Richard Payne, M.D., gazed toward the future of his little Georgia city and liked what he saw.
A historic county seat with a gold-domed, hilltop courthouse, Cartersville, Ga., was a Civil War staging area for Sherman's march to Atlanta and the sea.
By the 1990s, Atlantans had marched back up the 35 miles of Interstate 75 to rediscover the city as a commuter suburb. Census figures show the population of Cartersville jumped 32% to 15,925 during the past decade.
In 1998, to meet the challenges of growth and managed care, Payne helped create Cartersville Pediatrics, a five-physician group formed in a merger of two like-minded practices. He also shepherded the buyout of the group by a local hospital system.
At first, the buyout looked like a hit. Patient volume soared, from 25,000 to 40,000 a year.
But then two physicians, dissatisfied with the new ownership, waved good-bye, and the terrific growth opportunity became an arduous recruiting challenge for the remaining providers.
"We couldn't recruit more to handle the volume," says Payne, the group's chief financial officer. "I talked to a good 25 doctors--they just didn't want to work for a hospital-owned practice. It was like pulling teeth to get people to come and take a look."
Frustrated by recruiting and other complications from the buyout, doctors in the Cartersville group eventually bought their practice back from the hospital in December 2000. That eased, but did not eliminate, Payne's recruiting headaches, which are not unique.
Physician executives and recruiting specialists say that whether group practices are privately owned or part of a network, single-specialty or multispecialty, rural or urban, all are challenged to attract and retain high-quality practitioners.
What all these groups share is the need to evaluate themselves honestly and communicate who they are and what it is they're looking for in their recruiting campaigns. Employers and employees alike say this is the formula to achieve a good and lasting match in changing times.
The pressure on practices to recruit effectively comes from a variety of sources, be it a physician retiring early, an aging population or an intense shift in the demand for specialists--oncologists, cardiologists, gastroenterologists, urologists, radiologists and anesthesiologists in particular.
Recruiter Mark Smith says employers must have a recruiting plan in place and be ready to make a decision quickly, or be prepared for a long and possibly frustrating and expensive search.
"Practices need to take an objective, realistic look at what they have to offer," says Smith, an executive vice president of Merritt, Hawkins & Associates, a national staffing firm based in Irving, Texas. "They need to throw the old book out, to try and ignore what happened in the past. There is no comparison between what they've done and what they need to do."
With average recruiting costs estimated at about 30% of a desired position's salary, an organization going it alone can easily spend $25,000 per hire for a physician. Use of a recruiting firm can add another $20,000 to $50,000 in fees on top of that, says Kurt Scott, associate vice president of human resources for the Danville, Pa.-based Geisinger Health System.
"It's very costly, but that's about what people should be budgeting when you consider ads, interview expenses, airfare, hotels, meals and moving expenses," says Scott, whose system employs more than 600 physicians.
Attention to culture
Under hospital ownership, all of Cartersville Pediatrics' interviews and decisions about hiring and compensation had to go through the hospital's administrative process. Payne says he was frustrated by the time spent on phone calls and receptions that only ended with rejection.
He became a sort of job counselor, with some recruits using him as a sounding board to evaluate their current situations. Yet Payne says he never got so discouraged as to doubt the way of life at Cartersville Pediatrics.
"We live in a great area with desirable demographics--all the things that should really attract people," he says.
Some large systems, such as Geisinger, are developing aggressive in-house physician recruitment departments, along with enticing incentive packages. From July 2000 through June 2001, the Geisinger team brought in 78 physicians, 32 midlevel providers and 12 executives (including some physician executives), about double the numbers from the previous year.
Similarly, The Everett (Wash.) Clinic, a multispecialty, physician-owned group of about 200 doctors, 15 months ago began employing a recruiting specialist full time to support its annual growth rate of about 6%. Since then, Everett has recruited about 30 physicians, says Erica Peavy, M.D., associate director for physician support. Peavy says the clinic still uses outside help for some hard-to-hire specialties.
