Physician retention plans help reduce costs and optimize revenues.

Recruiting primary care physicians can cost a large practice

millions of dollars in recruitment expenses and lost revenue. And

competition among practices to attract physicians can cause a position to

remain unfilled for a year or longer. Thus, the ability to retain

Successful implementation of a physician retention plan can help reduce

turnover, improve morale among the physicians, and foster a perception of a

practice as a health services provider of choice.

Penn State Geisinger Health System, Danville, Pennsylvania, developed a

physician retention plan for its multispecialty group practice of nearly

1,000 physicians to reduce its costs associated with physician recruitment.

The plan is organized into four phases of physician employment: recruitment,

preemployment, employment, and postemployment.

Physician turnover can be costly for all medical practices, particularly

large ones. Physician retention, therefore, is an important cost-avoidance

strategy and an important way to maintain the continuity of healthcare

services. Practices should work to be perceived by physicians as the health

services employer of choice and continually strive for improvement. These

goals are facilitated by having a physician retention plan in place before

recruitment begins.

Penn State Geisinger Health System, Danville, Pennsylvania, conducted

research for the development of such a physician retention plan to reduce

its physician attrition rate. Penn State Geisinger is an integrated delivery

system comprising four hospitals, a not-for-profit, multispecialty group

practice of nearly 1,000 physicians, and the nation's largest rural HMO in

terms of covered lives. Penn State Geisinger employs more than 200

nonphysician providers, provides care to a patient population of 4.4 million

through 80 practice sites, and offers more than 30 residency and fellowship

programs.

Penn State Geisinger estimated that replacing one primary care physician can

result in $20,000 to $26,000 in recruitment costs, loss of $300,000 to

$400,000 in annual gross billings, loss of $300,000 to $500,000 in inpatient

revenue, plus additional loss of specialty referral revenue. based on

limited data, Penn State Geisinger estimated that physician turnover rates

range from 10 to 15 percent nationally. For a practice with at least 100

physicians, the financial impact from turnover can be in the millions of

dollars. In addition, the fierce competition among practices for primary

care physicians may result in positions remaining unfilled for a year or

longer.

Generally, many factors, rather than a single event, contribute to physician

attrition. Penn State Geisinger's research showed the most significant

reasons for physician turnover included:

* Lack of physician "fit" with partners and the practice environment;

* Lack of clear communication of expectations to physicians during

recruitment;

* Absence of two-way communication between physicians and practice

management;

* Failure to include physicians in the decision-making process; and

* Lack of appreciation/recognition of physicians.

Based on this research, Penn State Geisinger organized its physician

retention plan into four phases of physician employment: recruitment,

preemployment, employment, and postemployment. Since the plan's

implementation in 1996-97, early estimates indicate that Penn State

Geisinger's physician turnover may decline by 15 percent, saving the system

an estimated $100,000 in recruitment costs as well as millions of dollars in

lost revenues.

Physician retention plans at other organizations can be designed along the

lines of Penn State Geisinger's plan and should yield equally positive

results.

Recruitment

Before candidates are identified and interviewed, a practice's physician

recruitment department should help interviewers develop a site profile that

includes all employment qualifications and expectations of physicians

recruited for the practice. Both the site profile and the professional staff

recruitment plan should be completed before recruitment begins. The

recruitment phase involves selecting search advisors, screening candidates

for fit, establishing mutual expectations, and offering additional no-cost

benefits.

Selecting search advisors. A search advisor should be selected by senior

leadership for each region, division, or department organizational structure

of a multisite practice. The advisor could be a senior vice president, a

clinical chairman, or a physician leader. In a large organization, search

advisors should take responsibility for the recruitment program for their

region and should communicate with the physician recruitment department

regarding position openings, salary ranges, professional staff recruitment

plans, contract negotiations, and the site profile.

Each regional search advisor should appoint a physician search director for

each site that is actively recruiting to oversee and coordinate the

recruitment process at the local level. The local search director should be

responsible for screening candidates, conducting preliminary phone

interviews, and designating a local recruitment coordinator to support the

interview process by scheduling site interviews, making travel arrangements,

and coordinating interview- related events. The recruitment department

should advise and support the coordinator.

Screening candidates for fit. The best retention strategy is to hire the

right person in the first place. During a preliminary phone interview, the

search director should determine whether candidates seem compatible with the

practice environment before inviting them for on-site interviews.

Ascertaining fit can be accomplished by asking about matters such as their

style of practice, professional goals, why they want to change practices,

and whether the community in which they would be practicing would meet their

lifestyle preferences.

