During the next 12 months, cardiologist Joseph Blankenship hopes to increase his seven-physician group in Jackson, Tenn., to a multispecialty group of about 15 doctors with various clinic sites. Blankenship plans not only to recruit young physicians, as is traditional, but also experienced physicians, even current competitors from within the community.
To hold their own against large healthcare systems and to have bargaining power in contract negotiations with healthcare purchasers, many doctors in small groups are increasing their numbers. Like Blankenship, they have concluded multispecialty groups have more clout and bargaining power.
Recruiting is complicated in today's healthcare environment: Group leaders may have visions of what they ultimately want their practices to become, but when they first are recruiting, a vision may be all they have. In addition, today's recruit is often an experienced physician, and he or she may be more cautious than a younger doctor about making a commitment to a group. As a result, the biggest challenge for today's recruiters, experts say, is to convince older recruits to sign on. It doesn't help that some older recruits are none too happy about having to join a group; not long ago they could count on earning a good living practicing alone.
Also adding to the challenge is the task of presenting an uncertain future to potential recruits. It wasn't too long ago when recruits were invited into an environment that likely wouldn't change for as long as they practiced. Today, they are being asked to take a leap of faith.
"Recruits understand that a lot of these things are not set in stone, but show them that you have a plan and vision," Blankenship says. "You have to have a very good, strong, committed group of physicians and a strong business plan so they know where you're headed. If you have all of those things, (recruits will be) willing to work hard and make a commitment."
Statistics from the American Medical Association show about 19,500 group practices in the U.S. have three or more physicians. However, health systems and large group practices are gobbling up small groups at a rapid rate; the number of group practices with five or more physicians rose to 26% in 1996 from 20% in 1988, and the number of physician employees increased to 42% from 28% between 1988 and 1996.
Blankenship realized his small cardiology group needed to expand its patient base and referral area a few years ago. Though managed care is not yet a strong presence in the Jackson area, he knew it was coming and wanted to be prepared.
As president of CareSouth Multispecialty Clinic, Blankenship first added a pulmonologist, then several internists and now is in the process of merging with a primary-care group. Jackson is a city with a population of 50,000, but it is surrounded by several rural communities that would benefit from access to satellite clinics.
Similarly, the Greenville (Miss.) Clinic run by Ben Folk, M.D., is in a town of fewer than 50,000 people, but the county that surrounds it has about 70,000 people and about 210,000 people make up the entire referral area. Folk, also a cardiologist, was a solo practitioner until 1991 when he decided to form a small, multispecialty group and added an internist. Through a combination of small group mergers and recruitment, the clinic now houses eight physicians and is quickly outgrowing its 12,000-square-foot space.
Before Folk and Blankenship began to expand their practices, they took a close look at their respective communities and determined a multispecialty clinic would increase revenues and referral rates. That seemingly simple step is the most important aspect of physician recruitment, recruiters and physicians say.
"It's much too expensive to hire somebody at hundreds of thousands of dollars a year just to make your call easier," says internist Ira Davidoff, M.D., medical director of the 30-physician Bay Valley Medical Group in Hayward, Calif. "Recruitment has to be measured and properly capitalized. A 10-physician group probably should only consider recruiting for an additional person if they expect a retirement, or if they identify a niche in a specialty area that they think they will be able to fill." Davidoff also is president of the Alexandria, Va.-based American Medical Group Association, which represents 200 physician groups and about 45,000 physicians.
Bill Liss-Levinson, director of corporate development for Medical Directions, a New York City-based healthcare executive-search firm, warns that expansion just for the sake of expansion can be fatal. "If you don't know what you're doing, why you're doing it and where you intend to go, just sit still," he says. "Part of it is not indulging in fantasies about growing your business. When you start looking at what it is you'd like to do, then you have to look at the realities of what it will take. What are you willing to risk? You've got to ask those kinds of questions before you go ahead and bring someone else in."
Mark Smith, vice president of the Irving, Texas-based recruitment firm Merritt, Hawkins & Associates, agrees that recruitment can be expensive and may not be for every group. "I wouldn't make any investments that are going to require a long-term build-up," he says. "You don't want to burden the profitability of your organization."
