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Residents' desire for hospital employment poses recruiting challenge for practices

Interest is waning for group practices that don't offer quick paths to partnerships, while the pursuit of solo practice is nearly nonexistent.

By — Posted Oct. 24, 2011

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Physicians looking to bring current residents into their practices are going to find them asking for stability and quality of life -- that is, if they can find one interested in something other than hospital employment.

"Even in a stagnant economy, new doctors are being recruited like blue-chip athletes," said James Merritt, founder of the physician recruiting firm Merritt Hawkins & Associates in Irving, Texas. "There are simply not enough physicians coming out of training to fill all the available openings."

The situation is reversed from a decade ago, when residents barely showed interest in hospital employment. Of 302 residents nearing the end of their training, hospital employment is the most popular choice for a practice setting, according to a Merritt Hawkins survey released Oct. 5. The survey said 32% of residents would be most open to this possibility. This was true for only 3% in 2001. Meanwhile, the same percentage of residents -- 10% each -- were interested in employment with a single-specialty or multispecialty group. In 2001, those numbers were 24% and 28%, respectively.

Merritt Hawkins has surveyed residents for the past decade. Recruiters consider the results indicative of overall marketplace trends about physicians starting their careers.

Some residents still have an entrepreneurial bent -- 28% are seeking a practice partnership, up from 21% in 2001 -- but the terms have changed. Residents want a quick path to partnership, some free time and financial security.

"The physicians who want to be in a partnership, these are the physicians who used to go to the bank, get a loan and hang a shingle," said Troy Fowler, Merritt's divisional vice president. "Now they're looking for partnership with some stability where it is possible to buy into the surgery center or the imaging center. ... Physicians want a share of the practice within one to two years. They don't want to be employed with no shot for partnership."

Because physicians are in such short supply, particularly in primary care, residents can do more than ask for what they want. They can get it. Practices may have to redesign positions to attract them and compete with other entities that are recruiting, analysts said. Small practices, in particular, may have to go to significant lengths to attract a new physician.

"The most important items would be the ability to show a stable, growing practice and quality of life," Fowler said. "The stability would come from a practice that generates most of their collections from commercial insurance, as Medicare cuts are looming. The ideal quality of life would be a four-day workweek with little to no call. Financially, they would need to offer employment plus production bonus and would need to be above the 50th percentile for their specialty."

In this year's Merritt Hawkins survey, only 6% said they would prefer their compensation to be structured as an income guarantee, while 78% wanted a salary with a production bonus.

These trends are due in part to the fact that residents owe significant sums of money for their education when they finish training. Newly minted physicians have to earn a certain amount to make required payments, but the rollout of health system reform has created a great deal of uncertainty about whether they will be able to do so in certain practice settings.

The proportion of residents who said a good financial package was most important when considering their first practice grew from 46% in 2008 to 56% in 2011. The proportion of residents in the survey who said they owed $200,001 to $250,000 in student debt grew from 7% in 2003 to 19% in 2011. According to the Assn. of American Medical Colleges, 28.1% of medical school graduates owed at least $200,000. The percentage was 3.1 in 2001.

"While we have not seen this new study, as a young physician myself, I am acutely aware of the challenges facing physicians, both young and old," said Steven J. Stack, MD, chair-elect of the American Medical Association. "Young physicians value their time with patients, but they are grappling with our broken medical liability system, large medical student debts, threats of Medicare and Medicaid payment cuts, burdensome regulations and insurance company hassles."

More physicians also want or need flexible work arrangements such as part-time hours. This is more possible in an employment arrangement with a hospital or large practice.

"The generational differences, along with reform, and the extreme shortage of doctors have all literally combined and formed the perfect storm," Fowler said.

For example, 48% of residents were most concerned about the availability of free time in 2011 when entering their first professional practice. This number was only 33% in 2008. In addition, 28% surveyed in 2008 said adequate call coverage was the most important factor when considering a practice opportunity. This went up to 68% in 2011. About 64% of residents in 2011 said lifestyle was a top priority. This question was not asked in 2008.