On-site interviewers should talk not only with the candidate but also with

the candidate's spouse, if there is one, particularly with respect to local

career opportunities, housing, and schools. Time should be allowed to

conduct a community tour.

Establishing mutual expectations. Mutual expectations should be discussed

during the interview and confirmed before an offer is made. Discussions

should cover patient load; work and call schedules; committee

responsibilities; teaching responsibilities, if applicable; and ramping up

their practice. Ramping up the practice means initially establishing a lower

number of patients per day and gradually increasing this number over a

six-month period until the physician is meeting the practice's benchmark

work load. This procedure gives new physicians an opportunity to acclimate

to the practice's paperwork requirements and policies and procedures.

Other topics that should be discussed include support issues (eg, provision

of a computer, nurse, secretary, physician assistant), research

opportunities, continuing medical education support, information systems

capabilities, and compensation plan features. Once agreed upon, the

expectations should be put in writing.

Offering additional no-cost benefits. One cost-effective tool for retaining

physicians is to offer them additional benefits that put little financial

strain on the organization. Such benefits include discounted auto and home

insurance, a payroll deduction plan, a dry-cleaning pickup service, a photo

drop-off service, an on-site automatic teller machine, sick-child day care

subcontracted to a local day care center, discounts on fitness center

memberships, and no-cost smoking cessation programs.

Preemployment

The preemployment phase involves confirming mutual expectations, developing

and implementing a formal practicewide physician orientation program, and

developing a mentor relationship.

Confirming mutual expectations. Before an offer is made, the interviewer

should review and confirm expectations of both management and the physician.

Developing and implementing a formal practicewide physician orientation

program. An orientation program permits newly hired physicians and midlevel

providers (physician assistants, nurse practitioners, certified nurse

anesthetists, and midwives) to meet senior management and learn about the

practice's strategies, market, managed care relationships, clinical

programs, residency teaching, rotations, continuing education, research

opportunities, risk management, and recruiting. The program should include

an on-site orientation to familiarize physicians with the ramping-up

process, including time frames for reaching full work loads, individuals

with whom they will frequently interact, and paperwork requirements.

Developing a mentor relationship. A mentor relationship with a

nonsupervisory physician can help a new physician become oriented to the

practice and the communities it serves. The site director should select the

mentor, and time should be made in the mentor's schedule to perform

mentoring duties.

Employment

The employment phase involves fostering two-way communication, implementing

a physician recognition program, and providing interregional or site

transfer opportunities.

Fostering two-way communication. Physician supervisors should schedule

regular individual and group meetings with new physicians to answer

questions, discuss concerns, and provide feedback. Resolution of questions,

concerns, and complaints should be a priority. How problems are resolved

affects physicians' morale. Physicians should know whom to call to resolve

problems efficiently.

Holding regional or systemwide forums twice a year is a good way to meet

with the group and encourage two-way communication. Smaller organizations

should get all physicians and midlevel providers together to talk about

issues. Forums should be hosted by the respective regional leaders.

Implementing a physician recognition program. Staff physician recognition

programs reward physicians for outstanding performance and boost morale. To

establish such a program, a workgroup consisting of physician leaders and

staff physicians should be formed to develop a practicewide recognition

program.

Providing interregional or site transfer opportunities. Although a physician

may provide high-quality, cost-effective care to patients, the working

relationship may fail on a personal level. Upon learning that a physician is

unhappy, a site director should schedule a meeting to discuss the problem.

If the problem is irreconcilable, the physician warrants retention, and the

practice has multiple sites, an interregional or site transfer should be

suggested.

If a transfer is appropriate, sites for consideration should be determined.

On-site interviews should be scheduled for the physician as in the normal

recruitment process. When a fit is determined relocation to that area, if

necessary, should be arranged as a part of the compensation/benefit package.

Postemployment

The physician recruitment department should conduct an exit interview with

every physician who leaves a system practice. The information learned during

the interview should be documented so that recurring problems can be

identified. An analysis of the interview results should be distributed to

regional managers on a timely basis (eg, quarterly), with a request for an

action plan when circumstances warrant.

Conclusion

Implementing an effective physician retention plan is one strategy health

systems and group practices can use to reduce recruitment-related costs and

optimize revenues. A physician retention plan can help streamline

recruitment and retention, thereby improving the chances of hiring the right

person in the first place.

Kurt Scott is administrative director, professional staffing and

credentialing, Penn State Geisinger Health System, Danville, Pennsylvania.