In fact, says Janis Yergan, vice president of strategy and business development with Providence Medical Center in Kansas City, KS, many physicians in lucrative specialties actually want to be employed by hospitals.
“I was somewhat surprised,” she says. “What I’m finding here in Kansas is that the physicians look at employment as a very viable option.”
It’s been a pleasant surprise for Yergan, recruited to Providence last November from a post with Catholic Healthcare West in Los Angeles—in a state where corporate physician practices rule the roost and hospitals don’t employ physicians.
But California aside, hospitals that can employ specialists are moving resources toward that goal these days for good reason: They bring a lot of cash to the bottom line. Where are hospitals getting the best bang for their buck? According to a recent survey of hospital chief financial officers, invasive cardiologists top the list; the periodic survey shows that each one brings an average of more than $2.6 million in annual revenue to the hospital where they work, and receive an average salary of about $342,000. Given those numbers and similar returns for other specialists, hospitals’ eagerness to sign employment contracts with physicians is not surprising. What is somewhat of a surprise is the number of specialists who want that contract, says Phil Miller, vice president of communications at Irving, TX-based Merritt, Hawkins & Associates, a physician recruitment company that researched more than 17 specialties, their average contribution to hospital revenue and average salaries.
“The idea of recruiting primary-care docs as kind of a loss leader is a vestige of the golden era of managed care,” he says. Indeed, the model is upside down today compared with the early part of the decade, when primary-care doctors made up 75 percent of Merritt-Hawkins’ recruitment business. “In our own recruitment early in this decade all the emphasis was on primary care because they felt the gatekeeper model was going to be prevalent. But now specialties are where it’s at.”
Perhaps that’s because of the substantial revenues they bring to hospitals and their outpatient facilities. According to the Merritt-Hawkins 2007 physician inpatient/outpatient revenue survey completed by 119 hospital CFOs, many doctors seem to have embraced this employment trend for many reasons—perhaps the least of which is money.
“If you provide the right situation that allows them enough challenge in their clinical delivery, that’s a key point,” says Yergan. “I spoke with a physician the other day who joined a multispecialty group, and the reason he was unsatisfied was because of the politics in the group. He’s not able to do the procedures he’s been trained for. They’ve been turfed out to other specialties.”
Yergan plans to help make other physicians like him happy by allowing physicians to have a huge stake in the management of their clinical specialties in return for signing an employment contract.
“Employing specialists is a key part of our strategy going forward.”—Philip Betbeze