2011 REVIEW OF PHYSICIAN
RECRUITING INCENTIVES
An OvervIew Of THe SAlArIeS, BOnuSeS,
AnD OTHer IncenTIveS cuSTOMArIly uSeD
TO recruIT PHySIcIAnS
© 2011 Merritt Hawkins | 5001 Statesman Drive, Irving, Texas 75063 | (800) 876-0500 | MerrittHawkins.com
2011 REVIEW OF PHYSICIAN
RECRUITING INCENTIVES
An Overview of the Salaries, Bonuses,
and Other Incentives Customarily Used
to Recruit Physicians
IN THIS REPORT
Key Findings
Page 4
MERRITT HAWKINS’ 2011 REVIEW OF
PHYSICIAN RECRUITING INCENTIVES:
RECRUITING ASSIGNMENT CHARACTERISTICS
AND METRICS
TRENDS AND OBSERVATIONS
2
Pages 5-16
Page 16
WHO IS IN DEMAND?
Pages 16-20
WHERE ARE THEY RECRUITING?
INTO WHICH SETTINGS?
Pages 21-22
WHAT ARE THEY OFFERING?
Page 23
SUMMARY
Page 26
Merritt Hawkins’ Additional Surveys
Page 27
For additional information about this
survey contact:
5001 Statesman Drive,
Irving, Texas 75063
Phil Miller | (800) 876-0500
phil.miller@amnhealthcare.com
MerrittHawkins.com
OVERVIEW
Merritt Hawkins is a national healthcare search and consulting
firm specializing in the recruitment of physicians in all
medical specialties as well as select allied health professionals.
Established in 1987, Merritt Hawkins is a company of AMN
Healthcare (NYSE: AHS) the nation’s largest healthcare staffing
organization and a leading nationwide provider in all four of
its business lines: travel nurse staffing, locum tenens staffing,
physician permanent placement services and allied healthcare
professional staffing.
This report marks Merritt Hawkins’ 18th annual review of the
search and consulting assignments the firm conducts on behalf
of its clients.
The 2011 Review is based on the 2,667 permanent physician and
advanced allied professional search assignments that Merritt
Hawkins/AMN Healthcare’s physician staffing companies were
engaged to conduct during the 12-month period from April 1,
2010, to March 31, 2011.
The intent of the Review is to quantify financial and other
incentives offered by our clients to physician candidates during
the course of recruitment. The range of incentives detailed in
the Review may be used as a benchmark for evaluating which
recruitment incentives are customary and competitive in
today’s physician job market. In addition, the Review is based
on a national sample of search assignments and provides an
indication of which medical specialties are currently in the
greatest demand and the types of medical settings into which
physicians are being recruited.
Following are several key findings of the Review.
3
Key Findings
Merritt Hawkins’ 2011 Review of Physician Recruiting Incentives reveals a number of trends within
the physician recruiting market, including:
Demand for physicians remains strongest in primary care. For the sixth consecutive year, family practice
and general internal medicine were Merritt Hawkins’ top two most requested physician search assignments.
Hospitals continue to employ physicians in ever greater numbers. Fifty six percent of Merritt Hawkins
physician search assignments in 2010/11 featured hospital employment of the physician, up from 51
percent the previous year and up from 23 percent in 2005/06. Physicians are seeking the stability of
employment, while hospitals are seeking to align with physicians in response to healthcare reform, which
is promoting the use of Accountable Care Organizations (ACOs), bundled payments and other physicianaligned and integrated delivery mechanisms.
In a sign of increased physician employment, salaries have almost entirely replaced income guarantees
(traditionally used to recruit private practice physicians) as a compensation model. Only nine percent of
physician search assignments Merritt Hawkins conducted in 2010/11 featured income guarantees, down
from 21 percent in 2006/07 and down from 41 percent 2003/2004.
The majority of search assignments (74 percent) Merritt Hawkins conducted in 2010/11 featured a salary
with production bonus. Most such bonuses (52 percent) are based on a Relative Value Units (RVU)
formula. Though health reform encourages the use of quality or cost based compensation metrics, few
search assignments Merritt Hawkins conducted in 2010/11 featured such metrics. Volume/production
remains the standard.
Patient aging, a stagnant economy, continued high unemployment, two wars, and a limited supply of
practitioners continues to drive demand for psychiatrists. Psychiatry was Merritt Hawkins’ 4th most
requested search assignment in 2010/11, up from 10th four years ago.
Reimbursement cuts and declines in elective procedures have significantly reduced volume of search
assignments for certain specialists. Radiologists, cardiologists and anesthesiologists, all among Merritt
Hawkins’ most requested search assignments four to five years ago, were the firm’s 17th, 18th, and 19th
most requested assignments in 2010/11.
Signing bonuses, relocation and continuing medical education allowances remain standard in most
physician recruitment incentives packages, rather than the occasional “carrot” they were in years past.
Housing allowances are a new form of recruiting incentive that some facilities are offering to assist
physicians. Due to the volatile real estate market, some physician candidates are unable to relocate without
such assistance, which was offered in six percent of the recruiting assignments Merritt Hawkins conducted
in 2010/11, up from less than one percent in previous years.
Demand for physicians is not confined to traditionally underserved rural areas. A plurality of search
assignments Merritt Hawkins conducted in 2010/11 (44 percent) took place in communities of 100,000 or
more. Only 22 percent of assignments took place in communities of 25,000 or less.
4
Following is a breakout of the characteristics and metrics of Merritt Hawkins’ 2010/2011 physician
recruiting assignments.
