding for additional training programs (e.g., medical
schools and residencies).
»» Dollars for underserved areas.
»» Effect on demand for services (e.g., an increase in the number
covered through a Medicare-type program). Universal care
would significantly affect the demand for additional physicians. The question remains: Will we have enough physicians,
and enough money, to provide care?
»» Any add-on expenses created by legislative action—for
example, a mandate for EMR implementation. Closely
related would be payment reductions for those not moving to the “required” environment. In other words, if a
physician does not utilize an EMR, what will happen to
his or her reimbursement? This would also include additional costs of paperwork or staffing necessary to meet
new requirements.
Editorial Board
Marc Bowles, CPC-PRC,
CMSR, FMSD
Chief Marketing Officer
Group Publisher: Matt Cann
The Delta Companies
Irving, TX
Executive Editor: Rick Johnson
Editor: Roxanna Guilford-Blake
[email protected]
James W. Lord
Principal
ECG Management
Consultants, Inc.
St. Louis, MO
David A. McKenzie, CAE
Reimbursement Director
American College of
Emergency Physicians
Dallas, TX
These comments relate primarily to activity at the national
Medicare level. But our healthcare marketplace has a history
of taking requirements or payment policies that originate
there and applying them to other payers and the marketplace
overall. Therefore, changes at the national level will likely
have a far greater reach and effect.
James W. Lord, principal, ECG Management
Consultants
The administration’s focus on healthcare reform could lead
to a substantial reordering of incentives for physicians. The
past decade has focused primarily on increasing productivity, and thus, the amount of care that is being delivered by
the physician. The new administration is focusing on creating
value, which could be defined as “providing the appropriate
care in the most efficient manner.” This is not new thinking,
but it may be more appropriate today, given what is beginning
to be known as “the great recession.”
This time around, don’t expect to hear words like “capitation” and “gatekeeper”; rather, expect to hear “bundled payments” and “medical home.” Regardless of the semantics,
dramatic shifts in the payment system will have a significant
effect on how groups operate, and thus, how they pay their physicians. It will also have a significant effect on relationships
between physicians and hospitals—most likely leading to continuing increases in the consolidation and creation of large
group practices affiliated with healthcare systems—since it will
require both hospital and physicians to work together to create
the best outcomes with the most appropriate use of resources. H
Kim Mobley
Principal
Sullivan, Cotter and
Associates, Inc.
Detroit, MI
Max Reiboldt, CPA
President
and CEO
The Coker Group
Alpharetta, GA
Ron Seifert
Senior Healthcare
Consultant
Hay Group, Inc.
Philadelphia, PA
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