Recruitment, Retention, and Revenue:
The “Three Rs” of Successful Group Practice Management
As the physician shortage continues, successful retention and recruitment is more important than ever to maintain maximum potential revenue generation.
First, make every reasonable effort to keep quality physicians on staff: you know the devil that you have, and you don’t know the devil that your recruiting effort will produce. Then, do the best you can to ensure that every dollar invested to bring quality candidates in the door is wisely spent. All your expenditures of time and money will be returned tenfold when considered against the financial ramifications of losing a physician for even a brief period.
COSTS OF RECRUITMENT
Consider that the cost of losing a physician affects a practice three ways:
- Lost patient revenue during the period when a physician is not practicing (and the ongoing effect of patient defections);
- Sub-optimal revenue during the period when a new physician is being integrated into the practice; and,
- Revenues spent to recruit and hire a new physician.
That last figure can be the most vexing, especially if the physician you are attempting to replace was a fairly recent hire.
According to the 2017 Medscape Physician Compensation Report, the average physician salary is $294,000. Based on that figure, and a conservative estimate of total recruiting costs as follows:
actual lost patient revenue
+
revenue loss due to patient defection during
the period of practitioner absence
+
sub-optimal revenue during new provider’s
introduction into practice
+
recruiting costs and professional fees
+
potential signing bonuses and/or tuition payments
+
relocation costs
+
site visits
…a twelve-month recruitment effort
following the loss of one physician
can cost a practice
over 2 million dollars in lost revenue.
The financial ramifications of physician loss are also affected by supply and demand. Replacing a family practitioner, for example might cost less than this estimate, whereas losses incurred during a search for an orthopedic surgeon or other high demand specialist may be represented in multiples of the estimated total, depending upon how long the search lasts and particulars unique to each practice’s search.
Also, it is worth considering that today’s specialists require an investment in the cutting-edge equipment to match their cutting edge skills. Abilities that are not utilized will diminish over time, so it is often necessary to provide the tools and ongoing education needed to attract a skilled physician with an environment that offers challenge and an opportunity for growth.
If all goes well and a replacement is hired within 4 to 6 months, it may still be a year before a practice’s revenue stream returns to normal. If the recruiting process is lengthy and takes 12 to 14 months or more, the financial hangover can last for years.
TRY RETENTION FIRST
For this reason, it is critical to work very hard to retain good physicians. First analyze why you wish to discharge a physician, or why a physician wishes to leave the practice. Sometimes, the differences are truly irreconcilable on the basis of personality: you may both have suffered guerilla warfare for longer than you could tolerate. However, sometimes, a minor misunderstanding has been amplified into a major imbroglio, and an effort to resolve the conflict may simply require one party to assert that they may have been too hot under the collar. An apology may be quickly accepted.
Often, the grass simply looks greener elsewhere. Your defector feels the financial opportunity will be better elsewhere. Here, consider the financial exercise above. It is very possible that you will lose revenue and incur costs that are far in excess of the salary increase/bonus (projected over many years) that may be required to keep your colleague in the office.
Now, when all reasonable efforts at retention have been exhausted, try to make good hires. Do not promise the moon. Keep in mind that most candidates who chose to investigate an opportunity have probably seen something in a practice that got them interested in the first place, so there’s no good reason to fabricate information that can only harm your chances of success.
DEALING WITH THE NEW HIRE
However, too often, once they are hired, quality physicians are not treated as highly valued revenue-generating assets. Made to feel like royalty during the recruiting process, they are relegated to second-class citizen status almost as soon as the ink dries on their contract.
Made to feel like royalty during the recruiting process,
[good physicians] are relegated to second-class citizen
status almost as soon as the ink dries on their contract.
Such treatment only succeeds in transforming your prize catch into someone else’s candidate, negating your recruiting investment and setting in motion the negative financial chain of events described.
From a recruiter’s perspective, we speak to countless candidates who are leaving their situations because an employer has not lived up to what was agreed upon during the interview process, or even to what was written into their employment contract. Broken promises and exaggerated opportunity are devastating to morale and retention. One of the most common reasons for conflict between younger physicians and established practices is the failure to live up to promises of admission to partnership at an agreed level of compensation.
Broken promises and exaggerated opportunity
are devastating to morale and retention.