MERRITT HAWKINS’ 2011 REVIEW OF PHYSICIAN RECRUITING
INCENTIVES: RECRUITING ASSIGNMENT CHARACTERISTICS
AND METRICS
All of the following numbers are rounded to the nearest full digit.
1
Medical Settings of Physician Search Assignments
2010/11
2009/10
2008/09
2007/08
2006/07
1,495 (56%)
1,430 (51%)
1,481 (45%)
1,416 (45%)
1,297 (43%)
505 (19%)
674 (24%)
953 (29%)
1,170 (37%)
1,058 (35%)
54 (2%)
114 (4%)
362 (11%)
159 (5%)
244 (8%)
*Partnership
344 (13%)
338 (12%)
428 (13%)
226 (7%)
238 (8%)
Association
82 (3%)
58 (2%)
4 (>1%)
29 (1%)
99 (3%)
187 (7%)
195 (7%)
66 (2%)
134 (4%)
74 (2%)
Hospital
Group
Solo
Other
Other:
Community Health
Centers (CHCs), life
insurance companies,
health system
subsidiaries, publicly
traded corporations,
health maintenance
organizations (HMOs).
*If Partnership, Time to Partner (of 344 searches offering partnership)
2010/11
Immediate
2
8 (2%)
One Year
152 (44%)
Two Years
158 (46%)
Three Years
23 (7%)
Four Years
0 (0%)
Five Years
3 (<1%)
Note: 2010/11 is the first
year this question was asked.
Forty-nine States Where Search Assignments Were Conducted
AK, AL, AR, AZ, CA, CO, CT, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME,
MI, MO, MN, MS, MT, NC, ND, NE, NH, NJ, NM, NY, NV, OH, OK, OR, PA, RI, SC,
SD, TN, TX, UT, VA, VT, WA, WI, WV, WY
5
3
Number of Searches by Community Size
2010/11
2009/10
2008/09
2007/08
2006/07
0-25,000
588 (22%)
730 (26%)
1,281 (39%)
973 (31%)
935 (31%)
25,001-100,000
906 (34%)
901 (32%)
1,153 (35%)
851 (27%)
878 (29%)
1,173 (44%)
1,182 (42%)
854 (26%)
1,322 (42%)
1,203 (40%)
100,001+
4
6
Top 20 Most Requested Physician Searches by Medical Specialty
2010/11
2009/10
2008/09
2007/08
2006/07
Family Practice
(Includes Family Practice/OB)
532
375
595
492
303
Internal Medicine
295
246
391
314
273
Hospitalist
160
124
169
208
194
Psychiatry
133
179
122
106
81
Orthopedic Surgery
104
88
147
145
172
Emergency Medicine
92
116
86
90
91
OB/GYN
80
69
137
159
159
Neurology
79
49
87
84
58
General Surgery
69
61
152
81
121
Pediatrics
64
84
93
72
63
Urology
56
44
78
74
63
Dermatology
48
23
45
35
45
Hematology/Oncology
35
21
57
46
59
Gastroenterology
32
41
78
68
78
Pulmonology
32
32
83
48
29
Otolaryngology
31
32
54
47
56
Radiology
27
63
74
109
187
Cardiology
26
58
103
69
163
Anesthesiology
21
37
48
52
46
Endocrinology
19
15
24
23
25
5
Other Specialty Recruitment Assignments
Allergy/Immunology
Ophthalmology
Bone Marrow Transplant
Oral Maxillofacial Surgery
Breast Surgery
Orthopedic Foot & Ankle Surgery
Cardiac Anesthesiology
Orthopedic Hand Surgery
Cardiothoracic Surgery Orthopedic Spine Surgery
Cardiovascular Surgery
Orthopedic Total Joint
Colon & Rectal Surgery Orthopedic Trauma
Critical Care/Pediatrics
Pain Management
Critical Care/Pulmonology
Pathology
CRNA
Pediatric/Anesthesiology
Dentist
Pediatric/Gastroenterology
Dermatology/Pathology Pediatric/Endocrinology
Geriatrics
Pediatric/Intensivist
Gynecology
Pediatric/Nephrology
Gynecology/Oncology
Pediatric/Otolaryngology
Infectious Disease
Pediatric/Orthopedic Surgery
Hepatology
Pediatric/Pulmonology
Intensivist
Pediatric/Surgery
Internal Medicine /Pediatrics
Physical Therapy
Mammography
Physiatry
Maternal/Fetal Medicine
Physician Assistant
Mohs Surgery
Plastic Surgery
Musculoskeletal Podiatry
Nephrology
Radiation Oncology
Neurohospitalist
Rheumatology
Neurological Surgery
Sleep Medicine
Neurointensivist
Surgicalist
Neuropsychiatrist
Surgical Oncology
Neuroradiology
Surgical Pathology
Nocturnist
Transplant Surgery
Nuclear Medicine
Trauma Surgery
Nurse Practitioner
Urological Gynecology
Obstetrics
Occupational Medicine
Vascular Surgery
7
6
Administrative, Academic and Executive Titles Include:
• Assistant Professor
• Associate Department Chair
• Associate Professor
• Chief Executive Officer
• Chief Medical Officer
• Clinical Director
• Division Chair
• Department Chair Executive
• Full Professor
• Medical Director
• Residency Director
• Vice President, Medical Affairs
8
7
Income Offered to Top 20 Recruited Specialties
(Base salary or income guarantee only, does not include production bonus or benefits)
Family Practice
Low
Family Practice with Obstetrics
Average