"There's a strong desire for work-life balance, more leisure time, more family time," said Stoney Abercrombie, MD, president of the Assn. of Family Medicine Residency Directors. "They're willing to work but have not bought into that myth that you have to kill yourself to be successful. Residents are looking at more part-time positions, but it's very difficult in a single or small practice if you're not working full time."

Small practices in rural areas will find it even tougher to recruit. Eighty-one percent of residents said geographic location was the most important factor when considering practice opportunities, and 28% wanted to work in communities with more than 1 million people. Only 6% wanted to work in communities smaller than 50,000. In 2001, those numbers were flipped -- 21% wanted to work in a community with fewer than 50,000 people, and only 6% wanted to work in an urban area with more than 1 million people.

Solo practice also is fading in popularity. In 2001, 8% of residents said they would be most open to working in that type of setting. That number dropped to 1% in this year's survey.

"The days of the solo practitioner are over," said Michael Ehlert, MD, chair of the residents and fellows section of the Michigan State Medical Society. "They may live on in the rural areas or even suburban areas, but I see more people looking to work for a group of 10 physicians or more so they don't have to do as much of the business." Dr. Ehlert is a fourth-year urology resident at the Henry Ford Health System in Detroit. He said he would like to enter an academic or large group practice when he is finished with his training.

The increasing competition for newly minted residents is reflected in Merritt Hawkins' numbers regarding their contact from employment recruiters.

In 2003, the first year Merritt Hawkins asked about contacts with recruiters, 68% said they received 51 or more -- 25% of residents received 51 to 100 contacts, and 43% got more than 100. In 2011, 78% received 51 or more -- 31% of residents had 51 to 100 contacts, and 47% had more than 100.

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ADDITIONAL INFORMATION

Group practice fades in popularity

Merritt Hawkins, a physician-staffing company based in Irving, Texas, asked residents to select their most desired work setting. Becoming a hospital employee is a much more popular choice than it was 10 years ago, but a majority of final-year medical residents still prefer to work in a solo or group practice.

Practice setting20112001
Hospital32%3%
Partnership28%21%
Single specialty group10%24%
Multispecialty group10%28%
Outpatient clinic6%8%
Academic2%N/A
Locum tenens1%3%
Solo1%8%
Association<1%0%
HMO<1%1%
Unsure9%N/A
OtherN/A4%

Source: 2011 Survey of Final-Year Medical Residents, Merritt Hawkins & Associates, Oct. 5

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What worries first-time doctors

Most want time for themselves and their families and are concerned about dealing with payers and malpractice. But today's final-year medical residents are less concerned about their educational debt or ability to find a practice than their counterparts of a few years ago.

WorryMost
concerning
Somewhat
concerning
Least
concerning
201120082011200820112008
Availability of free time48%33%45%46%7%22%
Dealing with payers42%13%45%44%13%43%
Earning a good income41%38%47%45%12%18%
Malpractice40%32%44%37%16%31%
Health system reform39%N/A47%N/A14%N/A
Educational debt30%60%36%14%34%27%
Ability to find a practice24%41%34%38%42%21%
Insufficient practice management knowledge22%4%57%47%21%49%
Insufficient medical knowledge7%30%25%24%68%46%
Dealing with patients2%4%15%35%83%42%

Source: 2011 Survey of Final-Year Medical Residents, Merritt Hawkins & Associates, Oct. 5

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Location tops list of must-haves

Adequate call coverage and personal time are increasing in importance for final-year medical residents who are considering their first employment opportunity.

Must-haveMost
important
Somewhat
important
Least
important
201120082011200820112008
Geographic location81%57%19%12%0%31%
Adequate call/coverage/personal time68%28%31%53%1%19%
Lifestyle64%N/A34%N/A2%N/A
Good financial package56%46%42%41%2%13%
Proximity to family52%30%35%37%13%33%
Good medical facilities/equipment44%23%51%43%5%34%
Specialty support31%17%54%51%15%32%
Low malpractice area16%33%58%31%26%36%
Education loan forgiveness12%42%38%24%50%34%

Source: 2011 Survey of Final-Year Medical Residents, Merritt Hawkins & Associates, Oct. 5

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