Physicians: Selling Your Practice

Whether you are planning to start a new employed position or retiring, selling your current practice is a very important consideration.

Medical practice sales experts recommend that doctors follow a series of steps, ideally beginning the process two or three years before the desired time of sale. These measures include getting financial records in order, making the practice visually appealing, setting realistic price expectations, communicating the interest to sell and planning the transition.

Read the full article in American Medical News, or click here:

http://www.ama-assn.org/amednews/2010/03/15/bisa0315.htm

Physician Recruitment Income Guarantees Ease Hiring Of New Docs

Many of the larger facilities we work with offer new physician employees income guarantees as part of their employment package. Recently, physician income guarantee agreements are enjoying a resurgence.

What is an income guarantee? The facility guarantees that the new physician will earn a set amount of total income in the first 12-24 months of employment. If the cases completed do not reimburse the physician according to the guarantee level, the facility pays the additional income to the physician, thus 'guaranteeing' a certain amount of income. Technically, this is a “loan” to the doctor, but the “loan” is forgiven if the physician remains in practice in the hospital’s service area for 2-4 years after the guarantee period.

Income guarantees are becoming more common in new physician employment offers. The income guarantee serves to alleviate the concerns of the group or facility that if it hires the new physician, the senior doctors will be forced to take a pay cut to fund the new doctor’s salary, as that doctor ramps up his or her practice.

Income guarantee agreements are complex, and there are generally many strings attached, i.e. potentially no non-compete for group, taxes issues, and liability issues.

Daniel M. Bernick is an Attorney and Principal of Health Care Law Associates and has provided an article explaining income guarantees and also 7 core legal and business pointers about the guarantee agreements.

Read the full article in Physicians News Digest, or click here:

http://www.physiciansnews.com/2010/01/14/physician-recruitment-income-guarantees-ease-hiring-of-new-docs/

NEJM Physician Survey: Health Reform May Lead to Significant Reduction in Physician Workforce

The New England Journal of Medicine has published a physician survey determining the impact of health reform on physicians and ultimately on medicine as we know it today.

The BLS (Bureau of Labor and Statistics) predicts a more than a 22% increase in physician jobs during the ten-year period ending in 2018. This places physician careers in the top 20 fastest-growing occupations from 2008 to 2018. Meanwhile, nearly one-third of physicians responding to this survey indicated that they will want to leave medical practice after health reform is implemented.

The Medicus Firm, a national physician search firm based in Dallas and Atlanta, conducted a survey of over 1,000 physicians to determine their expectations as to the impact of health reform on their practices, income, job satisfaction, and future career plans.

Although it's probably unrealistic that nearly half of the current practicing physicians will exit the medical practice industry after a version of health reform were implemented, even if a much smaller percentage such as 10, 15, or 20% are pushed out of practice over several years at a time when the field needs to expand by over 20%, this would be severely detrimental to the quality of the health care system.

The survey indicates that doctors do want change in our current healthcare system. Only approximately 4% of physicians surveyed feel that no reform is needed. However, only 28.7% of physicians responded in favor of a public option as part of health reform.

What does this mean for physician recruiting? It’s difficult to predict with absolute certainty, but one consequence is inevitable. After health reform is passed and implemented, physicians will be more in demand than ever before. Shortages could be exacerbated further beyond the predictions of industry analysts.

Read the full article in the New England Journal of Medicine, or click here:

http://www.nejmjobs.org/rpt/health-reform-may-reduce-physician-workforce.aspx

Percentage of Physicians Practicing in the State Where They Completed Training

The New England Journal of Medicine has published an article tracking the percentage of residents and fellows that ended up accepting positions in the states where they completed training.

According to the NEJM, after completing training in an ACGME-accredited program, 47.6% of physician graduates either stayed or returned to the state where they completed GME. Retention rates were highest for physicians who completed both UME and GME in the same state. Two thirds of the physicians who completed UME and GME in the same state accepted positions in the same state.

Six of the top ten states with the highest GME retention rates were in the West. In terms of overall retention, 8 of the top 10 states were n the South and West.

The New England Journal of Medicine has created a map tracking GME retention. Read the map on their website, or click here:

http://www.nejmjobs.org/rpt/acgme-retention-rates.aspx

Healthcare Sector Job Growth: Continued Increases Expected

The Healthcare Sector has created additional jobs in January reports, slightly impacting the economy as a whole. The Bureau of Labor Statistics reported on the national employment situation on February 5th an increase in healthcare jobs, and the organization along with other reports suggest the trend in an increase of healthcare jobs will continue.

According to the Bureau of Labor Statistics, January reported an increase of healthcare jobs of 15,300 new jobs in ambulatory medical centers, including 5,600 in physician offices. Another 5,000 were added to hospital payrolls. More jobs were created this past January in the health care industry than at this time last year.

Experts say this is being driven by the fact that, although some areas of the country are experiencing shortages of medical professionals, there are more physicians entering the marketplace, and very few, if any, end up working alone. According to MGMA data, a physician needs an average of 4.5 support staff, although this can vary by specialty.

Other surveys supported the idea that health care is driving job creation and will continue to do so. A report by the Conference Board issued February 1st found that the number of jobs advertised online increased 382,000 and topped 4 million for the first time since November 2008. Listings for health care professionals increased by 24,500, bringing the total for this category to 567,800. About 6,500 additional ads were placed for medical support staff for a total of 119,000.