RECRUITMENT STRATEGIES
Successful recruitment and retention is no secret, but merely a result of the faithful application of a number of basic principles. Whether your group practice utilizes an on-staff recruiter, or the services of an outsourced recruiting firm – or both – the following primer is one that can be used as a friendly reminder, or as the outline for a successful plan to help you recruit and retain the best possible staff.
Articulate a vision for your practice. Work with your board and your staff, and get everyone involved in mapping out a course for your group’s success. Be enthusiastic about that vision and be able to communicate that vision to a candidate as well as how the candidate fits into the picture. Your enthusiasm will be contagious, and your candidate will be more apt to want to join an organization with a focus, and where his or her contributions to the plan have been considered and are valued.
Inventory all the things that can be considered either positive or negative about your practice. Include everything from the age of your equipment, your benefits and compensation package, to a detailed profile or the surrounding community. In doing, you’ll have a clearer picture of what you have to offer a candidate, how to best answer questions that might arise, and what improvements you might need to make before launching into a serious recruitment effort.
Articulate a vision for your practice.
Profile your ideal candidate ahead of time so you’ll be able to recognize the individual when you meet. Is your practice in a rural community? Then your candidate should be someone who can operate without a cup of Starbucks every morning. Is your practice located in the north? A winter sports enthusiast might make sense. Would you be better served with someone who enjoys the challenge of helping an underserved community, or are you better able to satisfy a physician who wants to serve in a mentor role?
Plan your recruiting and retention ahead of time. Spur-of-the-moment efforts are rarely successful, are a negative reflection on your practice, and can put-off candidates who might otherwise be interested in joining your group. Consider your inventory, affix your ideal profile, and have a plan that emphasizes the positive aspects your practice offers while catering to the needs of the candidate you want. And be creative! Arrange for a tour of the local community, including schools, recreational facilities, houses of worship, local attractions, etc.; organize an informal barbecue where conversation is encouraged, rather than a formal dinner where your candidate may not have time to relax; make provisions for a spouse who may need help finding new employment, or children who are interested in joining a local sports league.
Practice your approach ahead of time to make certain you haven’t overlooked any details, and evaluate your performance following each interview to allow for any adjustments that you may need to make. Get in the habit of asking open-ended questions that encourage a candidate’s candor, rather than questions that can be answered with a “yes” or “no.” However, be careful not to stray into personal areas. Run your questions by your human resources executive or consultant to prevent embarrassing faux pas.
Honesty in recruiting should be your constant watchword.
Honesty in recruiting should be your constant watchword. Obfuscating negative details by avoiding certain issues, painting too rosy a picture, or giving outright false information will only harm you – and negatively impact retention. If you know your on-call policy is demanding, say so, but explain that your current recruiting effort is part of a plan to alleviate those demands (if that’s the truth). If your equipment is a little out-of-date, don’t deny the obvious, but explain to your candidate how you are addressing the issue. And be prepared to explain why other candidates may have left the group.
Disclose everything that is pertinent to the candidate. One of the biggest mistakes an employer can make is to willfully withhold information about, or sugarcoat the scenario a candidate is considering. The site visit should be a 2 to 3 day culmination of both the candidate’s and the practice’s discovery process, and the best way to ensure success is through full disclosure. If you are looking for a candidate to eventually become a partner in the practice, transparency is critical. Letters of confidentiality can be signed if necessary, but the last thing you want is for the candidate to accept the opportunity under false pretenses. If there is a partnership track, explain to the candidate what requirements there are prior to a partnership offer. Also, be prepared to write a contract that accurately reflects the verbal commitment made to the candidate. Share overhead numbers. If they are out of line, articulate the action plan in place to resolve the high overhead percentages.
The temporary pain of going without a physician…
is preferable to dealing with the problems of making a bad hire
Don’t Settle for a candidate who doesn’t fit your realistic, if not ideal, profile. The temporary pain of going without a physician while you are searching for the individual with solid long-term prospects is preferable to dealing with the problems of making a bad hire. You need more than a warm body, you need a physician who can help your practice thrive and who can become indispensable to the vision you have for your practice.
Don’t think that just because you’ve found and hired your ideal candidate, the work is over; in fact, the opposite is true. The foundation for a successful physician retention program starts with a solid recruitment strategy, but once the recruitment is complete, keeping good candidates on-staff is the never-ending quest of any successful group practice manager.
Every practice is different, and there is no one formula to ensure management success but as an extension of a successful recruiting investment; there are two key guidelines that can help increase the overall retention rate of your group practice.
