One in five hospitals has stopped paying physicians signing bonuses as a recruitment incentive, primarily because of the legal risk to the hospitals.
That is one of the key findings of the fourth annual hospital physician recruitment survey conducted for MODERN HEALTHCARE by Cejka & Co., a St. Louis-based physician recruitment company.
Some 431 hospitals responded to this year's survey, which was conducted in May. That's down slightly from last year's total of 444 (Sept. 12, 1994, p. 49).
Like the previous surveys, most of the hospital respondents to this year's poll were mid-sized, not-for-profit hospitals. More than 25% of the hospitals staffed between 151 and 250 beds, and 74% were not-for-profit facilities.
However, a greater number of respondents in this year's survey were located in rural areas. This year, 42% of the hospitals were rural facilities, compared with 32% in last year's survey.
Of the hospitals that responded to this year's survey, 86.5% said they were actively recruiting physicians in 1995, down slightly from last year's 91%.
The most sought-after physicians continue to be those in the primary-care specialties. For example, 73.5% of the hospitals were looking for family practitioners, while another 53.1% were after internists (See chart).
In least demand were oncologists, neurosurgeons and anesthesiologists. They were being recruited this year by 6%, 7.4% and 7.4% of the hospitals, respectively, the survey found.
Like the last two surveys, this year's hospital physician recruitment poll detected changes in hospital recruitment practices because of legal fears. But this year's survey detected a heightened level of fear as well as a greater level of discontinuance of some controversial recruitment practices.
Specifically, the survey uncovered the impact of last fall's tax settlement between Hermann Hospital in Houston and the Internal Revenue Service. The 618-bed, not-for-profit hospital agreed to pay a $1 million fine and adhere to a set of physician recruitment guidelines to resolve charges that it violated the conditions of its tax-exempt status by offering lucrative recruitment incentives to physicians (Oct. 24, 1994, p. 2). The questionable tactics included income guarantees, free office space and loans that didn't have to be repaid.
Although IRS officials insisted otherwise, healthcare tax experts generally regarded the recruitment guidelines in the settlement as industrywide standards the IRS wanted followed.
The IRS followed up the Hermann settlement earlier this year with a proposed revenue ruling on recruitment tactics (March 20, p. 3). Although the proposed ruling generally was regarded as more lenient than the Hermann settlement, it would carry the legal weight of tax regulation and can be cited as legal precedent in disputes with the IRS. The public comment period on the ruling ended last month, but the final version has yet to be issued.