high
Low
Average
high
2010/11
$130,000
$178,000
$290,000
2010/11
$159,000
$197,000
$310,000
2009/10
$140,000
$175,000
$255,000
2009/10
$155,000
$200,000
$320,000
2008/09
$120,000
$173,000
$245,000
2008/09
$140,000
$184,000
$275,000
2007/08
$120,000
$172,000
$275,000
2007/08
$140,000
$184,000
$275,000
2006/07
$120,000
$161,000
$250,000
2006/07
$145,000
$159,000
$200,000
Internal Medicine
Low
Average
Hospitalist
high
Low
Average
high
2010/11
$130,000
$205,000
$285,000
2010/11
$160,000
$217,000
$305,000
2009/10
$145,000
$191,000
$250,000
2009/10
$165,000
$208,000
$295,000
2008/09
$140,000
$186,000
$300,000
2008/09
$160,000
$201,000
$300,000
2007/08
$125,000
$176,000
$330,000
2007/08
$150,000
$181,000
$300,000
2006/07
$135,000
$174,000
$275,000
2006/07
$145,000
$180,000
$250,000
Psychiatry
Low
Average
Orthopedic Surgery
high
Low
Average
high
2010/11
$160,000
$220,000
$275,000
2010/11
$300,000
$521,000
$700,000
2009/10
$150,000
$209,000
$310,000
2009/10
$300,000
$519,000
$825,000
2008/09
$160,000
$200,000
$300,000
2008/09
$300,000
$481,000
$1,000,000
2007/08
$120,000
$189,000
$230,000
2007/08
$250,000
$439,000
$750,000
2006/07
$160,000
$186,000
$230,000
2006/07
$250,000
$413,000
$650,000
9
Emergency Medicine
Low
Average
OB/GYN
high
Low
Average
2010/11
$160,000
$255,000
$380,000
2010/11
$220,000
$282,000
$360,000
2009/10
$185,000
$247,000
$380,000
2009/10
$175,000
$272,000
$350,000
2008/09
$185,000
$244,000
$302,000
2008/09
$150,000
$266,000
$655,000
2007/08
$190,000
$240,000
$258,000
2007/08
$160,000
$255,000
$405,000
2006/07
$150,000
$239,000
$300,000
2006/07
$200,000
$247,000
$345,000
Neurology
Low
Average
General Surgery
high
Low
Average
high
2010/11
$160,000
$256,000
$345,000
2010/11
$205,000
$336,000
$450,000
2009/10
$180,000
$281,000
$460,000
2009/10
$175,000
$314,000
$410,000
2008/09
$180,000
$258,000
$375,000
2008/09
$175,000
$321,000
$616,000
2007/08
$150,000
$230,000
$325,000
2007/08
$240,000
$321,000
$450,000
2006/07
$170,000
$234,000
$275,000
2006/07
$225,000
$301,000
$350,000
Pediatrics
Low
Average
Urology
high
Low
Average
high
2010/11
$120,000
$183,000
$250,000
2010/11
$320,000
$453,000
$550,000
2009/10
$145,000
$180,000
$265,000
2009/10
$250,000
$400,000
$550,000
2008/09
$120,000
$171,000
$350,000
2008/09
$230,000
$401,000
$550,000
2007/08
$120,000
$159,000
$265,000
2007/08
$300,000
$387,000
$550,000
2006/07
$115,000
$159,000
$200,000
2006/07
$275,000
$400,000
$500,000
Dermatology
Low
10
high
Average
Hematology/Oncology
high
Low
Average
high
2010/11
$245,000
$331,000
$500,000
2010/11
$250,000
$369,000
$550,000
2009/10
$244,000
$314,000
$400,000
2009/10
$300,000
$385,000
$500,000
2008/09
$200,000
$297,000
$400,000
2008/09
$250,000
$335,000
$450,000
2007/08
$250,000
$315,000
$400,000
2007/08
$225,000
$365,000
$500,000
2006/07
$200,000
$318,000
$400,000
2006/07
$300,000
$339,000
$500,000
Gastroenterology
Low
Average
Pulmonology
high
Low
Average
high
2010/11
$300,000
$424,000
$505,000
2010/11
$200,000
$311,000
$430,000
2009/10
$300,000
$411,000
$600,000
2009/10
$200,000
$305,000
$430,000
2008/09
$250,000
$393,000
$600,000
2008/09
$215,000
$293,000
$400,000
2007/08
$250,000
$379,000
$475,000
2007/08
$200,000
$283,000
$525,000
2006/07
$200,000
$365,000
$450,000
2006/07
$225,000
$266,000
$350,000
Otolaryngology
Low
Average
Radiology
high
Low
Average
high
2010/11
$230,000
$359,000
$500,000
2010/11
$225,000
$402,000
$450,000
2009/10
$230,000
$349,000
$450,000
2009/10
$225,000
$417,000
$650,000
2008/09
$280,000
$377,000
$450,000
2008/09
$300,000
$391,000
$500,000
2007/08
$275,000
$362,000
$600,000
2007/08
$230,000
$401,000
$750,000
2006/07
$200,000
$312,000
$400,000
2006/07
$250,000
$380,000
$500,000
Cardiology (non-invasive)
Cardiology (invasive)*
Low
Average
high
Low
2010/11
$270,000
$420,000
$525,000
2010/11
$380,000
$532,000
$650,000
2009/10
$315,000
$420,000
$600,000
2009/10
$325,000
$495,000
$680,000
2008/09
$180,000
$419,000
$880,000
2007/08
$250,000
$392,000
$1,000,000
2006/07
$250,000
$391,000
$500,000
Average
high
*2009/10 is the first year non-invasive
and invasive cardiology income offers
were listed separately in this survey.