Follow-Through on your promises, and work every day to demonstrate that the vision your candidate signed on to is progressing. Strive to make certain that every aspect of your recruiting effort is completed.
Communication is essential to building trust. There will be times when the best of intentions and good-faith efforts fail to live up to commitments made in the recruiting process. Explain why things worked out the way they did and what is being done to remedy the situation or to serve as a substitute. Involve the new hire – and everyone – in the process in order to encourage a continued spirit of team and cooperation, while preventing isolation and a sense of betrayal.
The end result of a solid, successful plan to recruit and retain good physicians is quality service and sustained revenue. Without enough physicians on staff, your practice cannot generate sufficient revenue. Good physicians that remain in your practice are the foundation for growing revenues and expanding services. A failure to recruit and retain quality candidates means constantly chasing the revenue tail.
10 REASONS WHY RETENTION MAKES SENSE
A solid recruitment and retention strategy produces ten positive results:
- Reduces Expenses by thousands of dollars not spent marketing your group’s available positions.
- Encourages Unity among your medical staff by giving members time to build solid working relationships with peers.
- Enhances Image of your practice through patient retention and word-of-mouth without spending money on marketing and public relations.
- Reduces Stress by eliminating the need to constantly find replacement physicians for the practice.
- Builds Respect for practice management who gain a reputation for finding and keeping good physicians
- Reduces Exodus of patients whose trusted physician leaves and either takes them to the new practice, or causes them to find a new physician while you are looking for a replacement.
- Enables Growth by giving your practice the stable base it needs to expand rather than being pre-occupied with filling holes.
- Increases Market share by building long-lasting relationships with physicians who attract a loyal, growing patient base.
- Builds Morale among staff that can focus on their responsibilities rather than fill in for former colleagues.
- Makes it Easier to remember names when staff members stick around for a while.
status almost as soon as the ink dries on their contract.
Such treatment only succeeds in transforming your prize catch into someone else’s candidate, negating your recruiting investment and setting in motion the negative financial chain of events described.
From a recruiter’s perspective, we speak to countless candidates who are leaving their situations because an employer has not lived up to what was agreed upon during the interview process, or even to what was written into their employment contract. Broken promises and exaggerated opportunity are devastating to morale and retention. One of the most common reasons for conflict between younger physicians and established practices is the failure to live up to promises of admission to partnership at an agreed level of compensation.
Broken promises and exaggerated opportunity
are devastating to morale and retention.
RECRUITMENT STRATEGIES
Successful recruitment and retention is no secret, but merely a result of the faithful application of a number of basic principles. Whether your group practice utilizes an on-staff recruiter, or the services of an outsourced recruiting firm – or both – the following primer is one that can be used as a friendly reminder, or as the outline for a successful plan to help you recruit and retain the best possible staff.
Articulate a vision for your practice. Work with your board and your staff, and get everyone involved in mapping out a course for your group’s success. Be enthusiastic about that vision and be able to communicate that vision to a candidate as well as how the candidate fits into the picture. Your enthusiasm will be contagious, and your candidate will be more apt to want to join an organization with a focus, and where his or her contributions to the plan have been considered and are valued.
Inventory all the things that can be considered either positive or negative about your practice. Include everything from the age of your equipment, your benefits and compensation package, to a detailed profile or the surrounding community. In doing, you’ll have a clearer picture of what you have to offer a candidate, how to best answer questions that might arise, and what improvements you might need to make before launching into a serious recruitment effort.
Articulate a vision for your practice.
Profile your ideal candidate ahead of time so you’ll be able to recognize the individual when you meet. Is your practice in a rural community? Then your candidate should be someone who can operate without a cup of Starbucks every morning. Is your practice located in the north? A winter sports enthusiast might make sense. Would you be better served with someone who enjoys the challenge of helping an underserved community, or are you better able to satisfy a physician who wants to serve in a mentor role?
Plan your recruiting and retention ahead of time. Spur-of-the-moment efforts are rarely successful, are a negative reflection on your practice, and can put-off candidates who might otherwise be interested in joining your group. Consider your inventory, affix your ideal profile, and have a plan that emphasizes the positive aspects your practice offers while catering to the needs of the candidate you want. And be creative! Arrange for a tour of the local community, including schools, recreational facilities, houses of worship, local attractions, etc.; organize an informal barbecue where conversation is encouraged, rather than a formal dinner where your candidate may not have time to relax; make provisions for a spouse who may need help finding new employment, or children who are interested in joining a local sports league.
