How Hospitals Are Luring Doctors onto Their Payrolls

By Slomski, Anita J. | Medical Economics, November 21, 1994 | Go to article overview

How Hospitals Are Luring Doctors onto Their Payrolls


Slomski, Anita J., Medical Economics


Representatives from 175 or so hospitals came to Atlanta recently to learn how they could turn their institutions into that shining city on the hill--an integrated health-care system. They were in town to attend a conference sponsored by The National Institute of Physician Recruitment & Retention that promised answers to every hospital executive's quandary: how to acquire the right physicians at the right price to staff a managed-care network.

How does this affect you? If you're in a small practice, you may very well find yourself on the receiving end of hospital recruiting strategies. The more you know about what hospitals are paying for practices and what kind of employers they're likely to be, the better you'll be able to evaluate any offer you might receive.

And if you currently practice in a medical group or HMO? These hospitals are targeting the very primary-care doctors you may need in your own practice, and they're positioning themselves to compete with you for managed-care business. And much of the advice meted out at this conference--tips on how to coax physicians out of private practice, for example, and on how to make them happy, productive team players--applies equally well to groups.

To hear most of the Atlanta speakers tell it, the battle to recruit and compete is a life-or-death struggle. "Don't think of acquiring physician practices as a money-making venture," said Pepper Hatch, president of the consulting company Delta Health Care in Nashville. "This is a strategy for survival. You are acquiring patients." In the process, Hatch said, hospital executives must learn to view physicians differently. "All too often, hospitals look at doctors as commodities," Hatch said. "But now you have to look at them as partners."

Lucky for hospitals, the audience was told, that doctors--especially those in managed-care markets--are as motivated to become employees as hospitals are to employ them. Speakers portrayed physicians as "scared" at the prospect of health-care reform, wanting "simplicity" in their lives, and desiring to shape and lead the emerging integrated health systems.

One speaker told the story of a harried pediatrician in solo practice unable to recruit a young partner who would work for less than the $120,000 guaranteed by local hospitals. So this soloist "sold out to the deep pockets" herself and took a $155,000 job with a hospital. Despite a rocky beginning, her life as an employee has settled into a happy routine. She's enjoying her management role, a reduced call schedule, and new-found time with her family.

Of course not all physicians view hospitals as greener pastures, but these consultants predict that will change. "Self-employed physicians are still on top financially, but their margins are declining rapidly," said Beverly Maison, of Chicago's Tiber Group. "Some doctors will have to feel more pain before they agree to join a managed-care network."

Primary-care doctors--the "pretty babies," as one speaker called them--dominated conference discussions; most hospitals aren't interested in acquiring specialists' practices. Consultants reminded attendees how hard they will have to compete for internists and FPs. For example, a third of new primary-care residents sign on with Kaiser or other staff-model HMOs, which typically pay better than hospitals and can offer physicians an instant practice. Group practices also pay primary-care doctors marginally better than hospitals--about 4 percent more, according to compensation data presented by Detroit human resources consultant Tim Cotter.

In the competition to recruit doctors, hospitals often trade on their long-standing relationship with attending physicians--a smart strategy, according to Lisa Rolfe, a consultant with the Tiber Group. "Physicians have a history of trust and partnership with their local hospital," she said. "They like the idea of helping drive the strategies of the hospital. How much impact can one employee have on an organization like Kaiser? …

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