Hiring trend a 2-way street for doctors and hospitals

A staffing company says 56% of its physician search assignments are for hospital-employed physicians -- up more than double the 23% rate from five years ago.

That number reflects not only physicians' desire for a more stable practice and compensation environment, but also hospitals' desire to align more closely with physicians because of health reform and looming physician shortages.

Merritt Hawkins & Associates said in a report released in June that the percentage of physician search assignments for hospital employment went up five percentage points from 51% in the previous 12-month cycle. Merritt's 2011 survey measured placements between April 1, 2010, and March 31, 2011 (link).

Merritt Hawkins said salaries have replaced income guarantees almost entirely as a tool to recruit physicians. Overall, 9% of physician search assignments in 2010-11 featured income guarantees, down from 21% in 2006-07 and 41% in 2003-04. The company interprets that decline as a sign of growing employment arrangements for physicians, with income guarantees usually an enticement to join a private practice in which a doctor would become a partner.

"Physicians are seeking the stability of employment, while hospitals are seeking to align with physicians in response to health care reform, which is promoting the use of accountable care organizations, bundled payments and other physician-aligned and integrated delivery mechanisms," the company wrote in a statement accompanying its survey.

Another report in June, by consulting firm Deloitte, pointed out that the Patient Protection and Affordable Care Act is a major factor in pushing physicians and hospitals into closer alignment, including a growing number of physicians choosing hospital employment over private practice. The survey is available on Deloitte's website (link).

Deloitte said increasing costs, decreasing payment from insurers and a need for greater capital expenditures to install information technology have pushed physicians toward hospitals. For hospitals, the need for greater care coordination and better quality, in part to earn quality-based bonuses, is a major factor in the desire to employ doctors.

However, Deloitte noted that hospitals are trying to lock up physicians as their overall numbers grow smaller and demand for their services goes up.

"Physician shortages in certain specialties may be heightening hospital executives' desire for employment arrangements rather than contracted or voluntary agreements to determine specific clinical care services are not at risk," according to the Deloitte report, which cites studies showing an Assn. of American Medical Colleges estimate of a shortfall of up to 159,000 physicians in the next 15 years.

The Deloitte report said hospitals are focusing first on specialists but added that they increasingly will go after primary care physicians as their numbers grow smaller and as aging baby boomers more often seek their services.

The Merritt Hawkins report said some of this transition already is happening, though not necessarily because of physician-shortage fears.

For the sixth consecutive year, family physicians and internists led the company's placements, though that also includes private practice. However, hospital-based specialists who were once in high demand are less so today.

In large part because of payment cuts and declines in elective procedures, radiologists, cardiologists and anesthesiologists were the firm's 17th, 18th and 19th most-requested assignments in 2010-11. Until recently, those specialties had been among Merritt Hawkins' most-requested assignments.

In another sign of the economic times -- namely, the difficulty in selling a house -- a small but growing number of physicians are getting housing allowances as enticements. Merritt Hawkins said 6% of physician recruiting assignments included housing allowances, up from less than 1% in previous years.