Physician recruitment: Big lures for small practices

Larry Kipe, MD, a family physician in Craig, Colo., is starting to think about recruiting a new physician to what is about to become a solo practice.

One of his partners is retiring from the Moffat Family Clinic. Another is relocating for family reasons. And the practice, which he says is financially squeezed like many small ones across the country, is the last independent one in town.

"It's kind of hard to offer a package that somebody would actually like," Dr. Kipe said.

Many small practices looking to recruit another physician are finding it difficult. But experts say there are ways to make it easier when employment with a hospital or large institution is more popular than ever -- and even hospital jobs are tough to fill because there are not enough physicians to go around.

Small practices may need to figure out how to do some of the same things larger institutions do while playing up the advantages of their particular settings.

"It's difficult," said Tommy Bohannon, vice president of recruiting at Merritt Hawkins & Associates, a physician placement firm in Irving, Texas. "There is a certain subset of candidates who want to be in private practice, but there are a lot more who just want to be employed."

Recruiters say the key is to connect with physicians who most likely want to work in your area at your kind of practice. Having medical students and residents rotate through a practice is one way to make a connection. Dr Kipe is targeting two residents who completed rotations in his clinic and are thinking about returning.

Connections are possible through bigger entities, including state medical societies.

In 2010, the Iowa Medical Society launched the IMS Center for Physician Recruitment, a project to help members attract new doctors to the state. The project includes a website, booklets and videos to help members with recruiting.

Many physicians also end up practicing close to where they grew up or trained. The Iowa Medical Society has a database of doctors with a connection to the state that members can access.

"If you try to recruit somebody from all over the place with no ties to your state, you can waste a whole bunch of money," said Lawrence Hutchison, MD, president-elect of the IMS and a family physician in Dubuque. His four-physician practice has experienced a significant increase in patient volume and is considering adding a fifth partner.

Physician opportunities can be listed on various websites and on social media. Experts say, however, that networking is much more important to find not only physicians interested in working for a smaller practice, but also those who could be persuaded to do so.

"One approach is to target physicians at larger systems where there is a great deal of turmoil, political issues or change occurring," said Bob Collins, managing partner for the Medicus Firm, a physician recruitment company in Dallas. "These physicians will most likely feel burned out on the big-system politics and may be more open to considering a smaller practice where they will have more autonomy, more control and less politics to navigate on a daily basis."

Once a contact is made, a physician or other recruiter should play up the positive characteristics of a small practice. These can include more flexibility and independence and a significant connection with patients.

"We're so used to complaining about Medicare and malpractice and tort reform," Dr. Hutchison said. "We're so used to complaining about the bad parts. That's all people hear. In a small practice, you have much more autonomy. You have the ability to set your schedule and plan your vacations without going through 17 layers of bureaucracy. You can run your practice the way you want to."

But even those looking for more independence still want stability. Practices that appear stable are attractive to prospective recruits. Having updated technology and ensuring that various office systems run smoothly may be effective lures, experts said.

"Invest time and money in systems for the office that increase productivity without increasing the work that the physician does," Dr. Kipe said.

The compensation question

Consider how to structure and present the compensation package. For instance, many first-year salaries at small practices may be lower than those offered by hospitals or large multispecialty groups. But the numbers may play out differently over several years.

"Over 18 months, they may not make as much as at a hospital or large multispecialty practice, but they could make more in two or three years," Collins said. "If someone can see a path to something that is beyond what is being offered elsewhere, this can entice somebody to join a practice. Maybe year three, four or five will make up for it, and after five years, the compensation could be significantly improved over a strict salary and small productivity bonus."

How compensation is structured might need to be different based on a physician's career stage. Income guarantees are more popular among early-career physicians, according to the 2009 Physician Retention Survey released in March 2010 by Cejka Search, a health care executive and physician search firm in St. Louis, and the American Medical Group Management Assn.

Productivity bonuses and the possibility of becoming a partner or shareholder in the practice were more important to those at mid-career. Market-based compensation combined with flexible or part-time hours tended to be more popular among physicians later in their careers.

"If a physician has four or five more years, you do not have to worry about partnership," Bohannon said. "They may be more concerned about being in a comfortable environment and not want to be that involved in running a practice. But they can still be very valuable to a small private practice."

Compensation can be set by using benchmarking data from various medical societies or consulting firms.

The practice might want to entice physicians with lures beyond salary. Most practices offer health insurance, liability coverage and relocation allowances, but education loan forgiveness is popular with physicians at the beginning of their careers. This tends to be less important for older doctors and may be difficult for small practices to offer. Physicians in some areas of the country may be able to help new physicians access government programs to pay back school loans in medically underserved areas.

Small practices might want to think about how call is structured, which can be a significant lifestyle issue. Work-life balance is a common concern, although it is even more important among senior physicians, according to the Cejka and AMGA survey.

For instance, all the physicians in Craig, Colo., with the support of the hospital, share call, so the burden does not become too great.

"We will always support that," said George Rohrich, CEO of the Memorial Hospital in Craig. Dr. Kipe is chief of the medical staff at Memorial.

Experts suggest making practice buy-in as easy as possible. For instance, buying in to Dr. Kipe's practice takes about a year and a fairly modest sum of money.

"We usually keep them as associates for a year, just as a trial," Dr. Kipe said. "And the amount of money is not huge."

Being able to buy into a practice is particularly important to physicians at mid-career. An outside appraisal of hard assets or a percentage of receivables can establish the buy-in price. Goodwill should not be considered; hospitals no longer pay for this, and new physicians are unlikely to either.

"Have a clear path to partnership," said Vivian M. Luce, the regional director of Cejka. "It cannot be vague, and anything over three years is unattractive."

Hospitals can help

A hospital can assist in recruiting. Large institutions are more likely to have physician recruiters on staff -- something small practices usually lack. They commonly recruit for practices in the community as well as their institutions, because this is one of the many ways hospitals improve alignment with physicians. Practices interested in working with a hospital on recruitment should call its administration.

For instance, Dr. Kipe has regular meetings with Memorial Hospital's administration about community recruiting needs and sharing names of potential candidates. The institution is offering a $45,000 signing bonus for a physician to come to the community, either as part of any medical practice or as a hospital employee.

"In the end, what the community needs is another physician, and we have a better chance by presenting different opportunities," hospital CEO Rohrich said.

Memorial Hospital has listed positions with physician recruiters, and small practices might want to contract with a search firm. Costs can range from $20,000 to $30,000.

If a practice decides to work with a firm, experts recommend signing on with more than one. "It's pretty standard to have multiple people looking on your behalf," said Patrice Streicher, president-elect of the National Assn. of Physician Recruiters.

As for Dr. Kipe, he is working solo as he considers how and when to attract new physicians.

"I will for financial reasons have to be solo for a while at least to see whether the practice remains profitable before being able to hire," Dr. Kipe said. "Long term, I will want to hire more physicians."