Anesthesiology
Low
Average
Endocrinology
high
Low
Average
high
2010/11
$290,000
$355,000
$475,000
2010/11
$180,000
$218,000
$270,000
2009/10
$250,000
$331,000
$475,000
2009/10
$200,000
$219,000
$270,000
2008/09
$250,000
$344,000
$500,000
2008/09
$180,000
$222,000
$305,000
2007/08
$250,000
$336,000
$480,000
2007/08
$158,000
$205,000
$250,000
2006/07
$220,000
$300,000
$425,000
2006/07
$180,000
$205,000
$250,000
11
8
9
Type of Incentive Offered
Salary
Salary with Bonus
Income Guarantee
Other
2010/11
428 (16%)
1,975 (74%)
239 (9%)
25 (<1%)
2009/10
339 (12%)
2,082 (74%)
367 (13%)
25 (<1%)
2008/09
460 (14%)
2,138 (65%)
526 (16%)
164 (5%)
2007/08
694 (22%)
1,854 (59%)
598 (19%)
N/A
2006/07
362 (12%)
2,010 (67%)
644 (21%)
N/A
If Salary Plus Production Bonus, What Type of Bonus was Offered?
(of 1,975 searches offering salary plus bonus)
Note: 2011 is the first year this question was asked.
2010/11
RVU Based
Net Collections
Patient Encounters
Gross Billings
Other
1,026 (52%)
672 (34%)
120 (5%)
21 (<1%)
136 (7%)
Other: timely delivery of patient records, qualitative measures, profit share, discretionary bonus,
administrative responsibilities, leadership stipend, retention
10
12
If Income Guarantee, What Type? (of 239 searches offering income guarantees)
Net Collections Guarantee
Gross Collections Guarantee
2010/11
231 (97%)
8 (3%)
2009/10
324 (88%)
43 (12%)
2008/09
421 (80%)
105 (20%)
2007/08
500 (84%)
98 (16%)
2006/07
501 (78%)
143 (22%)
11
12
13
If Income Guarantee, What was the Term Offered?
(of 239 searches offering income guarantees)
1 Year
2 Year
3 Year
Other
2010/11
113 (47%)
77 (32%)
49 (21%)
0 (0%)
2009/10
202 (55%)
130 (36%)
35 (9%)
0 (0%)
2008/09
289 (55%)
216 (41%)
0 (0%)
21 (4%)
2007/08
342 (57%)
198 (33%)
58 (10%)
N/A
2006/07
411 (64%)
200 (31%)
33 (5%)
N/A
Searches Offering Relocation Allowance
Yes
No
2010/11
2,451 (92%)
216 (8%)
2009/10
2,671 (95%)
142 (5%)
2008/09
3,222 (98%)
66 (2%)
2007/08
2,896 (92%)
250 (8%)
2006/07
2,954 (98%)
62 (2%)
Amount of Relocation Allowance
Low
Average
High
2010/11
$1,000
$10,454
$85,000
2009/10
$1,000
$10,035
$30,000
2008/09
$2,500
$10,427
$25,000
2007/08
$1,500
$9,807
$20,000
2006/07
$1,000
$9,808
$75,000
13
Signing bonuses, relocation and continuing
medical education allowances remain standard in
most physician recruitment incentive packages.
14
15
16
14
Searches Offering Signing Bonus
Yes
No
2010/11
2,025 (76%)
642 (24%)
2009/10
2,135 (76%)
678 (24%)
2008/09
2,795 (85%)
493 (15%)
2007/08
2,326 (74%)
820 (26%)
2006/07
2,173 (72%)
843 (28%)
Amount of Signing Bonus Offered (of 2,025 searches offering signing bonus)
Low
Average
High
2010/11
$5,000
$23,790
$200,000
2009/10
$2,000
$22,915
$100,000
2008/09
$5,000
$24,850
$75,000
2007/08
$4,000
$24,800
$200,000
2006/07
$5,000
$20,000
$100,000
Searches Offering Continuing Medical Education
Yes
No
2010/11
2,559 (96%)
108 (4%)
2009/10
2,618 (93%)
195 (7%)
2008/09
3,158 (96%)
130 (4%)
2007/08
2,863 (91%)
283 (9%)
2006/07
2,746 (91%)
270 (9%)
17
Amount of CME Pay Offered (of 2,559 searches offering to pay CME)
Low
18
19
Average
High
2010/11
$500
$3,194
$10,000
2009/10
$500
$3,335
$15,000
2008/09
$1,000
$3,121
$6,500
2007/08
$700
$3,924
$35,000
2006/07
$1,000
$3,312
$15,000
Searches Offering to Pay Additional Benefits
2010/11
2009/10
2008/09
2007/08
2006/07
2005/06
Health Insurance
99%
98%
91%
95%
91%
91%
Malpractice
97%
99%
94%
96%
91%
92%
Retirement
90%
90%
85%
91%
72%
70%
Disability
77%
84%
75%
79%
69%
70%
Educational Loan Forgiveness
29%
38%
31%
35%
26%
34%
Housing Allowance
6%
N/A
N/A
N/A
N/A
N/A
Other
3%
N/A
N/A
N/A
N/A
N/A
If Educational Loan Forgiveness was Offered, What was the Term?
(of 772 searches offering educational loan forgiveness)
2010/11
One Year
39 (5%)
Two Year
208 (27%)
Three Year
525 (68%
Note: 2010/11 is the first
year this question was asked.