For Cartersville Pediatrics, located in an area with a healthcare provider shortage, the focus has been on maintaining a distinct culture that appeals to its 40 employees.
"Last year was a disaster when we lost a recruit and lost a physician," Payne says. "We were two down from where we needed to be, and boy, we caught flak from the community. When you can't face friends because you can't see their kids, you're in trouble in a small town. We're determined not to let that happen again."
Indeed, the group is back up to nine providers--five physicians and four nurse practitioners--and boasts a 90% overall staff retention rate despite the merger, acquisition and disengagement.
One of the new recruits, Wen Liou, M.D., who came on board in July, credits the efficiency of Cartersville Pediatrics and his frank interview for his decision to take the job. Although he declined an offer while the group was hospital-owned, Liou was still interested when called a year later, post-separation.
"They were very honest and very fair," Liou says. "They had no fancy legal issues to worry about. They told me what it was like to work here and told me up front what they expected from me. It has turned out to be very close to what I expected--at some points even better."
The Cartersville group invites recruits to visit the office during the busiest times as well as on slow days.
Liou says he saw right away that the main problem was that they didn't have enough doctors to see all the patients.
"It made me feel I was needed here," he says. "I knew I wouldn't be sitting around reading medical journals and twiddling my thumbs."
Liou also saw the careful scheduling and processing of patients at Cartersville Pediatrics, the office layout, where charts and supplies are strategically located for ease of access, and two separate, spacious waiting rooms for well and ill patients.
One thing the Cartersville group cannot control, however, is its location. Liou says it was probably the factor that carried the most weight in his decisionmaking. Fortunately, a rapidly growing but semirural setting in the Southeast was what Liou, a Louisiana native, was looking for.
According to a Merritt Hawkins survey this year of final-year medical residents, 73% ranked geographic location and lifestyle as the "single most important consideration in selecting a practice opportunity."
'Salary is always negotiable'
Money is a big factor in recruiting, but it's not everything.
"Salary is always negotiable," says Eric Bieber, M.D., the chairman of OB/GYN and director of women's services at Geisinger. "The key decisionmaker is always the opportunity. Salary can make or break the deal, but it's the opportunity that will cause people to relocate themselves or their families across town or country."
Bieber, who started at Geisinger on Oct. 1, says he sought the right post for about a year, looking specifically at chair positions with tertiary care institutions that had residencies. Previously, he was reproductive endocrinology and infertility chief at the University of Chicago Hospitals and Health System.
"We live in a time where the cost of making bad choices is very high," Bieber says. "Trying to find the key in recruiting is trying to find appropriate matches that will work for both sides over prolonged periods of time.
"The match is not just one of interests but one of ideologies," he says. "Can you fulfill an individual's desires at multiple levels, so that he is happy with his surroundings? Because that's the good match that's likely to last, even during turbulent times. Those are the intangibles that will make or break an individual's productivity."
The great value of Geisinger's recruiting staff is just this kind of assessment ability, Scott says.
"My recruiters listen to what the physician is looking for. They probe and they question. They also need to aggressively recruit the spouse or significant other.
"We put together separate itineraries and interviews to make the spouse feel just as important as the physician does," Scott says. "If this is someone we have to relocate--whether it's a radiology tech, nurse, midlevel provider, physician or executive--we want to know what's important to them. Few people do that."
Bieber says what attracted him to Geisinger was its long history and future opportunities to improve the clinical program. He is enthusiastic about Geisinger's information system, which he says will help in building stronger residency and clinical research programs. The quality of life within a smaller, less urban area was attractive to Bieber and his family, while professionally he still has all the advantages he was used to in a large tertiary setting in Chicago.
"Often people won't see those (aspects) even during the interview process," Bieber says. "The good interview will give a sense of opportunities within the opportunity. That's the art of recruiting."
On the West Coast, The Everett Clinic is cognizant of the need to remain financially competitive, with Washington reimbursements among the lowest in the nation. Still, Peavy says, intangibles are important, too.
