Hospitals behind physician recruiting for not-so-solo practices

Health care facilities are more active recruiters than private practices, paying search firms to find doctors for environments that resemble small practices.

By — Posted July 23, 2012

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Recent surveys on physician recruitment find hospitals to be far more active than medical groups — especially small ones — in using search firms to find doctors. The hospitals looking for doctors often employ them in settings that, on the surface, look a lot like the offices of solo or small practices.

An analysis, released July 2, of assignments handled by Merritt Hawkins & Associates, the largest physician search firm in the U.S. found hospital requests grew to 63% of all placements in 2011-12 from 11% in 2003-04. However, many of those requested positions were for solo or small practices owned by the hospital, or for a practice where the hospital would place a physician in its employ.

By contrast, searches the Irving, Texas-based firm conducted at the request of physician-owned solo practices declined to 1% from 20% during the same period. Assignments for equity partnerships went down to 8% in 2011-12 from 22% in 2003-04.

This follows a report issued March 22 by Arthur Marshall, another physician search firm in Irving, that said its proportion of assignments involving hospital employment grew to 72% in 2011 from 59% in 2008. The percentage of physicians available to work solo or in partnership dropped to zero in 2011 from 9% in 2008.

“Nobody wants to be Marcus Welby anymore, practice alone or with a partner,” said James Merritt, founder of Merritt Hawkins, referring to “Marcus Welby, MD,” a popular CBS television show that ran from 1969 to 1976. The program is often referenced as an iconic portrayal of an independent primary care physician providing quality care in and out of the office without a worry about money. However, the reference might be lost — culturally and professionally — on younger doctors.

A survey of 2,582 physicians released June 12 by The Medicus Firm, a search agency with offices in Atlanta and Dallas, found that only 6% of physicians in training and 10% in practice in 2012 wanted to work solo. Interest in hospital employment was highest among physicians in training, with 29% saying this is the most appealing setting. Twenty-four percent of in-practice physicians agreed. Usually, doctors cite regular salaries and hours and a desire for work-life balance as reasons for working in an employed situation.

However, hospital employment doesn’t necessarily mean working in a hospital. Solo practice still exists, but in an age of health system consolidation, increasing regulatory burdens, changes in the care delivery system and differences in the priorities of young physicians, it has shifted from a model dominated by what were essentially small businesses to those that have stronger links and may be owned by a large health system. These institutions need solo practices to maintain care in their communities, but employing physicians directly is an attractive feature.

“Most of the candidates are residents coming out of training,” said Calen Bowshier, manager of medical staff recruitment with Kettering Health Network, a hospital system based in Dayton, Ohio. “Only 10% or 20% will even consider joining a practice that doesn’t involve an employment model.

“We typically recruit a physician for an employed solo position for one of two reasons. One: An existing physician in that location has retired, will be retiring, or left the practice for one reason or another and there is a vacancy. In the interim, these practices are covered by locum tenens physicians, which can be quite costly. Two: It has been determined that the particular community is in need of a physician.”

Kettering helps independent solo physicians recruit, but if that is not possible it will consider buying the practice and creating an employed position to make the setting more appealing.

“That’s always a possibility for the physicians who are open to it,” Bowshier said.

More hospitals are looking for tighter connections with physicians to form accountable care organizations and participate in other aspects of health system reform. This frequently means an employment arrangement.

“The reason hospitals are offering fewer solo opportunities is because doctors don’t want them,” said Jim Stone, president of The Medicus Firm and president-elect of the National Assn. of Physician Recruiters. “They are in some ways responding to the market. The other thing driving this trend is the need to obtain physician alignment in anticipation of changes in the ways they’re compensated.”

Physician recruiters say many young doctors are hampered by significant education debt, which makes stable financial opportunities more attractive. Declining pay and the increased cost of running a practice make going solo financially challenging. In addition, work-life balance is a higher priority than in previous generations.

“The physician has to be fairly insistent on going solo, because at this point there are too many challenges facing the independent doc,” said Travis Singleton, senior vice president at Merritt Hawkins. “The deck is stacked against them. They have to either really disagree with the hospital’s management policies or fear the lack of autonomy to stick with solo.”

Hospitals are selling the idea that working as an employed physician in a solo setting is attractive for someone who is looking to work independently without the risk of operating a practice.

“Bringing a solo physician in and employing them is an attempt to make the practice more attractive to an incoming physician who doesn’t want to deal with billing and collections and hiring, but wants to manage their own schedule,” Stone said. “It does allow some autonomy.”

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Who’s recruiting physicians?

Changes in the health system and the priorities of younger physicians mean recruitment for solo practices has slowed to a trickle, but hospital interest has picked up with many positions in locations outside the hospital. Merritt Hawkins & Associates, a physician search firm in Irving, Texas, breaks down assignments by practice setting. Periods generally run from April 1 to March 31 of the following year.

Year Hospital setting Group practice Solo practice Partnership
2011-12 63% 16% 1% 8%
2009-10 51% 24% 4% 12%
2007-08 45% 37% 5% 7%
2005-06 23% 40% 17% 16%
2003-04 11% 42% 20% 22%

Source: “2012 Review of Physician Recruiting Incentives,” Merritt Hawkins (link)

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External links

“Physician Recruiting Incentives 2012 review,” Arthur Marshall, summary, March 22 (link)

“2012 Physician Compensation & Practice Survey,” The Medicus Firm, summary, June 12 (link)

“2012 Review of Physician Recruiting Incentives,” Merritt Hawkins & Associates, preview (link)

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