3. Overview Why do physician join practices?
What matters to them
Residents vs experienced
Replacing a position (ie retirement)
Conclusion – Questions & Answers
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4. Reasons Physicians Join Practices
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Financial
•Assured a steady paycheck
•Income guarantees and sign-on bonuses
•Benefits
•Paying off medical education debt – Average of $140,000
•Start-up capital provided from the group or hospital
Lifestyle
•Work/Life Balance
•Time off
•Sharing Call
•Family
•Geographic Location
5. Reasons Physicians Join Practices
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Positive Group Dynamics
•Access to patients and cases
•Mentoring and clinical support from experienced partners
•Focus on patient health condition they want to specialize
•Flexible work options
•Being included in group managed-care contracts
•Coding and billing procedures are established
•Favorable malpractice coverage
•Access to technology
6. Reasons Physicians Join Practices
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Physician’s want to Avoid:
•Financial uncertainty of operating their own practice
•Medical uncertainty of operating their own practice
•Many do not have the skill set needed to manage practice themselves
•Administrative time required to run the practice
•Managed care contracting
•Keeping up with government regulations
7. Deciding Factors 25-Year Perspective
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2012
2007
1987
1
Overall Lifestyle of area
Overall Lifestyle of area
Hospital Facilities
2
Potential Income
Potential Income
Potential Income
3
Immediate Income
Immediate Income
Overall Lifestyle of the Area
4
Flexible/Fewer Work Hours
Less Call Rotation
Not on Survey
5
Less Call Rotation
Favorable Malpractice Rates
Not on Survey
6
Desirable Partnership
Flexible/Fewer Work Hours
Not on Survey
*Jackson & Coker Industry Report – September 2012
8. Deciding Factors 25-Year Perspective
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2012
2007
1987
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Spouses’ Preference
Climatic Condition
Spouses’ Preference
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Hospital Facilities
Recreational Opportunities
Climatic Conditions
9
Favorable Malpractice Rates
Preference for Urban/Rural Location
Desirable Partnership
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Climatic Conditions
Contact with Other Physicians
Contact with Other Physicians
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Recreational Opportunities
Spouses’ Preference
Recreational Opportunities
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Contact with Other Physicians
Hospital Facilities
Immediate Income
*Jackson & Coker Industry Report – September 2012
9. Other Changes…
•Physicians are more mobile than ever – physician turnover was 6.2% in 2008
•38% of all physicians are 50 years or older
•Of the 21,000 cardiologists, 75% are over 45 years old
•Physician’s are in demand – Estimated shortage of 85,000 – 200,000 physicians by 2020
•85% of hospitals are recruiting physicians
•Due to the aging physician workforces, an estimated 23,000 are expected to retire or leave the practice of medicine. The number of physicians graduating from medical schools has remained stable at 16,000 since 1980.
Deciding Factors 25-Year Perspective
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10. Competitive pay to experienced partners
“Controlled lifestyle” with generous time off
In high demand
Younger physicians work 10% fewer hours
Per the AMA, > 50% of U.S. medical resident graduates are female
•Female physicians work 18% fewer hours
Younger Physicians
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11. Focused on developing skills rather than sacrificing for an extended partnership track
•Time-to-partnership – Two years and decreasing
•Unwillingness to buy-in to a Practice Willing to relocate due to the spouse’s career
Tend to spend more time with patients
Want access to the latest technology
Have seen their parents or other adults laid off
•Skeptical of organization loyalty
Younger Physicians
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12. 51% plan/want to leave the patient care setting or reduce number of patients seen
8% plan to retire in three years
10% want to transfer to non-clinical job (teaching)
17% are considering closing their practice to new patients
Many are going to part-time in groups – or locum tenens
Experienced Physicians (Aged 50 – 65)
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13. Practices are also offering incentives for their senior physicians to stay
•AMGA survey respondents – 62% believed that physicians were delaying retirement because of the economy
•73% of practices allowed pre-retirement physicians to reduce hours
•56% allowed for these doctors not to be on-call
•20% allowed for specialization in the group
•Other options included extending vacations up to several months
•Volunteer or mission work
Do Physician really retire?
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14. Physicians are frustrated
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Declining reimbursement
Business complexities
Overhead and cost of doing business high
15. Physicians are frustrated
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Denied claims
Appealed claims
Timely filing of claims
Program audits of Medicare/Medicaid
16. Physicians are frustrated
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Urgent Care Centers are taking non- chronic
High Deductible plans are decreasing volumes
Managed care rates are not increasing
Practices are being excluded from managed care networks
17. Definition of working is changing
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Hospital employment
Single or multi-specialty practice owned by hospital or health system
Independent contractor or locum tenens
Non-clinical teaching position
Non-clinical administrative position
18. Immediately, costs go up for the remaining physicians
•Fixed costs remain
•Debt service remains
•Production can do down for the practice Difficult choices are required
•Closing offices
•Cutting staff
•Cutting other staff
Transition to recruiting a physician
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19. Cost of tail coverage – can be $100,000 for a specialist in high cost region Legal and financial obligations follow (debt related to recruitment, excess office space, rental agreements, etc.) Operating loss while new physician builds practice Loss of patient referrals Patients needing a new physician – who may not stay with the group
Impact of the loss of a Physician
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20. Recruiting replacement physician results in lengthy and expensive process
Recruiter expense
Site visits
Relocation
Sign on incentives
Salary guarantees
Office set-up costs
Recruitment is a expensive
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21. Clear understanding of compensation Strong, perceptive physician leader of group. Mentoring recent graduates is critical to their success and fitting into the practice group culture
Commitment to organized and structured meetings and being engaged and making contributions
Be Transparent – disclose everything that would impact the physician finances or work environment Give them a voice on decision making Well managed Practice with productive staff
What can you do?
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