"When our medical directors meet with prospective candidates, they share our core values and board goals so folks can get the flavor of who we are," Peavy says.
The Everett Clinic also has identified flexibility as an important component of retention. The group has developed a proven job-share policy that allows physicians with similar styles to share a practice. Peavy says it is a favorable option for patients, who receive better coverage; for the organization, in terms of cost-effectiveness; and for the physicians looking for versatile schedules.
Right behind salary in importance is stability, she says.
"Candidates are aware of what's going on in the healthcare market," she says. "They've seen friends suffer in organizations that have fallen apart, and they want to know, how stable is your organization? What's the long-term outlook?
"We're very comfortable answering that we feel positive about our future," Peavy says. "The time for full disclosure and candid conversation is best had before a contract is signed."
The perfect package?
Hospitals and health systems, and some private community practices, are limited by the IRS in the size of financial rewards and bonuses they can offer, as well as by Stark, Medicare and Medicaid anti-kickback and referral laws. But that doesn't mean employers can't be creative when building salary and benefit proposals.
Payne says Cartersville Pediatrics offers as standard benefits paid malpractice insurance, medical and dental insurance, and long- and short-term disability. A retirement plan is forthcoming.
The group also is committed to volunteerism. It offers a paid week off for employees to do community service work. Recruits find that refreshing, Payne says.
Loan repayment is not yet standard due to rule complications, Payne says. His partner, CEO Richard Young, M.D., did attempt to help one new doctor secure debt repayment through the National Health Service Corps, an HHS program for underserved areas, but qualification requirements proved to be more of a change than the practice could afford.
The group uses base salaries that increase annually. And while bonuses were not guaranteed this year due to the startup costs involved in repurchasing the group, Payne says it looks like some extra money will be available. The bonus structure pays on the basis of productivity, seniority and a portion that is equally split among providers. Next year, chart completion and the satisfaction of patients and support staff also will play a role in determining year-end rewards.
For his part, Liou says he prefers the clear, easy-to-read contract he signed at Cartersville to the "physics formulas" of other salary arrangements. He says he was upset by hidden deductions in his contract in Tampa, Fla., that made him feel the wool had been pulled over his eyes. His advice to employers? Keep the contract simple. And to recruits, Liou recommends walking away from complex compensation proposals that require the expense of hiring lawyers to interpret.
In Pennsylvania, Geisinger has developed a loan forgiveness plan in which payments are made to medical schools annually for four years up to a total of $54,000. A fellowship subsidy program, set up as a loan repaid with service, evolved as a response to the market shift toward specialists, recruiting director Scott says. The system will subsidize residents or staff through their specialty training with the stipulation that the doctor return to work for Geisinger for a specified time.
It's an alluring way to cultivate those hard-to-find specialists, especially considering that the average income for radiologists increased by almost $50,000 last year, from $225,000 to $271,000, according to a Merritt Hawkins survey of physician recruitment incentives. The high-end offer in early 2001 was $500,000, compared with $300,000 last year. That same study showed that signing bonuses continue to be used by 29% of physician employers. The average amount of bonuses offered fell from $15,900 to $15,176.
Peavy of The Everett Clinic says signing bonuses were offered to 40% of the 19 physicians hired as of July 31, a large increase over recent years. A program involving in-house recruitment bonuses of $5,000 for staff who help find a permanent new hire also has been successful. The clinic has paid five staff bonuses so far this year, he says.
Yet the clinic continues to use headhunters and "pulls out all the stops" for those specialists that command the high salaries, Peavy says.
"We're seeing (recruitment) take longer, and we have to spend more money to get fewer quality candidates," Scott says. "We've had to adjust salaries to make sure we're with the market. When supply and demand changes, it's a double whammy."
Smith of Merritt Hawkins sympathizes.
"I feel for the groups," he says. "It's hard to believe things can change that quick. But you have to acknowledge the demand and the fact that specialists have 10 to 15 other opportunities when they're talking to you. Be prepared. Have a contract lined up, have the money in place and strike while the iron is hot."