Recruiting healthcare professionals is a top priority for any hospital or health system, but too often, those efforts are formulaic rather than strategic. In this Guide, we show you how to implement a recruitment plan that accounts for maintenance, compliance, and growth.
There is nothing easy or cheap about recruiting healthcare professionals. Depending on specialty, geography, and more, the process can run 6-12 months and cost well over $100,000 for a single physician. A simple calculation of population-to-provider ratios doesn’t begin to satisfy the most basic compliance requirement for a nonprofit hospital – much less account for internal strategic priorities or the external forces of healthcare transformation.
From a financial perspective, provider planning and recruitment has an outsized impact on the bottom line. A single orthopedist or neurosurgeon can generate more than $2.5 million in annual net revenue, while an internist or nurse practitioner is the human portal that draws customers into the vast hospital ecosystem and keeps them there. Not enough providers to meet demand? Customers will inevitably go elsewhere, taking their dollars with them.
With so much at stake, it pays to have an airtight plan for recruiting healthcare professionals – something that will look a little different in every setting. At Ascendient, we tailor each engagement to the client’s unique situation and environment, but there are a few best practices that we consider non-negotiable for provider recruitment. However you get there, and whomever you choose to help, here are the three areas that must be included in any comprehensive plan:
Maintenance is focused on internal demographics. Succession planning charts the retirement trajectory of your existing providers to ensure that your talent pipeline can support current service levels. The Covid pandemic, as we’ll discuss, has likely accelerated the retirement timeline for many providers, and the best succession planning will include the revenue implications of those exits.
Compliance is likewise focused on demographics – in this case, the demographics of your Stark-defined service area. For nonprofit hospitals and systems, a Community Needs Assessment is the bedrock data that underlies your entire recruiting plan.
Growth is where your strategy comes into play. Yes, the market is changing all around you, but you’re not drifting passively with the tide. Your organizational strategy has established a point on the horizon toward which you’re trying to navigate, and a fully aligned recruitment plan helps to ensure that you have the talent to get there.
Based on the many engagements we’ve completed in the past 25+ years, we can confidently say that most hospitals and health systems aren’t accounting for today’s best practices in recruiting healthcare professionals – much less considering the vast changes coming as a result of healthcare transformation. This Guide will focus only on today; we’ll deal with tomorrow in a coming installment.
Our hope is that healthcare leaders will assess their current plans with an eye to filling gaps and fixing omissions. Without that solid base, it will become exponentially harder to adjust in a timely manner to the trends in technology, payment, and consumer demand that are sure to shift the most basic recruiting assumptions in the near future.
Maintenance: Succession Planning
For any nonprofit hospital or system, healthcare is a mission – but a fiercely competitive one. In order to survive, hospitals need to maintain market share, at the very least, and that requires service levels that are steady and predictable. Succession planning is the key to avoiding the kind of unwelcome provider shortages that force customers to look elsewhere for care. Succession planning also figures prominently in both compliance and growth, so we consider this perhaps the most fundamental aspect of recruiting healthcare professionals.
Age, of course, is the primary consideration here. For each specialty that you offer, you’ll want to know the average age of your providers plus the percentage of providers over age 60. The latter figure is often overlooked, but we find it is a key indicator of urgency: For any specialty with greater than 20% of professionals aged 60 and up, you’re likely to face multiple exits at one time, and that can complicate recruitment efforts.
To further prioritize your recruitment efforts, we suggest layering on the revenue implications of upcoming retirements: In each specialty identified for aggressive recruitment (the upper right quadrant of your scatterplot), use historical billing data to estimate the net revenue impact for each departing FTE, then multiply by the number of retirements within that specialty. This extra step is a good reminder of what’s at stake in your recruitment planning, and it can help put recruiting costs into perspective.
Due to the high cost of “downtime” between providers, it’s important to keep an eye on the clock in succession planning. Depending on the specialty, recruitment efforts should get underway 12 to 24 months before an anticipated retirement. If the recruitment process goes more smoothly than expected, a generous lead time means you could begin onboarding a new provider before the incumbent is fully retired – a scenario that both parties should be aware of.
Obviously there are added costs in this overlap period, but if you’ve taken the time to calculate revenue implications as outlined above, then the risk/reward proposition should be more clear cut.
In normal times, the above steps would likely have produced a clear and reliable picture of impending retirements, but the Covid-19 pandemic has added a layer of uncertainty that goes beyond demographics. Much has been written on pandemic burnout among healthcare providers, and we are only just beginning to see the implications. For specialties with a higher degree of Covid-19 patient interaction – infectious disease, pulmonology, cardiology, anesthesiology, etc. – we anticipate a possible jump in early retirements.
Given the emerging nature of this trend, we are skeptical that any model can capture its real impact. Our advice is: Look for billing spikes linked to pandemic hours, and start interviewing those providers to better understand their state of mind and future plans. Creating a safe space for these conversations will be key, and providers may be more forthcoming in interviews conducted by a third party.
For specialties with a higher degree of Covid-19 patient interaction – infectious disease, pulmonology, cardiology, anesthesiology, etc. – we anticipate a possible jump in early retirements.
Compliance: The Community Needs Assessment
Most nonprofit hospitals and health systems use a community needs assessment as the basis for recruiting healthcare professionals, if for no other reason than the IRS demands it. But too often, these assessments rely on facile ratios of population to professionals, without answering the all-important question of how healthcare services are actually consumed in the market. To better understand consumption, the following research is needed:
First, review previous medical staff plans and look for assumptions that proved wrong. No forecast is 100% accurate, and it pays to know where reality diverged from models in the past. Did community demographics shift in unexpected ways? Did demand for specific services fail to match expectations? Identifying past surprises can help to avoid future surprises. “Fool me once…” as the saying goes.