Read the full article in American Medical News, or click here:

http://www.ama-assn.org/amednews/2010/02/22/bisc0223.htm

Physician Employment Contracts

Once our candidates have decided they would like to move forward with one of our opportunities, the contract negotiation process begins. While many candidates believe the decision has been made and they have confirmed where they will be practicing, the contract can be the most difficult, and the most essential, part of the entire job search process.

Physician employment contracts have become increasingly complex. While candidates may initially focus on contract provisions that define income, benefits, and working conditions, they must also recognize the importance of other business-related stipulations. These include partnership requirements, termination clauses, and non-compete agreements.

The New England Journal of Medicine has provided some good suggestions and information to consdier before officially penning your name on an employment contract. While the publication offers very good advice, it is crucial you also run any contract by your own lawyer and even your accountant. As always, your recruiter can also help you with this process.

Here are some tips the article suggests:

-Ask, and answer, key questions before moving to contract negotiations.
-Strike a fair non-compete clause by obtaining pertinent information first.
-Avoid discussing compensation or other key terms before seeing a contract, even a “sample” one.
-Request practice financial documents early on in contract discussions, and beware of practices that won’t produce them.


Read the full article in the New England Journal of Medicine, or click here:

http://www.nejmjobs.org/career-resources/physician-job-contracts-update.aspx

2009 Health Spending Increase

National health spending may nearly double by 2019; 2009 saw the largest recorded one-year increase in health spending as a percentage of the economy, and it's only going up according to CMS actuaries.

A shrinking economy combined with greater public health spending in 2009 produced a 1.1% point increase in national health spending as a share of gross domestic product, the largest single-year jump since records began in 1960. This was largely because of a spike in Medicaid spending and relatively low growth in private spending. Spending on doctors is expected to reach 6.6% by 2017 as the economy recovers.

A Medicare physician payment cut scheduled to take effect March 1 would significantly impact spending on doctors, according to the report. Under the cuts, total spending on physicians and clinics would increase by 1.5% in 2010. If prevented, such spending would increase by 4.1%.

Read the full article in American Medical News, or click here:

http://www.ama-assn.org/amednews/2010/02/15/gvsf0218.htm

Physician Practices: Competing in the Marketplace

Our firm works with many private practices, and even several solo practices looking to add one other physician. The American Medical Association provides strong tools and resources to add the most value and profit to any practice, particularly smaller practice models.

"Competing in the Marketplace" provides a practical and pragmatic overview of the integration options- ranging from mergers to a wide variety of other contractual arrangements. Running a small or solo practice can prove extremely financially rewarding if operated correctly, however many changes in the marketplace have placed sever financial strains on physicians that can only be addressed by some form of integration.

To help physicians choose for themselves a level of integration that makes sense given their specific goals, the AMA identifies many of the benefits and drawbacks of several integration arrangements in the attached resource.

Please read the full article in AMA, or click here:
http://www.ama-assn.org/ama1/pub/upload/mm/368/competing-in-market.pdf

Physician Survey: How Recession has Affected Practices, Shortage in Primary Care Physicians

About 9,000 primary care physicians nationwide are being surveyed to examine work force matters, medical homes, and other practice issues. One goal is to help determine whether there are enough primary care physicians to tend to the nation's needs, especially if insurance coverage is extended to more people in a reformed health system.

Questions on the four-page survey include asking whether physicians plan to work longer hours or hire more staff if they experience an influx of new patients. The survey also is assessing physicians' readiness to establish patient-centered medical homes, asking if electronic medical records or disease registries are part of their practice.

Primary care physicians and subspecialists in pediatrics and internal medicine received the surveys, Salsberg said. Collaborating on the effort with the AAMC are the American Medical Association, American College of Physicians, American Academy of Family Physicians, American Academy of Pediatrics, and American Assn. of Colleges of Osteopathic Medicine.

Read the full article in American Medical News, or click here:

http://www.ama-assn.org/amednews/2010/02/08/prsd0210.htm

New U.S. Medical Schools to Open

Medical school applications are hitting an all-time high. The proliferation of new schools is also a market response to a rare convergence of forces: a growing population; the aging of the health-conscious baby-boom generation; the impending retirement of, by some counts, as many as a third of current doctors; and the expectation that, the present political climate notwithstanding, changes in health care policy will eventually bring a tide of newly insured patients into the American health care system. For several years many potential students have been attending offshore medical schools, or giving up hope entirely, when they could not get into domestic schools.

The United States has recently opened, or has impending openings, of nearly two dozen medical schools, the most at any time since the 1960's and 1970's. These new schools are seeking to address an imbalance in American medicine that has been growing for a quarter century. Meanwhile, American hospitals were using foreign-trained and foreign-born physicians to fill medical residencies. During the 1980s and '90s only one new medical school was established. If all the schools being proposed actually opened, they would amount to an 18 percent increase in the 131 medical schools across the country. (By comparison, there are 200 law schools approved by the American Bar Association.)

Read the full article in the New York Times, or click here:
http://www.nytimes.com/2010/02/15/education/15medschools.html?ref=health