15
TRENDS AND OBSERVATIONS
Merritt Hawkins’ annual Review of Physician Recruiting Incentives, now in its 18th year, tracks three key
physician recruiting trends.
1
First, based on the physician recruiting assignments Merritt Hawkins is contracted to conduct, the
Review indicates which types of physicians are in the greatest demand and which are the most
challenging to recruit.
2
3
Second, the Review indicates what types of communities are recruiting physicians based on
population size and the types of practice settings into which physicians are being recruited.
Third, the Review indicates the types of financial and other incentives that are being used to
recruit physicians.
Each of these trends is discussed below
WHO IS IN DEMAND?
Merritt Hawkins’ 2011 Review of Physician Recruiting Incentives examines the permanent physician
recruiting assignments Merritt Hawkins/AMN Healthcare’s physician staffing companies were engaged to
conduct during the 12 month period from April 1, 2010 to March 31, 2011.
These search assignments reflect which types of physicians hospitals, medical groups, and other
organizations are seeking nationwide. They also reflect which types of physicians may be particularly
difficult to recruit, necessitating the assistance and additional resources of a physician recruiting firm.
Economic Factors
During the 12-month period covered by the Review, the economy saw only modest growth in healthcare
related employment, a trend generally reflected in the physician recruiting market.
Beginning in 2008, a decrease in utilization of some medical services (particularly elective procedures),
tight capital markets, reimbursement cuts, and the uncertainty engendered by healthcare reform, caused
many hospitals, medical groups and other healthcare organizations to remain relatively cautious in
regard to physician recruiting, delaying or scaling back their staffing plans. In recent months, however,
there have been signs that utilization (including elective procedures) may be increasing, as reflected by
renewed search activity for specialists who commonly perform electives, such as orthopedic surgeons,
dermatologists, and general surgeons.
16
The sluggish economy also has affected the willingness and/or the ability of some physician candidates
to relocate. Given the financial climate, some physicians have chosen to ride out the economic recovery
where they are rather than embracing new opportunities, while others are restricted in their ability to move
because of unfavorable real estate positions. Some older physicians, their financial portfolios downgraded
by the recession, have chosen to postpone retirement, obviating the need to recruit to replace them.
The economics of healthcare and the passage of Patient Protection and Affordable Care Act (“health
reform”) also shaped the physician recruiting market in the last 12 months. In order to achieve physician
integration and alignment, and so benefit from emerging cost and quality based reimbursement methods,
many health systems and medical groups have acquired or merged with physician practices. Acquisitions
and integration to some extent replaced traditional recruitment in the last year, as healthcare organizations
have focused on preparing for new delivery models.
As this trend plays out, there has been a nationwide lull in the traditional physician recruiting market,
which is only now showing signs of returning to its customary vigor.
Primary Care Boom Continues
In cases where health facilities have proceeded with physician recruiting, the strongest area of demand
remains primary care, defined in this Review as family medicine, general internal medicine, and pediatrics.
For the fifth consecutive year, family medicine was Merritt Hawkins’ most requested search assignment,
with general internal medicine second (also for the fifth consecutive year). In the last several years,
pediatrics has risen up the list of Merritt Hawkins’ most requested search assignments and was the tenth
most requested assignment this year (by contrast, in 2005/06 pediatrics was not in the top 20).
Primary care physicians have become a particular focus of recruiting efforts for several reasons. In the
1990s, many medical school graduates gravitated toward primary care residencies, enhancing supply,
while today medical graduates are largely avoiding primary care (this is particularly true of U.S. medical
graduates). Many residency programs, particularly in family medicine, fall well short of filling their
available positions. The chart below illustrates this trend:
Declining Interest In Primary Care
Total Medical Students Matched to Residency Programs, 2010
# planning careers in primary care
24,378
3,891 - 4,385 (16% - 18%)
Percent of all doctors in primary care, 1950
50%
Percent of all doctors in primary care, 2011
35%
*Source: New York Times, June 23rd, 2010.
17
This contraction in supply coincides with the renewed focus that hospitals and medical groups are putting
on primary care after several years of neglect in the early part of this decade. In the case of internal medicine, population aging is driving demand. General internists often manage the care of middle-aged to elderly patients, the fastest growing population segment. These patients often have multiple chronic illnesses
and typically visit a physician at three times the annual rate of younger patients. The current number of
general internists being trained is insufficient to meet the demand generated by an aging population, while
many internists are choosing to practice as hospitalists, further inhibiting supply.
Practice style and physician demographics are additional factors inhibiting supply. Many physicians are
embracing part-time practice or are seeking structured hours as part of a “controllable lifestyle.” Female
physicians, who typically work fewer hours than male doctors, are concentrated in primary care, eroding
the total number of primary care full-time equivalents (FTEs).
General population growth also is a factor. The U.S. Census Bureau indicates the nation’s population will
grow by 49 million people from 2000 to 2020, as the chart below indicates:
U.S. Population in Millions
1929
2000
2010
2020
121
286
325
335
*Source: US Census Bureau
This growth will be generated by new births and by an influx of immigrants, most of whom are
comparatively young and require the services of both family physicians and pediatricians. The number of
physicians being trained in the U.S., meanwhile, has remained virtually static for over 20 years.
Health reform, which encourages the use of value and cost-based physician and hospital reimbursement,
also is promoting demand for primary care. Through the medical home and electronic medical records
application, primary care physicians are seen as key to implementing quality and cost-based metrics.