Next, develop a demographic profile for your community. A detailed understanding of factors such as age, gender, and ethnicity is the only way to accurately forecast demand for specific services. Poverty statistics are also important, because the IRS is specifically concerned with the supply of physicians serving indigent and Medicaid patients.
Armed with this demographic portrait, you can apply standard industry benchmarks to determine how many FTEs are needed to service your market’s unique population mix. In a coastal retirement community, for instance, cardiology will be in high demand, while a growing suburb dominated by young families will require more OB/Gyns. These two communities might have the exact same number of residents, but demographics will drive very different levels of demand – one more reason that straight provider-to-population ratios can be so deceiving and unhelpful.
Third, develop a provider profile – both internal and external. Once you know the demographics of your community, it’s time to see how the physician supply matches up. In addition to basics like specialty and age, you’ll want to measure factors such as productivity and availability of physician extenders. And remember that location doesn’t tell you everything. A professional may live and practice primarily in your service area but devote a portion of his or her time to a neighboring market. Adjusting FTEs to account for time out-of-market can significantly alter the balance of supply and demand.
Fourth, use your succession planning data to account for upcoming changes to your provider profile. If you’ve done the work described in the preceding section, it should be easy to predict how retirements will alter the balance in supply and demand.
Finally, conduct blind “shopping” research to understand consumer realities. How long does it take to make a first appointment to see a primary care provider or specialist? Put yourself in the consumer’s shoes and try booking appointments for every provider type at your facility and at competing hospitals. Online booking is a good start where it’s offered, but you’ll want to book by phone as well, since many of your prospective patients likely don’t have the necessary access or proficiency to use digital tools.
For each professional type or specialty, we find it helpful to note the range of observed wait times along with an average, expressed in weeks. For most markets, any wait longer than four weeks shows that the community currently is under-supplied for that provider type, while a wait time between two and four weeks should be a flag for potential problem areas.
The chart below, for instance, is adapted from an actual client engagement. Average wait times offer the clearest signal of supply constraints, but the range of wait times in the far-right column is an often-overlooked data point that might tip a particular specialty (gastroenterology, in this case) from “wait and see” to “act now” status.
Putting it all together: With enough data on supply, demand, and consumption of healthcare services in your Stark-defined service area, you can pinpoint the physician specialties that are eligible for recruitment using tax-exempt funds. Signing bonuses, income guarantees, malpractice “tail” coverage, and more – you can’t use the most effective incentives without a fully compliant Community Needs Assessment, so it’s worth taking the time to get it right.
Growth: Aligning Recruitment and Strategy
Recruiting plans focused on maintenance and compliance are essential to survival, but they are only a start – “necessary but not sufficient,” in terms of logical relation. As demographic snapshots, these plans capture today’s market and today’s workforce, but they do little to account for changes in the status quo (other than near-term retirements). Healthcare consumers can be a fickle bunch, and competition is constantly altering the landscape.
Forward-looking hospitals and health systems will have a strategy in place to grow consumer demand and fend off competition. Those strategies typically will fall into one of three buckets:
- Raise market share/volume in key services of interest; and/or
- Support the offering of new/expanded services; and/or
- Support the customers residing in outlying sub-markets.
It’s worth saying here that recruiting healthcare professionals with growth in mind is quite different from recruiting that's focused on compliance – starting with geography. The Federal government has rigid rules for constructing your Stark-defined service area, but strategy has no such boundaries. While Stark rules analyze the zip codes contributing 75% of a hospital’s admissions (or 90% for rural facilities), you are free to define your growth market any way you choose. This is why the Community Needs Assessment gives you only the most rudimentary understanding of your true recruitment picture – because “community” is artificially bounded in ways that don’t reflect the actual dynamics or opportunities in your market.
If you’ve done the hard work of building a professional recruitment plan that covers maintenance and compliance, then you already know how many new hires you’ll need to hire to “stay the course.” When it comes to a growth plan, the first question is: How much do we hope to grow? Most strategic plans include targets for moderate vs. dynamic growth in market share, so an aligned recruiting plan will quantify the number of providers needed for each growth band.
The two charts on page 9 help to illustrate the connection between strategic growth targets (expressed as market share) and recruiting needs (expressed as specialist FTEs).
If your market share targets look like this:
... then your professional recruitment targets might look like this:
Three important points from the example above, which we’ve adapted from an actual client:
- Significant hiring might be needed simply to “stay the course,” due to anticipated provider exits and changes in your market demographics.
- A growth hiring plan is typically narrower than a plan focused on maintenance or compliance. In this case, the client’s strategic plan called for growth in a few high-value surgical specialties, so the hiring plan focuses on just those areas.
- When calculating current supply, it’s important to estimate the actual time a provider spends in your facility – especially for independent professionals and for hospitals that are part of a system.
Conclusion
Despite all the advances in medical technology, healthcare is still a person-to-person business, and human capital is still the most important driver of success – both in financial terms and in terms of health outcomes. Keeping a steady supply of qualified providers is a never-ending task that requires both a tactical and strategic mindset. We recommend that clients think of their business needs in three big buckets – maintenance, compliance, and growth – then develop an integrated recruiting plan to maximize efficiency and impact.
Remember our recruitment pyramid at the start of this report? It’s important to build that structure – starting today – to ensure success for the next five years. Beyond that, we believe in scanning the environment for long-term trends that will fundamentally change the way healthcare services are provided and consumed. Even the strongest pyramid can be engulfed by shifting sands or encroaching jungle, so you can't rest on your laurels when it comes to recruiting healthcare professionals.