Practice your approach ahead of time to make certain you haven’t overlooked any details, and evaluate your performance following each interview to allow for any adjustments that you may need to make. Get in the habit of asking open-ended questions that encourage a candidate’s candor, rather than questions that can be answered with a “yes” or “no.” However, be careful not to stray into personal areas. Run your questions by your human resources executive or consultant to prevent embarrassing faux pas.
Honesty in recruiting should be your constant watchword.
Honesty in recruiting should be your constant watchword. Obfuscating negative details by avoiding certain issues, painting too rosy a picture, or giving outright false information will only harm you – and negatively impact retention. If you know your on-call policy is demanding, say so, but explain that your current recruiting effort is part of a plan to alleviate those demands (if that’s the truth). If your equipment is a little out-of-date, don’t deny the obvious, but explain to your candidate how you are addressing the issue. And be prepared to explain why other candidates may have left the group.
Disclose everything that is pertinent to the candidate. One of the biggest mistakes an employer can make is to willfully withhold information about, or sugarcoat the scenario a candidate is considering. The site visit should be a 2 to 3 day culmination of both the candidate’s and the practice’s discovery process, and the best way to ensure success is through full disclosure. If you are looking for a candidate to eventually become a partner in the practice, transparency is critical. Letters of confidentiality can be signed if necessary, but the last thing you want is for the candidate to accept the opportunity under false pretenses. If there is a partnership track, explain to the candidate what requirements there are prior to a partnership offer. Also, be prepared to write a contract that accurately reflects the verbal commitment made to the candidate. Share overhead numbers. If they are out of line, articulate the action plan in place to resolve the high overhead percentages.
The temporary pain of going without a physician…
is preferable to dealing with the problems of making a bad hire
Don’t Settle for a candidate who doesn’t fit your realistic, if not ideal, profile. The temporary pain of going without a physician while you are searching for the individual with solid long-term prospects is preferable to dealing with the problems of making a bad hire. You need more than a warm body, you need a physician who can help your practice thrive and who can become indispensable to the vision you have for your practice.
Don’t think that just because you’ve found and hired your ideal candidate, the work is over; in fact, the opposite is true. The foundation for a successful physician retention program starts with a solid recruitment strategy, but once the recruitment is complete, keeping good candidates on-staff is the never-ending quest of any successful group practice manager.
Every practice is different, and there is no one formula to ensure management success but as an extension of a successful recruiting investment; there are two key guidelines that can help increase the overall retention rate of your group practice.
Follow-Through on your promises, and work every day to demonstrate that the vision your candidate signed on to is progressing. Strive to make certain that every aspect of your recruiting effort is completed.
Communication is essential to building trust. There will be times when the best of intentions and good-faith efforts fail to live up to commitments made in the recruiting process. Explain why things worked out the way they did and what is being done to remedy the situation or to serve as a substitute. Involve the new hire – and everyone – in the process in order to encourage a continued spirit of team and cooperation, while preventing isolation and a sense of betrayal.
The end result of a solid, successful plan to recruit and retain good physicians is quality service and sustained revenue. Without enough physicians on staff, your practice cannot generate sufficient revenue. Good physicians that remain in your practice are the foundation for growing revenues and expanding services. A failure to recruit and retain quality candidates means constantly chasing the revenue tail.
10 REASONS WHY RETENTION MAKES SENSE
A solid recruitment and retention strategy produces ten positive results:
- Reduces Expenses by thousands of dollars not spent marketing your group’s available positions.
- Encourages Unity among your medical staff by giving members time to build solid working relationships with peers.
- Enhances Image of your practice through patient retention and word-of-mouth without spending money on marketing and public relations.
- Reduces Stress by eliminating the need to constantly find replacement physicians for the practice.
- Builds Respect for practice management who gain a reputation for finding and keeping good physicians
- Reduces Exodus of patients whose trusted physician leaves and either takes them to the new practice, or causes them to find a new physician while you are looking for a replacement.
- Enables Growth by giving your practice the stable base it needs to expand rather than being pre-occupied with filling holes.
- Increases Market share by building long-lasting relationships with physicians who attract a loyal, growing patient base.
- Builds Morale among staff that can focus on their responsibilities rather than fill in for former colleagues.
- Makes it Easier to remember names when staff members stick around for a while.
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