The Patient Protection and Affordable Care Act included provisions intended to increase the supply of
primary care physicians, in part by redistributing residency positions from hospitals where they are not
being used to hospitals where they will be used. However, this will only increase the number of physicians
completing training by several hundred a year, whereas thousands more per year are required to address
projected physician shortages. A detailed discussion of how health reform will affect physician supply and
demand is included in Health Reform and the Decline of Physician Private Practice, a white paper Merritt
Hawkins completed on behalf of The Physicians Foundation, a non-profit grant-making organization (see
www.physiciansfoundation.org).
Hospitalists, Psychiatrists in Demand
18
Demand also remains robust for hospitalists who provide inpatient care in a hospital setting. Hospitalist
physicians, who are largely comprised of general internal medicine practitioners, were Merritt Hawkins’
third most requested search assignment in 2010/11. Hospitalists have been among Merritt Hawkins’ top
four requested specialties for five consecutive years. Hospitalists are proving a popular and effective way
of enhancing quality of care, reducing medical errors and managing costs. In addition, by relieving office-
based physicians of inpatient work, hospitalists can increase medical staff retention and satisfaction rates.
However, because so many internal medicine practitioners are choosing to practice as hospitalists, largely
to enjoy the lifestyle benefits of defined shifts, the supply of general internists has become constrained,
making internal medicine one of the most difficult search assignments to fill today.
The 2011 Review confirms the continued steep increase in demand for psychiatrists, a specialty where
supply is increasingly unable to keep up with demand. Seventy percent of psychiatrists are 50 years old or
older and many are at or near retirement age, as the chart below indicates:
Psychiatrists by Age
40 or younger
41 – 50
51 – 60
61 or older
All active physicians 50 or older
10%
20%
31%
39%
43%
Psychiatry is attracting fewer medical school graduates, particularly American-trained graduates, as more
than 30 percent of active psychiatrists are international medical graduates (IMGs). Many psychiatrists
today are seeking outpatient practice settings, so that it is increasingly difficult for inpatient facilities to
recruit the physicians they need.
Meanwhile, the incidence of behavioral health problems in the United States continues to increase, with
the Bureau of Health Professions projecting that demand for general psychiatry services will increase 19
percent between 1995 and 2020, while demand for child and adolescent psychiatric services will increase
100 percent in the same timeframe.
Psychiatric problems related to stress are particularly prevalent during periods of high unemployment and
slow economic growth such as we are currently experiencing. Consequently, the number of psychiatry
search assignments Merritt Hawkins conducts increased for six consecutive years, and was the firm’s third
most requested search in 2009/10. Though psychiatry slipped to Merritt Hawkins’ fourth most requested
search in 2010/11, demand for the specialty remains strong.
The 2011 Review also indicates that demand persists for various types of specialists, including emergency
medicine physicians, obstetrician/gynecologists, general surgeons, urologists, and dermatologists.
The 2011 Review confirms the continued steep increase
in demand for psychiatrists, a specialty where supply
is increasingly unable to keep up with demand. Seventy
percent of psychiatrists are 50 years old or older and
many are at or near retirement age.
19
Market Soft for Radiologists, Anesthesiologists, Cardiologists
Demand for certain specialists -- radiologists, cardiologists, and anesthesiologists in particular -- has
been inhibited by the economy and by changes to provider reimbursement. Each of these specialties was
formerly among Merritt Hawkins’ top five recruiting assignments six or seven years ago. Today, they rank
17th, 18th and 19th respectively (see chart below):
number of Merritt Hawkins’ Search
Assignments: Radiology, Cardiology,
Anesthesiology 2010/2011 vs. 2004/05
2004/05
2010/11
Radiology
218
27
Cardiology
210
26
Anesthesiology
64
21
A decrease in both elective procedures and non-elective procedures has eroded demand for
anesthesiologists at a time when many medical school graduates are choosing to specialize in
anesthesiology. In addition, certified registered nurse anesthetists (CRNAs) often are used in lieu of
anesthesiologists or as a supplement to the anesthesiologist staff.
Medicare reimbursement cuts to radiologists, decreased utilization of some imaging procedures, and
continued interest in radiology among medical graduates have helped to balance out the demand for
radiologists and available supply.
Cardiologists have been particularly hurt by reduction in Medicare reimbursement for various cardiology
procedures and by treatment protocols that now favor drugs over certain types of surgical procedures.
While demand for physicians in various specialties tends to run in cycles, the general trend in physician
recruiting today is characterized by a continued demand for physicians in primary care and in a number
of hospital-based and surgical specialties. The ability of many health facilities to recruit the physicians
they need has been inhibited by the recession, but recruiting activity can be expected to increase as the
economic climate improves and the move toward acquisitions and integration slows.
20
In addition, in the next several years, the new health reform law is likely to provide insurance to over
30 million patients who now lack medical coverage. Many of these patients will be seen at Community
Health Centers (CHCs) which are assuming a larger role in providing care for traditionally underserved
populations. This influx of newly insured patients can be expected to increase demand for physicians in
multiple specialties nationwide.
WHERE ARE THEY RECRUITING? INTO WHICH SETTINGS?
The 2011 Review confirms another physician recruiting pattern that has become apparent over the
last several years: an increasing number of hospitals are employing physicians. Direct employment of
physicians by hospitals was one hallmark of managed care in the 1990s, but the practice was largely
dropped as hospitals found the physician employment model problematic. The 2011 Review shows that
56 percent of Merritt Hawkins’ 2010/11 physician search assignments were for settings featuring hospital
employment of the physician, up from 51 percent the previous year and up from 23 percent in 2005/06.
The following graph shows Merritt Hawkins’ search assignments that featured settings in which the
hospital is employing the physician.
