Hospital hiring of physicians picks up steam

Health systems also are looking at how to hold onto their existing doctors as competition for their services heats up.

By — Posted Jan. 30, 2012

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The only reason a physician wouldn't be able to find a hospital job, it appears, is because he or she isn't looking for one.

Hospitals increased their physician hiring in 2011, and hospital employment of doctors shows no signs of slowing in 2012, with doctor hiring becoming a major strategy for hospitals getting ready for health system reform. Meanwhile, physicians already on staff may find hospitals providing financial and other incentives to keep them on board.

"We have a work force shortage," said Alan Kaplan, MD, vice president with Iowa Health System and president of Iowa Health Physicians and Clinics, based in Des Moines. "We would look at any physician seeking employment. I'm not saying we would want to employ all specialties, but we would look at them."

Three-quarters of health care organizations surveyed by Sullivan, Cotter and Associates said they increased physician staffing levels in 2011, adding an average of 12 specialists and nine primary care physicians. Three-quarters said they planned to hire more physicians and midlevel practitioners in 2012, according to the survey, released Jan. 10.

The number of physicians and dentists employed full time by community hospitals went up from 62,152 in 1998 to 91,282 in 2010, with growth markedly accelerating as of 2005, according to statistics released Jan. 6 by the American Hospital Assn. The number of physicians and dentists employed part time grew from 15,837 in 1998 to 24,139 in 2010.

The community hospital category includes all nongovernmental short-term general and specialty facilities whose services are available to the public. These numbers are considered an indicator of increased hospital employment of physicians because, although dentists are included, hospitals employ only a few of these professionals.

Previously, a perspective piece in the May 12, 2011, New England Journal of Medicine said more than half of practicing physicians were employed by hospitals or integrated delivery systems.

Sullivan Cotter has been surveying health care organizations about physician compensation and productivity for 19 years. Questions about hiring plans were added to the most recent survey when researchers noticed that physician employment was becoming more common.

"From the hospital side, we are all anticipating significant growth in employment of physicians," said Dr. Kaplan, past president of the American College of Physician Executives. "Independents are now seeking employment. Most of the residents coming out of training are looking for employment. I suspect that health care reform, the need for integrated delivery systems, the uncertainty of the payment environment and the need to manage populations will further fuel the growth in employment."

Big interest on both sides

An Aug. 18, 2011, issue brief from the Center for Studying Health System Change analyzing interviews with 550 hospital executives found that hospitals were hiring physicians to build referral bases and shore up admissions. Flat third-party pay rates, increased practice costs and a desire for work-life balance led more physicians to seek hospital employment.

Other analysts have said hospitals are interested in hiring physicians because of changes expected under the Patient Protection and Affordable Care Act, including the formation of accountable care organizations and the likelihood of more risk-based payment systems.

Although job opportunities are expected to be plentiful, not every physician can walk into every hospital and find employment.

Merritt Hawkins & Associates, a physician recruiter in Irving, Texas, released the 2011 Review of Physician Recruiting Incentives on June 13, 2011. The review reported that demand was growing for family physicians, internists and psychiatrists.

A survey of 1,072 doctors released Dec. 6, 2011, by the Medicus Firm, a physician recruiter in Dallas and Atlanta, found that those more than 16 years out of residency had fewer job offers than those just finishing training. Researchers suspected this was in part because some institutions have some hesitancy about hiring older physicians, but that there may be some positions senior physicians are not interested in.

Kim Mobley, Sullivan Cotter's physician compensation practice leader, said many institutions are looking for physicians with leadership or management skills.

Still, analysts said, the issue isn't whether a physician can find a hospital job. The issue is whether it's the specific hospital in the specific location doing the tasks at the times the physician desires.

Sullivan Cotter's survey noted that hospitals and health systems are taking more steps to increase physician retention. This may take the form of bonuses, on-call pay and retirement funds, as well as strategies to avoid burnout. For example, Iowa Health Physicians and Clinics is setting up a work force committee to focus on physician satisfaction.

"Most marriages don't break up during the honeymoon phase, and we're going to see if hospitals can really hold on to these physicians," said Travis Singleton, senior vice president at Merritt Hawkins.

Other trends include basing a higher percentage of compensation on quality metrics. About 74% of those surveyed by Sullivan Cotter in 2011 based a percentage of physician pay on patient satisfaction, and 72% pegged it to quality. The proportion of a physician's compensation connected to these metrics also increased. Previous Sullivan Cotter surveys indicated that quality-of-care measures and patient satisfaction played a role in 3% to 5% of physician compensation. The consultancy's most recent survey found that those measures had gone up to 7% to 10% in 2011.

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More and more doctors employed by hospitals

View in PDF

Click to see data in PDF.

Physician hiring at hospitals has shot up in recent years. Although an American Hospital Assn. survey includes dentists in the hiring category, few are employed by the community hospitals surveyed.

Year Full time Part time Total
1998 62,152 15,837 77,989
1999 62,570 17,484 80,054
2000 62,697 16,633 79,330
2001 61,972 16,734 78,706
2002 63,845 17,939 81,784
2003 61,956 18,752 80,708
2004 64,392 19,514 83,906
2005 67,792 20,592 88,384
2006 71,277 21,943 93,220
2007 76,785 23,875 100,660
2008 83,495 23,850 107,345
2009 85,634 26,412 112,046
2010 91,282 24,139 115,421

Source: Health Forum, American Hospital Assn. annual survey of hospitals

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External links

2011 Review of Physician Recruiting Incentives, Merritt Hawkins & Associates (link)

Annotated Model Physician-Hospital Employment Agreement, 2011 edition, American Medical Association. Free to members; available to non-members for a fee. (link)

"Hospitals' Race to Employ Physicians -- the Logic behind a Money-Losing Proposition," The New England Journal of Medicine, May 12, 2011 (link)

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