If a group does commit to expanding its practice, it will face the difficult
task of selling itself to the potential recruit.
"You need to be totally honest with the candidate -- this is where we are, this is what we are considering doing," says veteran physician recruiter Mazie Blanks of the Atlanta-based recruitment firm Jackson & Coker. "People don't like surprises. I think you need to give them the whole picture. 'Here's what we know; here's what we don't know.' You need to give them a picture of the whole market so the doctor can make an assessment of what this practice is like today and what it will look like in the future."
If a group is in the midst of acquiring a practice, or being acquired for that matter, the recruit does not need to know the details, but it's in the hirer's own best interest to give the physician the broad outlines of the situation, says Susan Reynolds, M.D., a managing director in the Los Angeles office of the international recruitment firm Russell Reynolds Associates. For 12 years Reynolds was owner and director of the Malibu Emergency Room and Family Medical Center.
"Honesty is always the best thing. You don't have to tell who you're in merger discussions with, but you might indicate (a merger) is not outside the realm of possibility," she says. "If deals are going on, you don't have to share exactly what, but you probably want somebody to join your group who understands that situation and wants to be a part of that."
Kurt Frederick, M.D., is chief of the Department of Family Medicine at Austin (Texas) Regional Clinic. Frederick has brought on five physicians in the past 12 months and plans to bring on five more this year. The growth was facilitated, he says, by the clinic's plans to hire a financial and management partner. The 110-physician group recently entered exclusive negotiations with Seton Medical Center in Austin to provide management services.
"We really haven't had any trouble recruiting," when searching for a partner, he says. "The capital partner makes our future much stronger. Folks should be scared if we're not going to consolidate or if you don't have some power when you go to the negotiating table with a managed-care company or insurer."
Frederick's decision to sell the idea of security to potential hires is common practice among growing small groups.
"The pitch is that the healthcare environment is such that you're going to have to be part of a larger group or network in order to survive economically and be competitive from a negotiating standpoint," says Robert Templin, managing director of GT HealthSearch in Chadds Ford, Pa. "The groups that are going to survive are those that are planning for the future and understand what their role may or may not be."
Smith says: "The sale to a candidate should be one of long-term security and the issue of powers and numbers in negotiating. Tell them, 'To ensure your position will stay as it is or get better, we're going to merge your efforts with our previous competitor across town.' "
When the recruit is not a fresh-faced resident, but a peer or competitor, hirers should expect hard questions about contracts and future plans.
"The younger the physician, the less likely they'll ask specific questions about the future because of minimal exposure," Smith says. "The more seasoned physician, however, is typically looking for more security because they come with more (at stake). They'll ask, 'how do you intend to address (certain) market issues.' "
Gone are the days when a group can have a candidate in, take him or her to dinner and seal the deal, Jackson & Coker's Blanks says. "Doctors now want a lot more details, and the people interviewing the recruits have got to be prepared."
For help with the sometimes tricky search process, an increasing number of small groups are hiring search firms. Larry Stewart, president of search firm Weatherby Health Care in Norwalk, Conn., has seen a dramatic increase in small group searches in recent years. When one small group is looking to merge with another, the search becomes much more complicated than listing an opening in a specialty journal or interviewing residents, he says.
Blankenship, who worked with a recruitment firm, confirms that older physicians demand more answers. "They ask harder questions about the reality of accomplishing the business plan of the overall organization, and they have more questions about past experience dealing with payers," he says. "They are looking for the group's ability to position itself long-term and will want to see a business plan."
At the same time, he says, physicians who have been in practice are easier to negotiate with because they know the ropes. "They have a dose of reality," he says. "Newer physicians pass up a lot of opportunities based on some minor disagreement or question."
But after the preliminary hurdles have been cleared -- the recruit is convinced the group's vision is progressive and its business plan is solid -- the recruitment process begins to look familiar. Even in today's complicated marketplace, it ultimately comes down to finding a good fit, Templin says.
"When recruiting physicians, you're (hoping to) recruit someone who fits in with what you're trying to develop," he says. "The biggest problems with mergers come from differences in philosophy, goals, age, status, sometimes sex," he says. "It's just as important that you join with a competitor that has mutual goals as it is that you bring in a new face that has the same goals."