Hospital-Based search assigments
1,495 (56%)
2011
2010
1,430 (51%)
1,579 (45%)
2009
2008
1,416 (45%)
2007
1,297 (43%)
2006
2005
2004
654 (23%)
510 (19%)
285 (11%)
21
The current trend toward hospital employment of physicians is different from the 1990s, when hospitals
typically approached physicians about employment opportunities rather than the reverse. Today, many
physicians, specialists in particular, are seeking hospital employment to relieve them of the stress of
high malpractice rates, the struggle for reimbursement, administrative duties and the general risks and
hassles of private practice (a detailed examination of this trend is included in the white paper Health
Reform and the Decline of Physician Private Practice referenced above). Hospital employment is viewed
favorably by many physicians today and hospitals offering employed positions generally enjoy an
advantage over those that do not.
In addition, health reform promotes the use of Accountable Care Organizations (ACOs), which will
depend on close physician/hospital cooperation to improve quality of care and reduce costs. Physician
employment by the hospital is one way to achieve the strategic, financial, and information technology
alignment between physicians and hospitals that is needed to implement the ACO model and the trend
toward hospital employment of doctors can therefore be expected to continue.
The 2011 Review indicates that Merritt Hawkins represented physician search assignments in 49 states
(all states except Delaware) during the 12-month period from April 1, 2010 to March 31, 2011. Hospitals,
medical groups and other organizations in almost every state found it necessary or desirable to retain
the services of a physician search firm such as Merritt Hawkins, suggesting that physician recruiting
challenges still exist nationwide, even in a recovering economy.
Moreover, 44 percent of Merritt Hawkins’ 2010/11 search assignments took place in communities of
100,000 people or more, while 22 percent took place in communities of 25,000 people or fewer. It is no
longer communities in traditionally underserved rural communities that find it challenging to recruit
physicians. Due to a general physician shortage, particularly in primary care, medical organizations in
communities of all sizes now may at times require the services of physician search firms.
22
WHAT ARE THEY OFFERING?
The 2011 Review indicates that continued demand for family physicians, internists and
pediatricians is having an upward trending effect on financial incentives. Average salaries or
income guarantees offered to family physicians increased from $161,000 in 2006/07 to $178,000
in 2010/11 (an 11 percent increase), while average salaries or income guarantees offered to general
internists increased from $174,000 in 2006/07 to $205,000 in 2010/11 (an 18 percent increase).
Average income offers for pediatricians also have seen gains, from $159,000 in 2006/07 to
$183,000 in 2010/11 (a 15 percent increase).
Though many healthcare facilities scaled back their recruiting efforts during the recession and slow
recovery, they nevertheless found it necessary to increase income offers to physicians in certain specialties
that remain in relatively high demand and are still difficult to recruit, including both primary care and
some specialty areas. Increased salaries also can be a result of hospital efforts to attract physicians to
employed settings.
The 2011 Review indicates that some average income offers increased for specialists such as orthopedic
surgeons, hospitalists, obstetrician/gynecologists, psychiatrists, emergency medicine, pulmonologists,
gastroenterologists, and dermatologists.
Specialties Showing Highest Gain in Income Offers from 2009/10 – 2010/11
2009/2010
2010/2011
% Increase
Urology
$400,000
$453,000
13%
Internal Medicine
$191,000
$205,000
7%
General Surgery
$314,000
$336,000
7%
Invasive Cardiology
$495,000
$532,000
7%
Anesthesia
$331,000
$355,000
7%
Volume/Production Trumps Qualitative/Cost Incentives
Reflecting the growing number of employed physicians, most income packages offered to
physicians today are structured as salaries or salaries with production bonuses. Income guarantees,
which typically are offered to independent, private practice physicians, have become progressively
less utilized in recent years.
Ninety percent of the physician search assignments Merritt Hawkins conducted in 2010/11 offered either
straight salaries or salaries with production bonuses, while only nine percent offered private practice
income guarantees. Seventy-four percent of all search assignments offered a salary with some type
of production bonus. Of these, the majority (52 percent) featured a production bonus calculated on
Relative Value Units (RVUs). RVUs are a metric for determining physician productivity based on work
units performed by a physician, rather than number of patients seen. For example, a physician may be
assigned a larger number of RVUs for examining a patient with acute diabetes than for examining a
patient with a cold.
23
Additional production bonus formulas were calculated on other volume based metrics such as net or gross
physician collections or on number of patients seen. Very few of Merritt Hawkins’ search assignments
featured physician bonuses that reward physicians for improving quality or decreasing costs, despite the
prevailing rhetoric regarding value-based compensation.
Though health reform and market forces are driving the market toward quality and cost based
physician reimbursement, rather than volume or production based, Merritt Hawkins’ 2011 Review
indicates that in the “real world” production and volume continues to trump quality and cost in
calculating physician compensation.
Signing Bonuses and Housing Allowances
Current and past Reviews indicate that the number of hospitals, medical groups and other organizations
offering physician signing bonuses has steadily increased over the last 10 years. In the 1990s, searches
offering signing bonuses were the exception; the 2011 Review indicates that they are now generally the
rule. Signing bonuses were offered in 76 percent of the recruiting assignments Merritt Hawkins conducted
in 2010/11, a number that has remained relatively consistent over the last several years. In general, signing
bonuses are now expected by candidates as a way to address the rising costs of practice relocation.
The following graph illustrates the use of signing bonuses over the last several years.
searches offering signing bonuses
85%
72%
74%
2006/07
2007/08
76%
76%
2009/10
2010/11
58%
46%
2004/05
24
2005/06
2008/09
Signing bonuses offered in 2010/11 averaged $23,790, up marginally from $22,915 the previous year.
Certain other incentives, such as paid relocation, paid CME, health insurance and malpractice insurance
are standard in the majority of Merritt Hawkins’ physician search assignments. The average relocation
allowance offered in 2010/11 was $10,454, up slightly from $10,035 the previous year, while the average
CME allowance in 2010/11 was $3,194, down marginally from $3,335 the previous year.
In addition, 29 percent of Merritt Hawkins’ 2010/11 search assignments featured medical education loan
forgiveness, down from 38 percent the previous year. Educational loan forgiveness entails payment by the
recruiting hospital or other facility of the physician’s medical school loans in exchange for a commitment
to stay in the community for a given period of time. The term of forgiveness in the majority of searches
Merritt Hawkins conducted in 2010/11 (68 percent) was three years; 27 percent of searches offered a twoyear term, and five percent offered a one year term.
The 2011 Review tracks a new physician recruiting incentive: housing allowances. Given the current
volatile real estate market, some physician candidates are unable to leave their current homes in order to
relocate. Housing allowances help pay for their housing in their new location, allowing them the flexibility
to relocate. Such allowances were offered in six percent of the search assignments Merritt Hawkins
conducted in 2010/11, up from less than one percent prior to the economic downturn.
25
SUMMARY
Merritt Hawkins’ 2011 Review of Physician Recruiting Incentives underscores the
fact that the slow economic recovery has had an inhibiting effect on physician
recruiting activity at many hospitals, medical groups and other healthcare
organizations. In addition, “traditional” physician recruiting in the last 12 months
was in some cases supplemented or replaced by physician practice acquisitions or
mergers. Nevertheless, competition for physicians in certain specialties remains
intense, causing average income offers to increase year over year. Demand for
primary care physicians remains particularly strong, as they are seen as the keys to
achieving quality and cost objectives necessary under new delivery models such as
Accountable Care Organizations (ACOs).
Hospital employment of physicians also is increasing as many physicians seek the
security and relative simplicity of an employed position and as many hospitals
seek to form ACOs and other physician-aligned models. However, though physician
compensation is moving toward cost and quality metrics, the 2011 Review indicates
that volume/production remains the standard method for incentivizing doctors.
The 2011 Review suggests that recruiting physicians remains a national challenge,
as Merritt Hawkins conducted search assignments in 49 states in 2010/11. This
challenge is not confined to traditionally underserved rural areas but is prevalent
in communities of all sizes. Health reform, which is projected to add millions of
insured patients to the mix, is likely to exacerbate these trends.
26
Merritt Hawkins’ Additional Surveys
Merritt Hawkins is an AMN Healthcare company. AMN Healthcare is the largest healthcare staffing
organization in the United States. Other surveys conducted by Merritt Hawkins or other AMN
companies include:
• Physician and Health Reform
• Medical Practice: The Physicians Perspective
• Survey of Physicians 50 to 65 Years Old
• Physician Inpatient/Outpatient Revenue Survey
• Survey of Final Year Medical Residents
• Survey of Primary Care Physicians
• Review of Temporary Healthcare Staffing Trends & Incentives
• Review of Temporary Healthcare Staffing Trends & Incentives (Mid-level Providers)
• Survey of Chief Nursing Officers
• Survey of Men in Nursing
• Survey of Travel Nurses
• Survey of Nurse Students
Books Written by Merritt Hawkins:
Will the Last Physician in America Please Turn Off the Lights?
A Look at America’s Looming Physician Shortage, Fourth Edition
©2008 Merritt Hawkins
Merritt Hawkins Guide to Physician Recruiting, Third Edition
©2009 Merritt Hawkins
In Their Own Words: 12,000 Physicians Reveal Their Thoughts on Medical Practice in America.
©2010 The Physicians Foundation
To order these books from the publisher, visit:
www.practicesupport.com, or, for In Their Own Words, www.amazon.com.
For additional information about this survey or other information generated by Merritt Hawkins or
AMN Healthcare, please contact:
Merritt Hawkins / Corporate
5001 Statesman Dr
Irving, Texas 75063
(800) 876-0500
Merritt Hawkins / Atlanta
7000 Central Parkway, NE
Suite 850
Atlanta, GA 30328
(800) 306-1330
Merritt Hawkins / Irvine
19200 Von Karman Ave
Suite 400
Irvine, CA 92612
(800) 288-1210
MerrittHawkins.com
©2011 Merritt Hawkins
27
SPEAKING PRESENTATIONS FROM
MERRITT HAWKINS AND AMN HEALTHCARE
Merritt Hawkins and AMN Healthcare are committed to providing
survey data and other information of use to healthcare executives,
physicians, policy makers and members of the media.
AMN Healthcare offers speakers to address healthcare industry
trends in staffing, recruiting and finance.
Topics include:
* Evolving Physician Staffing Models
* Physician and Nurse Shortage Issues and Trends
* New Strategies for Healthcare Staffing
* Healthcare Reform and Workforce Issues
* Economic Forecasting for Clinical Staffing
* Allied Staffing Shortages
* Vendor Management
* Recruitment Process Outsourcing
* Other topics Upon Request
Our speakers have a combined six decades of staffing experience.
Each speaker offers a unique perspective to educate your
audience and provide new insights into the trends and future of
healthcare staffing.
For more information or to schedule a
speaking engagement, please contact:
Phillip Miller
Phil.Miller@amnhealthcare.com
(800) 876-0500